Introduction to Information Systems

What is an information system?

• An information system is an organized combination of people, hardware, software, and data resources that collects, transforms, and disseminates information in an organization.

• Information system is an organizational and management solution, based on information technology, to a challenge posed by the environment.

Why study information systems?

• An end-user perspective– Enhance personal productivity, and the

productivity of their work groups and department.

– Increase your opportunities for success:• be aware of the management problems and

opportunities presented by the information technology.

Why study information systems?

• An enterprise perspective: Information systems play a vital role in the business success of an enterprise.– Efficient operations– Effective management– Competitive advantage

Information System is a major functional area of business

• A major part of the resources of an enterprise and its cost of doing business.

• An important factor affecting operational efficiency, employee productivity, customer service, etc.

• A major source of information needed to promote effective decision making.

• An important ingredient in developing competitive products and services that give an organization a strategic advantage in the marketplace.

• A challenge career opportunity.

Business Are Becoming Internetworked Enterprises

• The internet and Internet-like networks (intranets and extranets) have become the primary information technology infrastructure that supports the business operations of many organizations.

• Electronic commerce:– The buying and selling, and marketing and servicing of

products, services, and information over a variety of computer networks.

• Globalization:– Global markets, global production facilities, global partners,

global competitors, global customers.

Techies might finally be able to move into top management

• More Chief Information Officers (CIOs) are reporting directly to CEOs.

• More CIOs are being included on management committees.

• In a recent survey of executives at capital market firms, 89% believed that technology managers would assume greater responsibilities.

What Is Information System?

• Fundamental roles of information systems

• Types of Information Systems• Information System Activities• Components of an Information System

Fundamental roles of information systems

• Support of business operations.• Support of managerial decision making.• Support of strategic competitive advantage:

– Business process reengineering.– Competitive strategies:

• cost strategies• differentiation strategies• etc

Functional Business Information Systems

ProductionOperations

Marketing

Human ResourceManagement

FinanceAccounting

FunctionalBusinessSystems

Targeted Marketing on the Web p 233

• Community: virtual communities• Content: advertising banner placed on various

website pages• Context: advertising appears only in web pages

that are relevant to the product• Demographic/Psychogrphic: income, age,

education• Online behaviors: tracking techniques such as

cookies

Push/Pull

• Internet push marketing:– Email marketing– Web page personalization

• Internet pull marketing– Product web page

Customer Relationship Management

• It costs six times more to sell to a new customer than to sell to an existing one.

• A typical dissatisfied customer will tell eight to ten people about his or her experience.

• A company can boost its profit 85% by increasing its annual customer retention by only 5%.

• The odds of selling a product to a new customer are 15%, whereas the odds of selling to an existing customer are 50%.

• 70% of complaining customers will do business with the company again if it quickly takes care of a service snafu.

Customer Relationship Management

SalesCross-SellUp-SellTeleSales

Store Frontand FieldService

Marketing andFulfillment

CustomerService andSupport

Retentionand LoyaltyPrograms

Customer

Contact Management

Cross-Functional Enterprise Systems

• Systems that cross the boundaries of traditional business functions in order to reengineer and improve vital business processes all cross the enterprise.– Share information resources– Improve the efficiency and effectiveness of

business processes.

Enterprise Resource Planning

• ERP is a cross-functional enterprise system that integrates many of the business processes that must be accomplished within the manufacturing, logistics, distribution, accounting, finance, and human resources functions of a business.

