FOUNDATIONS OF INFORMATION

SYSTEMS IN BUSINESSCHAPTER 1- section I

Lecture-2

Outline

• What is an IS ?• The fundamental roles of IS in Business• Trends in IS• The Role of e-Business in Business• Types of IS

What is an Information System?

Any organizedcombination of…

Policies andprocedures

Data resources

Communicationnetworks

Hardware andsoftware

Stores, retrieves, transforms, and disseminates informationin an organization

People

• Information systems and technologies are vital components of successful business and organizations.

Why do we need to understand IS?

The Roles of IS in Business• Information technologies, including

Internet-based IS, are playing vital roles in business.

• Information technology can help all kinds of business improve the efficiency and effectiveness of their business processes, decision making and workgroup collaboration, which strengthens their competitive positions in rapidly changing marketplace.

The Roles of IS in BusinessInformation systems perform three vital roles in any type of organization:

1. Support of business processes and operations.• Examples of supported business processes include activities such

as: sales transactions, inventory ordering, and payroll processing.

2. Support of decision making by employees and managers.

• Make decision about activities such as deciding which product lines to add or discontinue.

2. Support of strategies for competitive advantage.• Information systems help provide new types of products and

services through which an organization might gain a competitive advantage.

Fundamental Roles of IS in Business

Today’s Focus• Today’s organizations are constantly

striving to achieve integration of their systems to allow information to flow freely through them, which adds even greater flexibility and business support than any of the individual system roles could provide.

Trends in IS

The Role of E-Business in Business

• The Internet have changed the ways businesses operate and people work, as well as how information systems support business process, decision making, and competitive advantage.

• Thus, many business today are using Internet technologies to Web-enable their business processes and create innovative e-business applications.

What is e-Business ?

Using Internet technologies to empower…

Business processesElectronic commerce

Collaboration within a companyCollaboration with customers, suppliers,

other business stakeholders

an online exchange of value

E-business applications • Businesses today are using the Internet,

corporate intranets, and inter-organizational extranets to support business activities with suppliers, partners, customers, accounting, finance, research and development, manufacturing, marketing, sales, and customer service.

How E-Business is Being Used

IT in E-business applications The primary Information Technology infrastructure that support the E-business applications of many companies are:1. Internet2. Intranet

• Internet-like networks and websites developed for use within an organization.

3. Extranet• Internet-like networks that links selected resources

of a company with its customers, suppliers, and other business partners using internet technologies.

E-Business Applications uses in companies

Reengineer Internal business

processes

Reengineering

Support communication,

coordination among teams

and work groups

Enterprise collaboration

Buying, selling, marketing, and

servicing of products and services over

networks

Electronic commerce

Questions ..

Type of Information Systems

Types of Information Systems

OperationsSupport systems

Transaction processing

Process control

Enterprise collaboration

ManagementSupport systems

Decision support systems

Executive information systems

Management information systems

1- Operations Support Systems

These systems help enable the day to day operations of an organization

Transaction processing

Process control

Enterprise collaboration

Operations Support Systems

1. Transaction processing systems process routine business transactions,

update operational databases, and produce business documents.

Examples: sales or purchases.

Two Ways to Process Transactions

Batch Processing

Accumulate transactions over time

and then process periodically

Ex: Banks process all checks in a batch at night

Online Processing

Process all transactions immediately

Ex: A bank processes ATM withdrawals

immediately

Types of Operations Support Systems

2. Process control systems These systems monitor and control physical

processes Examples: heating and cooling systems.

3. Enterprise collaboration systems Support team or workgroup communications and

productivity. Examples: e-mail, instant messaging, message

boards, digital whiteboards, wikis, and videoconferencing.

2- Management Support Systems

Provide information and support foreffective decision making by managers

Decision support systems

Executive information systems

Management information systems

Types of Management Support Systems

1. Management Information Systems (MIS) Provide information in the form of reports and

displays Example: daily sales analysis reports

2. Decision Support Systems (DSS) Interactive ad hoc support Example: a what-if analysis to determine where to

spend advertising dollars

3. Executive Information Systems (EIS) Critical information for executives and managers Example: actions of competitors

Other Classifications of Information Systems

Expert Systems

Provides expert advice

Ex. Credit application advisor

Knowledge Management

Systems

Creation, organization, dissemination of knowledge throughout company

Customer problems solutions systems

Other Classifications of Information Systems

Strategic Information

Systems

Helps get strategic advantage

Ex. Shipment tracking

Functional Business Systems

Focus on operational and managerial application of basic business functions

Accounting, finance, marketing

Classifications of Information Systems

Questions ..

Read from Chapter 1 (Section 1)

Resources ..