Tonga Institute of Higher Education

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Tonga Institute of Higher Education

• IT 245
• Management Information Systems

Lecture 2 Part 1 Foundation Concepts Information
Systems and Technology
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Outcomes!

• At the end of this Chapter you should be able
  to-
• Explain why knowledge of IS is important
• Identify 5 areas of IS knowledge they need
• Provide examples to show how E-Business,
  E-Commerce or enterprise collaboration systems
  could support firms business processes,
  managerial decision making and strategies for
  competitive advantage.
• Provide examples of the component of the real
  world IS
• Provide examples of several major types of IS
• Identify challenges that a business manager might
  face in managing successful business.

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Why IS and IT are Important?

• Same intention for any other subject
• IS IT including E-Business and E-Commerce
  technology and application) are vital component
  of a successful business and organizations.
• Thus constitute an essential field of study in
  Business administration and management.

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IT 245 a Business or an IT Course?
IT245
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You need to know

• IT IS help all kinds of Businesses improve the
  efficiency and effectiveness of their business
  processes, managerial decision making, workgroup
  collaboration and strengthen their competitive
  positions in a rapidly changing marketplace.

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• Try Real World Case 1
• Keplers Books and Magazines
• Small Business Bricks and Clicks Strategies.

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IS Knowledge Business Professionals

• Foundation Concepts Fundamental behavior,
  technical, business, and managerial concepts
  about components and roles of IS.
• Development Process How business professional
  and information specialist plan, develop. and
  implement IS to meet E-Business opportunities
  using several strategic planning and application
  development approaches.
• Management Challenges Challenges of effectively
  and ethically managing E-Business technologies,
  strategies, and security at the end user,
  enterprise and global level of business.
• Information Technologies Major concept
  developments and management issues in IT.

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What is an IS IT

• (1) An IS -is a set of people, procedures, and
  resources that collects, transforms and
  disseminates information in an organization. (2)
  A system that accepts data resources as input and
  processes them into information products as
  output.

• An IT -are Hardware, software, telecommunications,
  database management, and other information
  processing technologies used in computer-based
  information systems.

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System Concepts

• Understanding System Concepts helps us to
  understand many other Concepts-
• Technology That computer networks are systems of
  information processing components that use a
  variety of hardware, software, data and
  telecommunication technologies.
• Applications That electronic business and
  commerce applications involve interconnected
  business information systems
• Development That developing ways to use
  information technologies in business includes
  designing the basic components of IS
• Management That managing IT emphasizes the
  quality, strategic business values, and security
  of an organizations IS.

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System Concepts

• What is a System?
• (1) A group of interrelated or interacting
  elements forming a unified whole.
• (2) A group of interrelated components working
  together toward a common goal by accepting inputs
  and producing outputs in an organized
  transformation process.
• Sometimes called dynamic system and has 3 basic
  interacting components or functions. (input,
  process, output)
• (3) An assembly of methods, procedures, or
  techniques unified by regulated interaction to
  form an organized whole.
• (4) An organized collection of people, machines,
  and methods required to accomplish a set of
  specific functions.

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System Examples

• Example 1
• A manufacturing system accepts raw materials as
  input and produces finished goods as output.
• An information system is a system that accepts
  resources (data) as input and processes them into
  products (information) as output. A business
  organization is a system where economic resources
  are transformed by various business processes
  into goods and services.

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Feedback and Control

• System Concept become more useful by including
  two additional components-
• Feedback is data about the performance of a
  system.
• Control involves monitoring and evaluating
  feedback to determine whether a system is moving
  toward the achievement of its goal.
• The control function then makes necessary
  adjustments to a systems input and processing
  components to ensure that it produces proper
  output.
• A system with feedback and control components is
  sometimes called a Cybernetic System
  (self-monitoring, self-regulating system.)

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Cybernetic System Example

• A thermostat controlled heating system.
  automatically monitors and regulates itself to
  maintain a desired temperature.
• Human body automatically monitors and adjusts
  many of its functions.
• Computers in some Business monitor and control
  manufacturing processes.

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Other System Characteristics

• Systems do not exists in vacuum, rather it exist
  and function in environment containing other
  systems.
• If component of a large system then it is a
  subsystem.
• System may connected to one another by means of a
  shared boundary or interface.
• A system that interacts with other systems in its
  environment is called open system.
• A system that has the ability to change itself or
  its environment in order to survive is an
  adaptive system.

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Example.

• Organizations such as business and government
  agencies are good examples of systems in society,
  which is their environment. Society contain a
  multitude of such systems, including individuals
  and their social, political, and economic
  institutions. Organizations themselves consist of
  many subsystems such as departments, divisions,
  process teams, and other workgroups.
  Organizations are examples of open systems
  because they interface and interact with other
  systems in their environment, Finally,
  organizations are examples of adaptive systems,
  since they can modify themselves to meet the
  demands of a changing world.

