lecture4(information systems&functional applications)
DESCRIPTION
Understand the role and relevance of an information system aids decision making. Identifying and evaluating appropriate information systems. Managing the process of information gathering, processing, storage and retrieval Managers make decisions using the information available to them at the time.TRANSCRIPT
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Information Systems and
Functional ApplicationsAbdisalam Issa-Salwe
Faculty of Professional StudiesThames Valley University
Abdisalam Issa-Salwe, Thames Valley University2
Why IS is important to organisations?
Understand the role and relevance of an information system aids decision making.
Identifying and evaluating appropriate information systems.
Managing the process of information gathering, processing, storage and retrieval
Managers make decisions using the information available to them at the time.
Abdisalam Issa-Salwe, Thames Valley University3
Life-blood of the organisation
Abdisalam Issa-Salwe, Thames Valley University4
MEDIATING FACTORS: MEDIATING FACTORS: Environment Environment Culture CultureStructure Structure Standard Procedures Standard Procedures Politics Politics Management Management Decisions ChanceDecisions Chance
ORGANISATIONSORGANISATIONS INFORMATION INFORMATION TECHNOLOGYTECHNOLOGY
The two-way Relationship between organisations and Information Technology
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About Business Strategy
Organisation has a limited set of resources (e.g. time, people, money, physical resources) and they must decide how to use those resources.
Strategy is deciding what the organisation is going to do and how it will use its resources
A business system is a collection of people, machines and methods organised to accomplish a set of specific functions.
Abdisalam Issa-Salwe, Thames Valley University6
About Business Strategy? (cont…) Contributing to the establishment of the
organisation's long term business objectives e.g. identifying and evaluating external factors which may impact on the organisation
Identifying and appraising the organisation's skills and resources
Identifying and defining business options; evaluating these options, performing risk assessments and recommending strategies for adoption
Analysing the economic impact of environmental change upon the organisation
Analysing market and competitive developments in relation to marketing strategy
Contributing to the development of the organisation's information systems strategy as a complement to its business strategy
Abdisalam Issa-Salwe, Thames Valley University7
Examples of Strategies
Strategy 1: Manufacture equipment with the money and use the building and the people to manufacture widgets.
Strategy 2: Outsource the production of widgets and use the people and building to be widget distributor - or perhaps a widget store.
Strategy 3: Sell the patent to a larger firm, sell the building, fire the employees and retire!
Abdisalam Issa-Salwe, Thames Valley University8
Implications of information management in organisations
It has the potential to contribute to the achievements of organisations
It has different purposes in different organisations. These purposes will be influenced by the organisation's goals as well as by its culture and its stance on information.
It is practiced in a political, social and cultural context which shapes both what information management does and how it does it.
Abdisalam Issa-Salwe, Thames Valley University9
Developing IS/IT strategy
Once key strategic issues have been identified, they feed into business objectives, particularly marketing objectives.
SWOT analysis can be used in conjunction with other tools for audit and analysis, such as PEST analysis and Porter's Five-Forces analysis.
Abdisalam Issa-Salwe, Thames Valley University10
SWOT Analysis SWOT analysis is an important tool for
auditing the overall strategic position of a business and its environment.
SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats
Abdisalam Issa-Salwe, Thames Valley University11
Strengths and weaknesses are Internal factors:
For example, a strength could be your specialist marketing expertise. A weakness could be the lack of a new product.
Opportunities and threats are external factors.
For example, an opportunity could be a developing distribution channel such as the Internet, or changing consumer lifestyles that potentially increase demand for a company's products. A threat could be a new competitor in an important existing market or a technological change that makes existing products potentially obsolete
SWOT Analysis (Cont…)
Abdisalam Issa-Salwe, Thames Valley University12
Abdisalam Issa-Salwe, Thames Valley University13
SWOT Analysis (cont…)
Strength your specialist marketing expertise. a new, innovative product or service location of your business quality processes and procedures any other aspect of your business that adds
value to your product or service.
