DCS 5148 Introduction to Information System

Topic 1 / Chapter 1: Business Information Systems in Your Career

Six Important Business Objective:

i. Operational Excellence
ii. New Products, Services, and Business Model
iii. Customer and Supplier Intimacy
iv. Improved Decision Making
v. Competitive Advantage
vi. Survival

Difference between Information Technology and Information System

Information technology (IT): Consists of all the hardware and software that a firm
needs to use to achieve its business objectives. Information systems are more
complex.
Information system: Can be defined technically as a set of interrelated
components that collect (or retrieve), process, store, and distribute information to
support decision making and control in an organization.

Data: streams of raw facts, not meaningful

Information: data shaped into meaningful, useful form

Activities in an information system:

1. Input: you key in for trimester 1

2. Processing: when you key in for the trimester to check result, it will process to the
result page
3. Output: you click to view your result and you can print your result
4. Feedback: you can evaluate in camsys system at the end of the trimester

Function of an Information System:

Information systems produce the information an organization needs and help them
improve the decision making. Additionally, information systems help businesses better
understand various problems.

Problem Solving: Four-Step Process

1. Problem Identification: involves understanding what kind of problem is being

presented and identifying people, organizational, and technology factors.
(e.g.: Do not want to be in Madam Shikins class)
2. Solution Design: involves designing several alternative solutions to the problem
that has been identified.
(e.g.: register other lecturers class)
3. Choice: Selecting the best solution, taking into account its costs and the available
resources and skills in the business
(e.g.: choose the class section not under Madam Shikin)
4. Implementation: entails purchasing or building hardware and software, testing the
software, providing employees with training and documentation, managing
change as the system is introduced into the organization, and measuring the
outcome.

Information Systems is used EVERYWHERE, in every occupation:

i. Accounting: rely on information systems to summarize transactions, create

financial records, organize, data, and perform financial analysis.
ii. Financing: must understand of financial applications and design factors to
ensure firms are able to manage their investments, cash, and risks.
iii. Marketing: ability to understand Internet and marketing database systems, and
how they impact traditional marketing activities, such as brand development,
production promotion, and sales.
iv. Management: knowledge of new hardware and software that can make
management more efficient, enhance leadership and coordination capabilities,
and improve the achievement of corporate business objectives in the broadest
sense.

Topic 2 / Chapter 2: Global E-business and Collaboration

Hierarchy of Management:

1. Senior Management: highest level of organizational management, responsible for

long-term strategic decisions about products and services. (e.g.: CEO)
2. Middle Management: carries out the programs ad plans of senior management.
(e.g.: specialist, scientist)
3. Operational Management: responsible for monitoring the daily activities of the
business (e.g.: clerk, supervisor)

Four Basic Business Functions (a.k.a Functional Perspective):

1. Manufacturing and Production: responsible for actually producing the firms

goods and services
2. Sales and Marketing: responsible for selling organizations products or services
3. Finance and Accounting: responsible for managing the firms financial assets, and
maintaining and managing the firms financial records
4. Human Resource: responsible for attracting, developing, and maintaining the
firms workforce

Five Basic Business Entities (a.k.a Constituency Perspective):

1. Suppliers
2. Customers
3. Employees
4. Invoices/Payments
5. Products and Services
Types of IS

1. Transaction Processing Systems (TPS): keep track of the elementary activities and
transactions of the organization, such as sales, receipts, cash deposits, and etc.
2. Management Information Systems (MIS): summarizes and reports on the
companys basic operations using data supplied by transaction processing systems
3. Decision Support Systems (DSS): supports non-routine decision making for
middle management. Focus on problems that are unique and rapidly changing
4. Executive Support Systems (ESS): address non-routine decisions for senior
management. Focus on decisions requiring judgment, evaluation, and insight,
because there is no agreed on procedure arriving at a solution. Help senior
management make decisions about long-term trends such as What will the
employment levels be like in 5 years?

Enterprise Application

Definition: systems that span functional areas, focus on executing business processes
across the business firm, and include all levels of management.

