MIS Information Systems in Organizations Dave Salisbury ( ) (web site) UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. Information Systems: Creating Business Value John Wiley & Sons, Inc. Mark Huber, Craig Piercy, and Patrick McKeown Chapter 1 Introduction to Information Systems

What We Will Cover: History of IS in organizations Business Organizations and the Business Environment? What are Data, Information, and Knowledge? What is an Information System? UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. Student ROI (Return on Investment) Your investment of time and effort in this course will result in your being able to answer these questions: 1.How do different factors in a business environment, such as the Internet and globalization, impact the need for timely data, information, and knowledge? 2.What role does the data-information-knowledge continuum play in your success as a current student and future knowledge worker? 3.How do the different types of information systems (IS) help knowledge workers manage data, information, and knowledge?

The point of this exercise… Non-IS Majors: Prepare you for your future as a knowledge worker. IS Majors: Prepare you to understand business requirements and needs of system users. Business and information first, then IT. What we do with IT to create business value is more important than the IT itself. UDMIS.info

History of IT&S in Business Early Days –Automation –Accounting focus Later –Support business –Functional focus Today –Empower business –Strategic & process focus Trend to observe –We tend to first do what we already know how to do with technology –Then, once we learn about the technology we start doing new things with it… –Changing how business implements processes UDMIS.info

Lyons Bakery and Bank of America Lyons Bakery –LEO (short for “Lyons Electronic Office”) –Developed primarily by David Caminer –First information system used in business Bank of America –ERMA –MICR –Both developments led by Al Zipf –Systems designed to handle checks and banking data UDMIS.info

Views on the role and importance of Information Systems Our IS dept makes a major contribution to profitability. We expect our CIO to provide ideas for improving company performance just the same way as we rely on sales, manufacturing and engineering executives for their contributions. Indeed, since the centrality of IS to our business makes the CIO job critical. IT is our top strategic concern, not because it outweighs everything else, but because we are unsure what to do with it. Although we understand other parts of our business strategy, IS issues keep eluding us. We make good technical decisions and our systems work well but we can't seem to grasp the bigger picture. Don’t even ask about our e-business efforts. Our IT manager does a fine job. He handles all those technical details no one else understands quickly and without complaining. We can always count on Charlie We have shaped up data processing very nicely since the early 1990's. We have developed many new systems to support our operations. As computing costs come down, we expect that more systems will be justified and implemented UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. Knowledge Work and Knowledge Workers What is knowledge work? What is a knowledge worker? What are some examples of verbs associated with the activities of knowledge workers?

Copyright 2007 John Wiley & Sons, Inc. What are Business Organizations? For our purposes, a business is an organization with one or more people who: (1) (2) (3) One of the most important factors influencing a business is the business _____________.

Copyright 2007 John Wiley & Sons, Inc. The Business Environment

Copyright 2007 John Wiley & Sons, Inc. Why learn about a business organization? You will spend much of your life in and around a business organization: Approximately, 86,000 hours (40 hrs/wk x 50 wks/yr x 43 years) at work in an organization over 16 times as many hours as you spent working to earn your degree

Changing Business Organizations Businesses are in essence systems that have goals, receive inputs, transform these into outputs, and interact with their environment. That the environment is more dynamic means businesses must be also Increasingly, organizations are turning to technology and information systems to keep pace with dynamic business environments. Organizations rely on this digital information to gain competitive advantage and to respond quickly to opportunities and other changes in the business environment. As organizations strive to respond quickly, they are changing the way they organize or structure themselves. Much of this change involves globalization and the Internet. UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. Globalization and the Internet Globalization means that modern businesses are using information technology to: –(1) –(2) –(3) Much of globalization is built around the __________, which is simply a large number of cooperating computer networks that use the same rules for sending messages.

Copyright 2007 John Wiley & Sons, Inc. What is the most widely used component of the Internet and why is this component so useful and so popular? What is e-commerce? Globalization and the Internet (cont.)

Digitization, IS and new opportunities for business Digitization turns information into zeros & ones Digital information (be it text, audio, or video) is more easily transmitted with no loss of quality Resulting is mixing of traditionally separated businesses This is most pronounced in information intense businesses – once you have information you can digitize it and move it around with no quality loss to anywhere UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. The Data—Information—Knowledge Continuum Given the importance of data, information, and knowledge, let’s look deeper into the meaning of each word. Data are … Information is … Knowledge is … What about wisdom …?

Copyright 2007 John Wiley & Sons, Inc. Becoming a Knowledge Worker According to Peter Drucker: knowledge workers are people who: [Drucker, 1994, pages 53-80]

Copyright 2007 John Wiley & Sons, Inc. Becoming a Knowledge Worker Why would a business hire you? Knowledge work involves …? To be a successful knowledge worker, you need to build on the two types of knowledge that you possess: ________ knowledge and ________ knowledge.

