Nothing is more central to an organizations effectiveness than its ability to transmit accurate, relevant, understandable information amongst its

employees.
Orlikowski(1992)

Information Systems
Why

Do People Need Information?

Individuals

- Entertainment and enlightenment - Decision making, problem solving and control

Businesses

 Data

vs. Information

Data
A

given, or fact; a number, a statement, or a picture, w/o relation to other things Represents something in the real world The raw materials in the production of information
Information
Data

that have meaning within a context Embodies the understanding of some sort, possibly cause and effect Data after manipulation

Knowledge Appropriate collection of information, such that its intent is useful. Expertise, and skills that are acquired by a person through experience or education Represents a pattern that connects and provides predictability Wisdom When we apply reasoning, perception and analysis to knowledge Understanding of fundamental principles embodied within knowledge.

Path from data to wisdom

What Is a System?
System:

A set of components that work together to achieve a common goal One part of a system where the products of more than one system are combined to reach an ultimate goal system: Stand-alone system that has no contact with other systems system: System that interfaces with other systems

Subsystem:

Closed

Open

Generating Information
Computer-based

ISs take data as raw material, process it, and produce information as output.

Several subsystems make up this corporate accounting system.

Definition
Information Systems An information system(IS) is typically considered to be an organized combination of people, hardware, software, networks and data resources that collect (input), manipulate(processes), and disseminate (output) data and information and provide a feedback mechanism to meet an objective.

Components of IS

Major role of IS

Why are Information Systems Important to Organizations & Society

IS will reduce the number of middle managers. IS will change the managers job. IS impacts employees at work. IS provides quality-of-life improvements.

WHY INFORMATION SYSTEMS

Four powerful worldwide changes have altered the business environment: Globalization Rise of the Information Economy Transformation of the Business Enterprise Emergence of the Digital Firm

1.

2.
3. 4.

Globalization
Management and control in a global marketplace Competition in world markets Global workgroups Global delivery systems

Rise of the Information Economy

Knowledge- and information-based economies New products and services Knowledge: a central productive and strategic asset Time-based competition Shorter product life Turbulent environment Limited employee knowledge base

Transformation of the Business Enterprise

Flattening Decentralization Flexibility Location independence Low transaction and coordination costs Empowerment Collaborative work and teamwork

Emergence of the Digital Firm

Digitally enabled relationships with customers, suppliers, and employees Core business processes accomplished via networks Digital management of key corporate assets Rapid sensing and responding to environmental changes

Categories Of Information System

Examples of IS
Marketing Production Finance HR

Strategic

Competitor survey Advertising

New plant location Production bottleneck Daily scheduling

Alternative financing Variance analysis payroll

Welfare Policy Performance analysis Leave Records

Tactical

Operational

Sales analysis

Different Kinds of IS

Different types of IS

Transaction processing system

Basic business systems that serve the operational level of the organization. Computerized system that performs and records the daily routine transactions necessary to the conduct of the business. Tasks, resources, and goals are predefined and highly structured. Central to a business. Monitor the status of internal operations and the firm's relations with the external environment. Major producers of information for the other types of systems.

Transaction Processing System

Knowledge Work system

Serve the information needs at the knowledge level of the organization. Promote the creation of new knowledge. Ensure that new knowledge and technical expertise are properly integrated into the business. Examples: scientific or engineering design workstations

Office systems

Serve the information needs at the knowledge level of the organization. Tend to process rather than create information. They are information technology applications designed to increase data workers' productivity by supporting the coordinating and communicating activities of the typical office. They coordinate diverse information workers, geographic units, functional areas and serve as clearinghouses for information and knowledge flows. Office systems handle and manage documents, scheduling and communication.

Management Information System

Information systems serving management-level functions. Provide managers with reports or with on-line access to the organization's current performance and historical records. They are oriented almost exclusively to internal, not environmental or external, events. The basic transaction data from TPS are compressed and are usually presented in long reports that are produced on a regular schedule. MIS usually serve managers interested in weekly, monthly, and yearly results not day-to-day activities. Provide answers to routine questions that have been specified in advance and have a predefined procedure for answering them. These systems are generally not flexible and have little analytical capability

MIS taking data from TPS

Report from MIS

Decision Support System

Serve the management level of the organization. Help managers make decisions that are unique, rapidly changing, and not easily specified in advance. They address problems where the procedure for arriving at a solution may not be fully predefined in advance. Besides the internal information from TPS and MIS, they often bring in information from external sources Have more analytical power than other systems. They are built explicitly with a variety of models or large amounts of data that can be analyzed by decision makers DSS are interactive; the user can change assumptions, ask new questions, and include new data.

Voyage estimating DSS

The Difference between MIS and DSS

MIS provides typically fixed, scheduled reports based on routine flows of data and assists in the general control of the business DSS provides managers with tailor-made data (obtained from MIS and external sources) and much greater data analysis capacity. DSS uses models, assumptions, ad-hoc queries, display graphics. DSS emphasizes change, flexibility, and a rapid response

Components of DSS

Types of Decision-Support Systems

Model-driven DSS: Use a strong theory or model to perform what-if and similar analyses, e.g. an economic theory to predict value of dollar versus euro e.g. a business theory to predict market share for a given price

Data-driven (data mining) DSS: Tries to discover relationships between things in large data depots.

Often data from TPS are collected in datawarehouses and then it is analyzed using OLAP and datamining . E.g. Is there a relationship (how strong) between advertising and sales for customers with low income (bottom 25%) for ice-cream products ? Data mining: Can obtain types of information such as associations, sequences, classifications, clusters, and forecasts

Executive Support System

ESS creates a generalized computing and communications environment that can be focused and applied to changing array of problems. Helps senior executives to monitor organizational performance, track activities of competitors, spot problems, identify opportunities and forecast trends.

The Role of Executive Support Systems in the organization ESS can bring together data from all parts of the organization and enable managers to select, access, and tailor them as needed. It tries to avoid the problem of data overload so common in paper reports because of its ability to drill down. It gives managers easy access to external data (including web) like news service, financial market DB, economic information. It includes tools for modeling and analysis. (unlike DSS it caters to a wider range about organization performance)

Business Value of Executive Support Systems Flexibility, data & tools are given to the managers w/o addressing specific problems.

Ability to analyze, compare, and highlight trends

Graphical interface enables users to review data more quickly and with more insight, speeding decision making. Timeliness and availability of data enables more timely decision making, helping businesses move toward a sense-and-respond strategy.

Characteristics of IS
Table 2-1
Type of System ESS

Characteristics of Information Processing Systems

Information Outputs Projections; responses to queries Special reports; decision analyses; responses to queries Summary and exception reports Models; graphics

Information Inputs Aggregate data; external, internal

Processing Graphics; simulations; interactive Interactive; simulations; analysis

Users Senior managers Professionals; technical staff

DSS

Low-volume data or massive databases optimized for data analysis; analytic models and data analysis tools Summary transaction data; highvolume data; simple models Design specifications; knowledge base

MIS KWS

Routine reports; simple models; low-level analysis Modeling; simulations

Middle managers Professionals; technical staff

Office systems
TPS

Documents; schedules

Document management; scheduling; communication

Sorting; listing; merging; updating

Documents; schedules; mail

Detailed reports; lists; summaries

Clerical workers
Operations personnel; supervisors

Transactions; events