4 Major Types of EA:

1. Enterprise Systems: collect data from various functions of a business and store the
data in a single central data repository
2. Supply Chain Management Systems: help businesses manage relationships with
their suppliers
3. Customer Relationship Management Systems: help firms manage their
relationships with their customers.
4. Knowledge Management Systems: enable organizations to better manage
processes for capturing and applying knowledge and expertise.

Other Systems Serve Managers and Improve Organizational Performance:

1. E-business: refers to the use of digital technology and the internet to execute the
major business processes in the enterprise.
2. E-commerce: part of e-business that deals with the buying and selling of goods
and services over the internet

Role of the Information Systems Functions in a Business

Information Systems Department: the formal organizational unit responsible for
information technology services

Positions:

1. Programmers: highly trained technical specialists who write the software

instructions for computers
2. Systems Analysts: constitute the principal liaisons between the information
systems group and the rest of the organization
3. Information Systems Manager: leaders of teams of programmers and analysts,
project managers, physical facility managers, telecommunications managers. Or
database specialists.
4. Chief Information Offer: senior manager who oversees the use of information
technology in the firm.
5. Chief Security Officer: in charge of information security for the firm and is
responsible for enforcing the firms information security policy.
6. Chief Privacy Officer: responsible for ensuring that the company complies with
existing data privacy laws
7. Chief Knowledge Officer: responsible for the firms knowledge management
program.

End Users: representatives of departments outside of the information systems groups for
whom applications are developed

Collaboration:

What are Collaboration:

1. Changing nature of work

2. Growth of professional work
3. Changing organization on firm
4. Changing scope of the firm
5. Emphasis on innovation
6. Changing culture of work and business

Business Benefits of Collaboration and Social Business

Investment in collaboration technology can return large rewards, especially in sales and
marketing, research and development.
 1. Productivity: sharing knowledge and resolving problems
2. Quality: faster resolution of quality issues
3. Innovation: more ideas for products and services
4. Customer Service: complaints handled more rapidly
5. Financial Performance: generated by improvements in factors above

Topic 3 / Chapter 3: Achieving Competitive Advantage with Information Systems

Porters Five Forces Model

1. Traditional Competitors: companies which produce similar products and services

within the market. Firms compete to attract consumers and make sure they have
the strategy and resources to keep their customers satisfied.
2. New Market Entrants: companies that are entering the business industry. They can
have high or low barriers of entry depending on how high are the capital costs.
Newer companies may have advantages of newer equipment, younger workforce
and so on.
3. Substitute Products and Services: Substitutes customers can purchase if the prices
too high. E.g.: Internet music service versus CDs
4. Customers: A firm makes sure that they have different choices of suppliers so as
to regulate and receive raw materials on time in order to meet customers needs.
5. Suppliers: the more suppliers a firm has, the greater control it can exercise over
suppliers
Information System Strategies

1. Low-cost Leadership: Use information systems to achieve the lowest operational

costs
2. Products Differentiation: counteracts competitive forces and deals with mass
customization
3. Focus on Market Niche: use information systems to enable specific market focus,
and serve narrow target
4. Strengthen Customer and Supplier Intimacy: strong linkages to customers and
suppliers increase switching costs and loyalty

The Internet Impact on Competitive Advantage

1. Enables new products and services

2. Lower barriers to entry
3. Change balance of power of customers and suppliers
4. Transform some industries
5. Creates new opportunities for creating new markets, building brands, and large
customer bases

Business Value Chain Model

Helps firms decide what information systems ads are value to the firm

1. Primary Activities: related to the production and distribution of the firms

products and services, which create value for the customer
2. Support Activities: makes the delivery of primary activities possible and consist
of organization infrastructure, human resource, technology and procurement.
3. Benchmarking: compare the efficiency and effectiveness of the business processes
against strict standards.
4. Best Practices:
Global Business and System Strategies

