Lecture

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Lecture 1 (Part 1)Foundations of Information
Systems in Business

• Prof M Benyoucef
• benyoucef_at_telfer.uottawa.ca
• [phone], 4787
• Office DMS 6144

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Outline

• Why are information systems (IS) important in
  Business?
• What is an IS?
• Dimensions of IS
• The MOT Framework
• Mini-case UPS (Pages 16-17)

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Why are IS important?

• IS represent a large capital investment as
  managers, you need to invest this capital wisely
• IS help transform organizations
• Effect of the Internet wireless technologies on
  organizations individuals
• e-commerce social networking etc.
• Businesses use IS to respond quickly to consumers
• Businesses use IS to optimize operations
• IS enable the global economy
• IS enable the digital firm (see next slide)

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IS are used for managing internal processes for
coordination with suppliers and partners and for
e-commerce transactions with customers and
suppliers
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Why are IS important?

• IS can be a strategic necessity
• Most businesses could not survive without them
• IS can bring competitive advantage
• They allow firms to differentiate themselves from
  their competitors
• IS provide better decision-making capabilities
• IS enable companies to create new products,
  services, and business models

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What is an IS?Definition

• A set of interrelated components that collect
  (or retrieve), process, store, and distribute
  information to support decision making and
  control in an organization

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What is an IS?data, information, knowledge

• Data Raw facts representing events such as
  business transactions
• Information Data shaped into a form that is
  meaningful and useful to human beings
• Knowledge created by analyzing information may
  lead to action

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What is an IS?data, information, knowledge
From the checkout counter of a supermarket -
details of transactions
Total sales of Brite Dish Soap, per region, per
store
Knowledge how is this brand of soap doing in
the Northwest compared to other brands?
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What is an IS?BI and KM

• Business Intelligence (BI) converts data into
  useful info and, through human analysis, into
  knowledge
• Knowledge Management (KM) the process of
  acquiring, organizing, and communicating knowledge

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What is an IS?Functions of an IS
INPUT
OUTPUT
Processing Classify Arrange Calculate
FEEDBACK

• Input captures or collects raw data
• Processing converts raw data into information
• Output transfers information to people or other
  systems
• Feedback output to help people evaluate input

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What is an IS?Who interacts with an IS
ENVIRONMENT
Suppliers
Customers
ORGANIZATION
Information System
INPUT
OUTPUT
Processing Classify Arrange Calculate
FEEDBACK
Regulatory Agencies
Competitors Partners
Stockholders
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What is an IS?Flow of information
Top Management Level
Summarized
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Detailed
Low Operational Level
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Source Haag et al., 2004
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What is an IS?Flow of information

• e.g., horizontal flow of information
• Order Fulfillment is a process involving
  activities performed by 3 departments Sales,
  Accounting, Manufacturing

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What is an IS?Computer based IS

• Computer Based Information System (CBIS)
• Relies on computer hardware and software for
  processing and distributing information

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Dimensions of IS

• Using IS effectively requires understanding the
  organization, management and information
  technology (IT) shaping the systems
• ? IS Literacy

Computer Literacy
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Dimensions of IS

• IS Literacy and MIS
• The field of Management Information Systems (MIS)
  deals with behavioral and technical issues
  surrounding the development, use, and impact of
  information systems in organizations

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Dimensions of IS
Organization - People - Structure - Business
processes - Culture - Politics

Management managers who understand the role of
IS in creating business value
Information Technology (IT) - Hardware -
Software - Data Management Technology -
Networking Telecommunications Technology
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Dimensions of IS

• The IT dimension
• Hardware Physical equipment (computers,
  input/output devices, storage devices, etc.)
• Software Detailed preprogrammed instructions
• Data Management Software for managing the data
  on storage devices
• Networking Telecommunications Technology
  Transfers data from one physical location to
  another

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Dimensions of IS

• The IT dimension
• Internet international network of many networks
• Intranets internal corporate networks
• Extranets private intranets extended to
  authorized external users
• WWW system with universal standards for storing,
  retrieving, displaying information in a
  networked environment

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The MOT Framework

• MOT (Management, Organization, Technology)
  Framework
• A diagram that graphically illustrates how
  management, organization, technology elements
  work together to create an IS solution to a
  business problem

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The MOT Framework

• Let us revisit the Toyota Case discussed on Fri
  Sep 05 (Go to the course website, click on
  Schedule Slides)

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Mini-case UPS Competes Globally with IT (Pages
16-17)
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UPS

• www.ups.com
• World largest air ground package service
• Started in 1907 by 2 teenagers from Seattle
• The promise best service lowest rates
• Delivers 14.1 million items a day worldwide
• Spends billions of dollars on IT to boost
  customer service while keeping costs low

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UPS Information Technology
UPS Truck Driver Picks up the package
Handheld Computer called Delivery Information
Acquisition Device (DIAD)
UPS Main Computers
Cellular Telephone Network
ADAPTER
- Customers Signature - Pickup time - Etc.
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UPS Information Technology
UPS Main Computers
Along the route from sender to receiver
CSR (Customer Service Representative)
Package
Internet
Services on the UPS website track packages,
calculate shipping rates, schedule pickups,
payment, etc.
Customers tracking their packages
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UPS - other services

• Businesses can embed UPS functions (tracking,
  etc.) into their own website
• UPS implemented custom built software to optimize
  package loading and delivery (using operations
  research)
• UPS manages other companies logistics through
  its Supply Chain Solutions division

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Question 1

• What are the inputs, processing, and outputs of
  UPSs package tracking system?
• Inputs
• package information, customer signature, pickup,
  delivery, current location (while en route), etc.
• Processing
• data transmitted to a central computer and
  stored, organized so that it can be searched
• Outputs
• pickup delivery times, location while en route
• various reports, such as all packages for a
  specific account
• summary reports for management

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Question 2

• What technologies are used?
• Handheld computers (DIADs), bar code scanners,
  telecommunications for transmitting data,
  cellular phone networks, the Internet,
  computers
• How are these technologies related to UPSs
  business strategy?
• UPS strategy best service and lowest rates
• technology enables data to flow seamlessly
  throughout UPS
• ? technology enables UPS to be more competitive,
  efficient, and profitable

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Question 3

• What problems do UPSs IS solve?
• The need to meet high customer expectations
• The need to keep customers from going to the
  competition
• The need to lower costs by optimizing operations
  (truck loading, delivery, etc.)

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Question 3

• What would happen if these systems were not
  available?
• UPS might not be able to compete effectively
• UPS would, as it has through most of its history,
  attempt to provide information to its customers,
  but at higher prices

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MOT Framework

• - High customer expectations
• Customers have a choice to go elsewhere
• Need to optimize operations

• Consolidate UPSs leading position
• Monitor the performance of the delivery process

Organizational processes designed around package
data entry/scanning in real time
- Increase customer satisfaction - Increase
revenue
- Track packages - Generate reports for
management - Manage business accounts
Web based tracking system that is aware of the
location of a package as it moves from pickup to
delivery