Copyright 2007 John Wiley & Sons, Inc. Two Types of Knowledge Explicit knowledge – Tacit knowledge -

What is a System? Manufacturing Process Input of Raw Materials Output of Finished Products Environment Other Systems Control by Management Control Signals Control Signals Feedback Signals Feedback Signals System Boundary UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. What is an Information System (IS)? An information system (IS) is …? What can information systems do for individuals and organizations

Technology versus Systems Technology –Computers –Telephones –Smart Cell Phones –Tools Systems –Intelligent application of technology (tools) along with people and procedures to do something useful UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. Why Study Information Systems? Information is … Information systems and technology are the tools business people use to …? Without IS, the modern business organization would not be able to ________ _________.

Why Study Information Systems? You will be more effective in your chosen career if you understand how successful information systems are built, used, and managed. You also will be more effective if you know how to recognize and avoid unsuccessful systems and failures. According to the US Bureau of Labor Statistics, “Top seven fastest growing occupations fall within IT or computer related field” Developing “Computer” Literacy will only enhance your “Information” Literacy UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. IPO Model of an Information System

Systems Interact w/ Other Systems UDMIS.info

Why Businesses Invest in IS IS Investment Profit Operational Systems/ERP/ TPS Revenue Strategic Systems/CRM Costs + – + – Management Support & Decision Systems + – UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. Information System Components ConceptDefinition Input Process Output Data Information Knowledge System

Copyright 2007 John Wiley & Sons, Inc. Information System Components (Cont.) ConceptDefinition People Information Technology Decision Business Value

Copyright 2007 John Wiley & Sons, Inc. Types of IS There are a number of types of IS that are widely used in creating business value: –Transaction Processing Systems (TPS) –Management Information Systems (MIS) –Decision Support Systems (DSS) –Enterprise Resource Management (ERP) Systems –Customer Relationship Management (CRM) Systems

Why Businesses Invest in IS IS Investment Profit Operational Systems/ERP/ TPS Revenue Strategic Systems/CRM Costs + – + – Management Support & Decision Systems + – UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. IS-Type: TPS Transaction Processing System (TPS) What do they do? – How does this create business value? –

Copyright 2007 John Wiley & Sons, Inc. IS-Type: MIS Management Information System (MIS) What do they do? – How does this create business value? –

Copyright 2007 John Wiley & Sons, Inc. IS-Type: DSS Decision Support System (DSS) What do they do? – How does this create business value? –

Copyright 2007 John Wiley & Sons, Inc. IS-Type: ERP Enterprise Resource Planning (ERP) What do they do? – How does this create business value? –

Copyright 2007 John Wiley & Sons, Inc. IS-Type: CRM Customer Relationship Management (CRM) What do they do? – How does this create business value? –

Copyright 2007 John Wiley & Sons, Inc. IS Security As businesses increasingly rely on the use of IS to support and enable the creation of business value, the need for IS security also grows. IS security (also known as information assurance) protects (1) ______, (2) ______, (3) ______, (4) ______, (5) ______, and (6) ______, from the harmful actions of others. Harmful actions include …?.

The IS Big Picture Creating, supporting and enhancing organizational socio-technical systems Leveraging the informational component of a product, service, business process or business relationship Enable redesign of business processes Business modeling –Data –Processes Process & deliver information to decision- makers UDMIS.info

More of the IS Big Picture Processes, data & technology should be secured against misuse – Individual lives are represented in the information stored and processed by these systems –Increasingly inter-networked world, potential exploits in one individual or organization’s systems can translate into damage for other systems To apply IT, one must understand it –Communications infrastructure and technology standards –Evaluate current and emergent technologies UDMIS.info

Critical Building Blocks Information intensity –The extent to which a product, service, process or relationship is comprised of information Information density –Quality and quantity of information to buyers about products & services of interest to them Understanding Technology –Infrastructure –Standards Essential Business Modeling –Data Modeling –Process Modeling Using Technology to reengineer business processes Support for Decision-Making Security of Systems and Data UDMIS.info

Finally… The rules of business haven’t changed –Profitability –Measures of firm strength –Customer service –Logistics How we implement them has – dramatically –Web-based businesses –Re-engineering based on IT UDMIS.info

Copyright 2007 John Wiley & Sons, Inc. About the Book Spiral model This book use a spiral approach to learning that starts with familiar topics (individual computing) and moves to unfamiliar topics (organizational and inter-organizational use of information systems) Here’s an example Individual (Consumer)    Organization (retailer)    Inter-organizational (retailer’s suppliers or their national, and international business partners) Each level discusses business and technology and the integration of the two concepts to create business value.

Copyright 2007 John Wiley & Sons, Inc. The Spiral Model of this Book