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Stakeholders in the Business Environment.

• A business is an example of an organizational
  system where economic resources (input) are
  transformed by various business processes
  (processing) into goods and services (output)
• Information systems provide information
  (feedback) on the operations of the system to
  management of the direction and maintenance of
  the system (Control) as it exchanges inputs and
  outputs with its environment.

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Components of an Information System.

• An information system depends on the resources of
  people (end users and IS specialist), hardware
  (machines and media), software (program and
  procedures), data (data and knowledge bases) and
  networks (communications media and network
  support) to perform input, processing, output,
  storage and control activities that convert data
  resources into information products.

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Information System Resources

• Information System consists of five major
  resources.
• People required for the operation of all
  information systems. These people include End
  User and IT Specialists.
• End users also called clients are people who
  use an information system or the information it
  produces..
• IS Specialist are people who develop and
  operate information system.
• Hardware Resources include all physical devices
  and materials used in information processing. (it
  includes not only machines such as computers and
  other equipment, but also all data media, that is
  tangible objects on which data are recorded, from
  sheets of papers to magnetic or optical disks.

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Information System Resources

• Software Resources includes all set of
  information processing instructions (OS
  Application or Procedures)
• Data Resources are the raw materials of
  information systems. Data constitute valuable
  organizational resources and it must be manage
  effectively to benefit all end users in an
  organization.

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Information System Resources

• Network Resources - includes all
  telecommunications technologies and networks.
  (like Internet, intranets and extranets.
• Communication Media physical components such as
  twisted pair wires, cables, fiber-optic cables,
  microwaves, cellular and satellites wireless
  technologies
• Network Support include people and all of the
  hardware, software, and data technologies that
  directly support the operations and use of a
  communication network.

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Data versus Information

• People uses the terms Data and information
  interchangeably.
• Data - data are raw material resources that are
  processed into finished information products.
• the plural of datum which are raw fact or
  observations about physical phenomena or business
  transactions. Data are objective measurements of
  the attributes (the characteristics) of entities
  (such as peoples. places, things, and events).
• Information are data that have been converted
  into meaningful and useful context for specific
  end users.

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Information System Activities

• Input of Data Resources
• Processing of Data into information
• Output of Information Products
• Information Quality
• Storage of Data Resources
• Control of System Performance.

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Recognizing Information System

• As Business professional you should be able to
  recognize the fundamental components of
  information Systems you encounter with in the
  real world.
• The people, hardware, software, data, and network
  resources they used.
• The types of information products they produce.
• The way they perform input, processing, output,
  storage, and control activities.
• With these kind of understanding, you will be a
  better user, developer, and manager of
  information systems.

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Summary Part 1

• Why IS and IT are Important?
• IS Knowledge Business Professionals
• What is an IS IT
• System Concepts
• Feedback and Control
• Cybernetic System
• Stakeholders in the Business Environment.
• Components of an Information System
• Information System Resources
• Data versus Information
• Information System Activities
• Recognizing Information System.

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• Part 2

Foundation Concepts 2 Business Applications,
Development and Management
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Roles of IS Applications in Business

• Support of its strategies for competitive
  advantages.
• Support of decision making by its employees and
  managers
• Support of its business processes and operations

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Real World Case 2

• Discuss Real world Case 2
• CNET, Oxygen Media, USA Networks, and Dell
  Computer Business Lessons of E-Commerce Warriors

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Trends in Information Systems

• IS expand significantly over the years
• EDP Electronic Data Processing
• MIS Management Information System
• DSS Decision Support Systems
• EIS Executive Information Systems
• ES Expert Systems
• SIS Strategic Information Systems
• Electronic Business and Commerce

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Expanding Roles of Business Applications of IS

• See how the roles of computer based information
  systems have expanded over time.
• Note the impact of these changes on the end users
  and managers of an organization

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E-Business

• What is an E-Business?
• the use of Internet technologies to inter-network
  and empower business processes, electronic
  commerce, and enterprise communication and
  collaboration within a company and with its
  customers, suppliers, and other business
  stakeholders.

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E-Business Enterprise

• Business are becoming E-Business Enterprises
• Internet - network of networks
• Intranet Internet-like network within an
  organization.
• Extranet A network that links selected
  resources of a company with its customers,
  suppliers, and other business partners, using the
  Internet or private networks to link the
  organizations intranets.

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• An E-Business enterprise depends on the Internet,
  intranets and extranets to -
• Reengineer and revitalize internal business
  processes
• Implement electronic commerce systems among
  businesses and their customers and suppliers
• Promote enterprise collaboration among business
  teams and workgroup.