Abdisalam Issa-Salwe, Thames Valley University14
SWOT Analysis (cont…)
Weakness could be: lack of marketing expertise undifferentiated products and service (i.e. in
relation to your competitors) location of your business poor quality goods or services damaged reputation
Abdisalam Issa-Salwe, Thames Valley University15
SWOT Analysis (cont…)
Opportunity could be: a developing market such as the Internet. mergers, joint ventures or strategic alliances moving into new market segments that offer
improved profits a new international market a market vacated by an ineffective competitor
Abdisalam Issa-Salwe, Thames Valley University16
SWOT Analysis (cont…)
Threat could be: a new competitor in your home market price wars with competitors a competitor has a new, innovative product or
service competitors have superior access to channels
of distribution taxation is introduced on your product or
service
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Critical Success Factors (CSF)
A small number of easily identifiable operational goals
Shaped by industry, manager, environment
Believed to assure firm’s success Used to determine organization’s
information requirements
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CSF example
Example Goals CSF
Profit concern Earnings per shareReturn on investmentMarket shareNew product
Automotive industry: stylingquality dealer system cost control
Energy standards
Not for profit Excellent health care Regional integrationImproved monitoring of regulationsEfficient use of resources
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Process of Decision Making
Strategic Decision Making: Determines long-term objectives, resources, and policies
Management Control: Monitors effective or efficient usage of resources and performance of operational units
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Process of Decision Making (cont…)
Operational control: Determines how to perform specific tasks set by strategic and middle-management decision makers
Knowledge-level decision making: Evaluates new ideas for products, services, ways to communicate new knowledge, ways to distribute information
Abdisalam Issa-Salwe, Thames Valley University21
Decisions
Types of management decision:
Structured: Repetitive, routine, procedure have been agreed
to deal with them.
Unstructured: Judgement, insight and evaluation is necessary to
deal with them.
They are usually important decisions that affect the future of the organisation, there are no set procedures.
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Structured or Unstructured
In which town will the new branch be located?
How many extra staff do we hire for the Christmas period?
What can be done about an employee who has had too many sick days off after being warned about their attendance.
Should the stores adopt their own store card?
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Abdisalam Issa-Salwe, Thames Valley University24
Information requirement
Strategic information
Tactical information
Operational information
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Information requirement (cont…) Strategic information: Strategic information is
concerned with the whole organisation and is relevant to the long term operational success.
It is derived from both internal and external sources and is summarised at a high level.
Tactical information: Tactical information is concerned
with activities or departments and is relevant to the short and medium term.
It is primarily generated internally (but may have a limited external component)...Tactical information data is based upon quantitative measures and is prepared routinely and regularly.
Operational information: Operational information is concerned with specific tasks and is relevant to the immediate term.
It is derived from internal sources and is largely quantitative, detailed since it involves the processing of raw data) and is prepared very frequently.
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Strategic level Information
Strategic information is used to plan the objectives of the organisation, and to assess whether the objectives are being met in practice.
Strategic information systems is to help organisations to do things better, to win. (Strategic Information Systems, M Neumann, 1996).
An information system to be strategic it is to aligned with business goals as this has an impact on organisational performance.
Abdisalam Issa-Salwe, Thames Valley University27
Strategic level information (cont…)
Strategic information systems computer systems at any level of an
organisation that change the goals, processes, products, services, or environmental relationships to help the organisation gain a competitive advantage
Information considered as a resource, much like capital and labor
IT-critical competitive strategies: Customer lock-in, customer lock-out, new business entry
Abdisalam Issa-Salwe, Thames Valley University28
Strategic level information (cont…)
What do managers need to know about organisations in order to build and use information systems successfully?
What impact do information systems have on organisations?
How do information systems support the activities of managers in organisations?
How can businesses use information systems for competitive advantage?
Why is it so difficult to build successful information systems, including systems that promote competitive advantage?
Abdisalam Issa-Salwe, Thames Valley University29
Strategic level information (cont…)
Strategy of an organisation is the roadmap towards attainment of its long term goals and objectives.
Effective operationalisation of strategy enables effective and efficient realization of organisational goals.
In the dynamic business environment of today, information has emerged as one of the key drivers in successfully steering the organisational strategy.
Abdisalam Issa-Salwe, Thames Valley University30
Operational-level information
Support operational managers by keeping track of the elementary activities and transactions of the organisation.
The principle purpose of systems at this level is to answer routine questions and track the flow of transactions through the organisation.
Covers things such as sales, receipts, cash deposits, payroll, credit decisions, flow of materials.
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Knowledge-level information
Support knowledge and data workers in an organisation. The purpose of these systems is to help the organisation discover, organise and integrate new and existing knowledge into the business, and to help control the flow of paperwork. These systems, specially in the form of collaboration tools, workstations, and office systems, are the fastest growing applications in business today.
Abdisalam Issa-Salwe, Thames Valley University32
Abdisalam Issa-Salwe, Thames Valley University33
Abdisalam Issa-Salwe, Thames Valley University34
Reference
BPP, Information Systems, Study Text, Paper 2.1, BPP Professional Education, United Kingdom.
Lachlan M. MacKinnon, Information: Types of Information System Systems, http://www.macs.hw.ac.uk/~lachlan/dbislectures/lectures/types.ppt,