1. Domestic Exporters: heavy centralization of corporate activities in home country

2. Multinationals: concentrates financial management at central home base while
decentralizing production, sales, and marketing to other countries
3. Franchisers: product created, designed, financed, and initially produced in home
country but rely on foreign units for further production, marketing, and human
resource
4. Transnational: regional headquarters and perhaps world headquarters; optimizing
resources as needed

Global System Configuration

1. Centralized Systems: All development and operation at domestic home base

2. Duplicated Systems: development at home base but operations managed by
autonomous units in foreign locations
3. Decentralized Systems: each foreign unit designs own solutions and systems
4. Networked Systems: development and operations occur in integrated and
coordinated fashion across all units

Topic 5 / Chapter 11: Improving Decision Making and Managing Knowledge

Types of Decisions

1. Structured: Decision maker must provide judgment to solve problem. Deal with
Operational Management.
2. Semi structured: Involve definite procedure for handling them so do not have to
be treated as new. Deal with Middle Management.
3. Unstructured: Only part of problem has clear-cut answer provided by accepted
procedure. Deal with Senior Management

Example of Most Frequent Decisions People May Be Required To Solve At Work

1. Operational Management (Individual Employees and teams): Determine

overtime eligibility, Restock inventor, Offer credit to customers, and determine
special offers to customers (Structured).
2. Middle Management: Design a marketing plan, develop a departmental budget,
and design a new corporate Website (Semi-structured).
 3. Senior Management: Decide entrance or exit from markets, approve capital
budget, and decide long-term goals (Unstructured).

The Decision-Making Process

1. Intelligence: discovering, identifying, and understanding the problems the

organization encounter
2. Design: Looking for a solution
3. Choice: Selecting best solution
4. Implementation: making chosen alternative work and monitoring how well
solution is working.

How Do Business Intelligence and Business Analytics Support Decision Making

Six Elements in Business Intelligence Environment:

1. Data from business environment

2. Business intelligence infrastructure
3. Business analytics toolset
4. Managerial users and methods
5. Delivery platform (DSS, MSS, ESS)
6. User interface

Business Intelligence and Analytics Capabilities

Production Reports: predefined, based on industry standards

Parameterized Reports: E.g. pivot tables (Excel)
Dashboards/Scorecards
Ad-hoc Query/Search/Report Creation
Drill-down
Forecasts, Scenarios, Models: What-if scenario analysis, statistical analysis
Examples of Business Intelligence Pre-Defined Reports

Business Functional Area Production Reports

Sales Sales forecasts, sales team performance, cross selling,
sales cycle time
Service / Call Center Customer satisfaction, service cost, resolution rates, churn
rates
Marketing Campaign effectiveness, loyalty and attrition, market
basket analysis
Procurement and Support Direct and indirect spending, off-contract purchases,
supplier performance
Supply Chain Backlog, fulfillment status, order cycle time, bill of
materials analysis
Financials General ledger, accounts receivable and payable, cash
flow, profitability
Human Resources Employee productivity, compensation, workforce
demographics, retention

Predictive Analytics

Predictive analytics are being built into mainstream applications for everyday decision
making by all types of employees, especially in finance and marketing.

E.g.: eBays hunch.com to predict user affinities for items not immediately obvious

Location Analytics

Big data analytics that uses location data from mobile phones, sensors, and maps

E.g.: Waze, Google helping a utility company view customer costs as related to location.

E.g.: Can predict to open a photocopy shop or a restaurant around Ayer Keroh
Enterprise-Wide Knowledge Management Systems

Three Kinds of Knowledge:

1. Structured: structured text documents

2. Semi structured: e-mail. Voice mail, digital pictures
3. Tacit Knowledge (unstructured): knowledge residing in heads of employees,
rarely written down.