Enterprise Resource Planning

SalesDistribution,OrderManagement

Accountingand Finance

ProductionPlanning

Human Resources

IntegratedLogistics

Customer/Employee

Support of Managerial Decision Making

• Structured decision– The information requirements are known

precisely– The criteria for making decision are known– The quality of a decision can be measured

precisely• Unstructured decision

Manager + Computer(DSS)

Solution

ComputerSolution

ManagerSolution

Structured Semistructured Unstructured

DEGREE OF PROBLEM STRUCTUREDEGREE OF PROBLEM STRUCTURE

The DSS Focuses on Semistructured ProblemsThe DSS Focuses on Semistructured Problems

Information Systems for Strategic Advantage

Competitive forces model by Michael PorterThreat of New Entrants

Bargaining Powerof Suppliers

Bargaining Powerof Customers

Rivalry amongExisting Competitors

Threat of SubstituteProducts

Competitive Strategies

• Cost leadership strategy.• Product differentiation strategy.• Innovation strategy: Finding new way of doing

business.• Alliance strategy: Establish alliances with

customer, suppliers, competitors, other company.• Growth strategy: expanding, diversifying,

integrating.

Strategic Roles for Information Systems

• Improving business operations• Promoting business innovation• Locking in customers and suppliers

– Interorganizational IS, EDI, automatic inventory replenishment system

• Creating switching costs– make customers dependent on the continued use of

innovative IS.• Raising barriers to entry

– discourage competitors from entering a market

Strategic Uses of Information TechnologyImproving

BusinessProcess

PromoteBusinessInnovation

Locking in Customers and Suppliers

Use IT to reduce costs of doing business

•Use IT to improve quality•Use IT to link business to customers and suppliers

Use IT to create new products or services

EnhanceEfficiency

Create NewBusiness Opportunities

Maintain ValuableCustomers and Relationships

Strategy

IT Role

Outcome

Types of Information Systems• Operations support systems

– Transaction processing systems– Office automation systems

• Management support systems– Management information systems– Decision support systems– Executive support systems

• Strategic information systems– Can be TPS, MIS, DSS, etc.– Systems that help an organization to meet strategic

objectives

Transaction Processing Systems

• Support day-to-day business operations• batch processing, online processing• large amount of data, high processing

speed, high reliability, accuracy, and security (fault tolerant)

• Data: internal, historical, detailed

Examples of TPS

• Order entry system• Billing system• Accounts receivable system• Accounts payable system• Payroll system• General ledger system

Management Information Systems(Information Reporting Systems)

• Facilitate management control by producing summarized reports that compare actual performance against planned performance on a regular and recurring basis.

• Management control: Ensuring that performance meets established standards.

Information System Activities

• Input of data resources• Processing of data into information

– calculating, comparing, sorting, classifying, and summarizing

• Output of information products• Storage of data resources

Components of an Information System

• Hardware• Software• People• Database

Hardware• Input devices• CPU and primary storage

– RAM - temporary storage– Processor

• Control Unit - decoder• Arithmetic & Logic Unit (ALU)

– Machine cycle:• fetch instruction• decode instruction• execute instruction• place results in memory

Hardware

• Output devices• Secondary storage• Communication devices

Hardware• Microcomputers

– personal computing, workstation,network server.

• Minicomputers– Departmental and workgroup systems,

network server, workstation.• Mainframes

– Enterprisewide systems, transaction processors

• Networked computer systems

Local area network• Peer-to-peer network:

– no dedicated server– allow file sharing with password protection

• Client/Server network– at least one computer as dedicated server– improved security, performance– Network Operating System (NOS), Windows NT Server

– Downsizing: replacing mainframes by networked micro/minicomputers.

– Upsizing: replacing PC based systems by networked micro/minicomputers.

– Distributed processing.– Client/Server computing.

Hardware Trends• CPU: Parallel processor systems.• Storage:

– RAID (Redundant Arrays of Inexpensive Disks): Arrays of disk drives that provides a fault tolerant capability by storing multiple copies of data on several disks.

• RAID hardware/RAID software, Mirroring.– Erasable optical disk.

• Input/output: video and multimedia input/output, voice recognition and response, optical and magnetic recognition.

• Hand-held devices

Software

• System software– Operating system

• Application software– University’s registration system

• Application development software

Operating system functions

– User interface– Resource management (managing hardware)– Task management (managing the

accomplishment of tasks)– File management (managing data and

program files)– Utilities (providing a variety of supporting

services)

Application development software

• Low level language• High level language

– Third generation– Fourth generation– Fifth generation

Compiler

• Translator: Translate the source program to machine executable code.