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The E-Commerce applications of some top-rated
companies.
E-Commerce Site Markets Types of Products
Amazon.com B2C Physical Goods books, music, videos, toys, electronic, etc Services Auctions, gifts services
eBay.com C2C, B2C Services Auction specialist
Etrade B2C, B2B Information Content stock quotes, investment information Services Financial services
B2B Business-to-Business B2C
Business-to-consumer C2C Consumer-to-consumer

• Notice the range of products and services they
  offer to their online customers.

Exercise - Find some other examples of
E-Commerce applications from the web. (one for
each E-commerce type)
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Type of Information System

• The application of information systems in the
  real world can be classified in several different
  ways

• Operations and management main purpose to
  support business operations and managerial
  decision making

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Operation Support System

• Transaction Processing Systems- Process data
  resulting from business transactions, update
  operational databases, and produce business
  documents such as sales, inventory and accounting
  systems.
• Process Control System- Monitor and control
  Industrial Processes. Eg. Petroleum refining,
  power generation, and steel production systems.
• Enterprise Collaboration Systems- Support team,
  workgroup and enterprise communication and
  collaboration. Eg. E-mail, chat, and video
  conferencing.

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Manager Support Systems

• Management Information Systems- Provide
  information in the form of prespecified reports
  and displays to support business decision making.
  Eg, sales analysis, production performance and
  cost trend reporting systems
• Decision Support Systems- Provide interactive ad
  hoc support for the decision-making processes of
  managers and other business professionals. Eg.
  Product pricing, profitability forecasting and
  risk analysis systems.
• Executive Information Systems- Provide critical
  information from many sources tailored to the
  information needs of executives. Eg. System for
  Easy analyses of business performance, action of
  competitors, and economic developments to support
  strategic planning.

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Task For You!!!

• There are other Categories of IS as it will be
  mention later, and I would like you to define
  those Categories.
• We will discuss your solution in our next class.

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Other Classification of IS

• Expert Systems-
• Knowledge Management Systems-
• Functional Business Systems-
• Strategic Information Systems-

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Developing Business/ IT Solutions

• Developing information systems solutions to
  business problems can be viewed as a multi-steps
  process or cycle

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Success and Failure with IT

• Computer-based information systems heavily
  dependent on information technologies - are
  designed, operated and used by people in a
  variety of organizational settings and business
  environment.

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Success and Failure with IT

• Success mainly measured by its efficiency
• In terms of minimizing costs, times and the use
  of information resources.
• Success should also be measured by the
  effectiveness of information technology
• in supporting an organizations business
  strategies, enabling its business processes,
  enhancing its organizational structures and
  culture, and increasing the customer and business
  values of the enterprise.

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Success and Failure with IT

• On the other hand it is important to realize
  that IT IS can be mismanaged and misapplied so
  that IS performance problems lead to both
  technological and business failure.

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Global Business Environment

• Inter-network IS IT must be managed to support
  E-Business Strategies, processes and
  Organizational structures and Cultures to
  increase the customer and business value of an
  E-Business enterprise in a dynamic global
  business environment.

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Ethics and IT

• Managers, Business Professionals and knowledge
  worker should consider the ethical
  responsibilities generated by the use of IT.
• Eg improper, irresponsible or harmful to other
  individuals or to society
• What is the proper use of the internet?
• What does it takes to be a responsible end user
  of IT?
• How can you protect yourself from computer crime
  and other risks of IT?...

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Ethics and IT
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Challenges of IT Careers

• IT IS have created interesting, highly paid and
  challenging career opportunities for many people.
• Organizations continue to expand their use of
  information technology creating different IT
  related careers

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The IS Function

• Successful management of IS and IT presents major
  challenges to business managers and professional
  thus IS functions represents-
• A major functional area of business that is as
  important to business success as the functions of
  accounting, finance, operations management,
  marketing, and human resources management.
• An important contributor to operational
  efficiency, employee productivity and morale, and
  customer service and satisfaction.
• A major source of information and support needed
  to promote effective decision making by managers
  and business professionals.
• A vital ingredient in developing competitive
  products and services that give an organization a
  strategic advantage in the global marketplace.
• A dynamic, rewarding, and challenging career
  opportunity for millions of men and women.
• A key component of the resources, infrastructure,
  and capabilities of to day's E-Business
  enterprises.

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Summary

• Roles of IS Applications in Business
• Trends in Information Systems
• E-Business Enterprises
• The E-Commerce applications
• Type of Information System
• Other Classification of IS
• Developing Business/ IT Solutions
• Success and Failure with IT
• Global Business Environment
• Ethics and IT
• Challenges of IT Careers
• The IS Function