Types of Information Systems Used for Enterprise-Wide Knowledge Management System

1. Enterprise Content Management System: has capabilities for classifying,

organizing, and managing structured and semi structured knowledge and making
it available throughout the enterprise
2. Locating and Sharing Expertise: knowledge network systems, provide online
directory of corporate experts in well-defined knowledge domains and use
communication technologies to make it easy for employees to find appropriate
expert in firm
3. Learning Management Systems (LMS): Provide tools for management,
delivery, tracking, and assessment of employee learning and training.
4. Knowledge Work Systems (KWS): creates, stores and applies knowledge. This
helps businesses to learn from what is happening around them and to include that
information into its business process and decision making.
Topic 6 / Chapter 12: Building Information Systems

Four Steps to Build an Information System

1. Define and understand the problem

2. Develop alternative solutions
3. Choose a solution
4. Implement the solution

* The first three steps are called systems analysis

Alternative Methods for Building Information Systems

a. Traditional Systems Development Lifecycle

Oldest method for building systems in the system life cycle, which requires that
information systems be developed in formal stages.
- Advantage:
i. Easy to understand
ii. Quality built-in throughout
iii. Configuration management
iv. Clear and defined stages
v. Forced to do analysis and design first
- Disadvantages
i. Time between agreeing requirements and delivery of final products
ii. Risk in confirming customer requirements and user-interface, as there
is no revision
iii. Very rigid and costly
b. Prototyping
In prototyping, requirements are specified dynamically with experimental systems
in rapid, informal, and iterative process; users continually interact with the
prototype.
- Advantage of Prototyping
The process of developing a prototype consists of four steps. Because a
prototype can be developed quickly and inexpensively, systems builders can
go through several iterations, repeating steps 3 and 4, to refine and enhance
the prototype before arriving at the final operational one.

- Disadvantage of Prototyping
Rapid prototyping can gloss over essential steps in systems development. If
the completed prototype works reasonably well, management may not see the
need for reprogramming, redesigned, full documentation in testing to build a
polished production system. This can backfire later with large quantities of
data or large numbers of users in a production environment.

c. End-User Development
Uses fourth-generation languages to allow end-users to develop systems with little
or no help from technical specialists.
- Fourth generation languages: less procedural than conventional programming
languages:-
i. PC software
ii. Query languages
iii. Report generators
iv. Graphics languages
v. Application generators
vi. Application software packages
vii. Very high-level programming languages

- Advantages:
i. More rapid completion of projects
ii. High-level of user involvement and satisfaction
- Disadvantages:
i. Not designed for processing-intensive applications
ii. Inadequate management and control, testing, documentation
iii. Loss of control over data
 d. Application Software Packages
Save time and money, many offer customization features allows software can be
modified to meet unique requirements without destroying integrity of package
software. The key criteria in evaluating application software packages are:
functions, flexibility, user-friendliness, hardware, software resources, database
requirements and cost. The package evaluation process is often based on a request
for proposal (RFP), which is a detailed list of questions submitted to vendors of
packaged software.

e. Outsourcing
Several types:
i. Cloud and SaaS Provider: subscribing companies use software and
computer hardware provided by vendors
ii. External vendors hire to design, create software. Driven by firms need for
additional skills, resources, assets, and driven by cost-savings

Advantages:

- Allows organization flexibility in IT needs

Disadvantages:

- Hidden costs such as identifying and selecting vendor, and transitioning to

vendor
- Opening up proprietary business processes to third party

Application Development for the Digital Firm

Rapid Application Development (RAD)

Process of creating workable systems in a very short period of time, utilize
techniques such as:
- Visual programming and other tools for building graphical user interfaces
- Iterative prototyping of key system elements
- Automation of program code generation
- Close teamwork among end users and information systems specialists.

Joint Application Design (JAD)

Used to accelerate generation of information requirements and to develop initial
systems design. Brings end users and information systems specialists together in
 interactive session to discuss systems design. Can significantly speed up design
phase and involves users at intense level

Agile Development
Focuses on rapid delivery of working software by breaking large project into
several small sub-projects. Emphasizes face-to-face communication over written
documents, allowing collaboration and faster decision making

Component-Based Development
Groups of objects that provide software for common functions such as online
ordering, and can be combined to create large-scale business applications