• Interpreter: Translate one command at a time.– VBScript, JavaScript

Object-oriented development tools

– graphics-oriented user interface– component programming– event-driven programming– codes are reusable,– Examples, C++, JAVA, VisualBasic.

Portability Java: Write Once Run Anywhere

Java Source Code

Java Byte Code(Intermediate Code)

Java Byte Code

Java Virtual Machine(JVM)

Executable Code

Microsoft’s .Net

• Language must compliance with Common Language Specification, CLS.

• Compile the language into Microsoft Intermediate Language (MSIL) code.

• The MSIL code is then executed in the Common Language Runtime (CLR), which conceptually is same as the JVM, where it is translated into machine code by a compiler.

Microsoft .Net: a new monopoly?

• Web services: – A web service is a collection of functions packaged as a

single entity, published to the network for other application to use.

• Microsoft passport: – An internet authentication service that provides single

sing-on to passport-enabled web sites and services.• Microsoft hailstorm:

– A consumer-oriented, subscription-based internet services.

Groupware• Electronic messaging.• Information sharing

– Users can access the information, change it, comment on it, and add new information (at different times)

– Example: Lotus Note.• Document conferencing (WhiteBoard or

Application conferencing)– Allow group members to confer on a document

at the same time.

Groupware

• Audio/video conferencing• Electronic conferencing

– Combining document conferencing with videoconferencing.

• Group scheduling .

People

• Information specialists– programmer, system analyst, database

administrator, etc.• End-user:

– Menu-level end users– Command-level end users– End-user programmer

• End-user computing

What Stimulated End-User Computing?

• An increase in computing literacy• The information services backlog• Low-cost hardware• User-friendly software

– General-purpose productivity software– Office automation applications– Group wares– Application development software

Traditional Communications Chain

DatabaseAdministrator

UserUser SystemsAnalyst

Programmer Operator ComputerComputer

NetworkSpecialist

IS and EUCThe End-User Computing

Communication Chain

User Computer

InformationSpecialists

SupportSupport

CommunicationCommunication

EUC Risks• Poorly aimed systems• Poorly designed/ documented systems• Inefficient use of information resources• Loss of data integrity• Loss of security

Controls for end-user applications

• Thorough documentation of user-developed systems.

• A formal process for evaluating and acquiring new hardware and software.

• Formal testing, security control for access, backup and recovery procedures for all user systems.

Office Ethics Confusion

Technology Is Changing the Rules of Conduct on the Job

Do you think it is wrong to• Copy company’s software for use at home?• 35 % say no.

• Use company equipment like computers to search for a new job?

• 34% say no.• Blame your own personal errors on

technological glitches?• 39% say no.

• Use office computers to do personal shopping on the Internet?

• 46% say no.

Workplace PCs May Not Be Very Private

• Don’t be fooled: it may be personal, but it is not private.

• Cyber-surveillance: the person most likely to be spying on you is your boss. 27% of businesses surveyed by the American management association said they review employee email.

• Reasons:– Productivity– Liability– Network performance

Database

• A group of related files– Support business operations– Provide information

An example of database application

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Major Functions of Database Management

• Creating a database– Analysis: Entity-Relationship Diagram– Design: Design file structure– Implementation

• Accessing a database• Updating a database

Database Security

• Logical protection:– Illegal access– Illegal update– Virus

• Physical protection

Internet firms flocks to store data in blast-proof British bunker

• Some of Britain’s biggest companies are running their Internet operations on systems installed in a 300-foot-deep nuclear blast-proof bunker.– IRA bombings– Anti-Capitalists

Database Application

• An organized set of menus, forms, reports, business rules, and the database it operates on.

• An example:– C:\Program Files\Microsoft Office\Office\Sam

ples\Northwind.mdb