Ch. 04 Information Systems (IS) Rev. 4: Mar., 2015 Prof. Euiho Suh POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: Dept. of Industrial & Management Engineering POSTECH

Contents 1Information System 2Components of Information System 3Technical & Behavioral Approaches to MIS 4Role of IS 5Types of Information Systems 6DQ & ECQ

3 Information System (1/3) ■Definition of System –A set of interrelated components, with a clearly defined boundary, working together to achieve a common set of objectives by accepting inputs and producing outputs in an organized transformation process Input Capturing and assembling elements that enter the system to be processed Processing Transformation process converts input into output Output Transferring transformed elements to their ultimate destination

4 Information System (2/3) ■Definition of Information System –A set of interrelated components which are to collect, process, store, and distribute information to support decision making and control in an organization Information System Information System

5 Information System (3/3) ■An information system performs three general activities –It accepts data from sources as input –It acts on data to process(produce) information : information generating system –The system outputs the information for the user, manager or staff member ■Information System Process Input of data Information generating Output Third StepFirst StepSecond Step

6 Components of Information System (1/2) A set of people, data, procedure to provide useful information Information System Data Procedure Network Communication of information Management of activities Decision making People Hardware Software

7 Components of Information System (2/2) Computer based loan information systems Banking database Economic database Fund on deposit Loan balance Balance financial plan Loan portfolio Employment data Economic data Processor Information supplied by applicant for loan Financial status Loan details Employment status ■E.g. Components of a Loan Information System

8 Technical & Behavioral Approaches to MIS Computer Science Operations Research Sociology Political Science Psychology Management Science MIS Behavioral Approaches Technical Approaches

9 Role of IS (1/2) View Point 1 DataInformationDecision AidsKnowledge Statistical Analysis Math Analysis Reasoning View Point 2 Extreme top Top Middle low Extreme low EIS/ESS DSS IPS TPS OAS ERPERP View Point 3 Strategic Value IS Expansion H L L H ? ?

10 Role of IS (2/2) View Point 4 HelperA Function Management Marketing Financing Accounting IS Management IS MarketingAccounting Financing Controller IS Marketing Accounting Financing Melting Pot IS Marketing Accounting Financing All Functions are melted

11 Types of Information Systems (1/12) IS Recognition about Information MotivationPurpose TPS (Transaction Processing System) EfficiencyComputerTo process data about transactions MIS/IPS (Management Information System/ Information Processing System) ControlDatabaseTo process information (cooked data) DSS (Decision Support System) Decision PC and Model based To assist managers with optimal decisions for semi-structured problems ESS (Executive Support System) Strategic Resource Executive Support To assist top-level executives Upper-level DSS ES (Expert System)KnowledgeAI To mimic the decision process of a human expert ERP (Enterprise Resources Planning) ManagementBPR To integrate management information across entire organization, Vertical and horizontal integration of IS’s Work Group Support System Communication To support group infor./decision collectively

12 Types of Information Systems (2/12) ■3-Axis MSS Model Model Data Intelligence IS Type = f(m, d, i) a? c? b? Ex) TPS = f(0.1, 0.9, 0) DSS = f(0.5, 0.3, 0.2) Ex) TPS = f(0.1, 0.9, 0) DSS = f(0.5, 0.3, 0.2)

13 Types of Information Systems (3/12) ■Transaction Processing Systems (TPS) –IS to process transactions handling mostly data with arithmetic operations such as plus, minus, multiplication, and division –Examples) ATM, KTX Ticketing, Self Check-in Kiosk

14 Types of Information Systems (4/12) ■Management Information System (MIS)/Information Processing System (IPS) –IS to process information (cooked data, statistically analyzed data) –Statistical analysis –Examples) POS (Point-of-sale) –What kinds of analysis are included in POS?

15 Types of Information Systems (5/12) ■Decision Support System (DSS) –IS to support manager’s decision makings for semi-structured problems –Three components: DB/DBMS, MB/MBMS, Dialogue (DgB/DgMS) Eui-ho Suh and H. Hinomoto, "Use of A Dialogbase for Integrated Relational Decision Support System", Decision Support Systems, 5(3), pp , 1989Eui-ho Suh and H. Hinomoto, "Use of A Dialogbase for Integrated Relational Decision Support System", Decision Support Systems, 5(3), pp , 1989 –Examples) Investment Planning Eui-ho Suh, Chang-kyo Suh and Nam-chul Do, "A Decision Support System for Investment Planning on a Microcomputer", Journal of Microcomputer Application, 15(4), pp , 1992Eui-ho Suh, Chang-kyo Suh and Nam-chul Do, "A Decision Support System for Investment Planning on a Microcomputer", Journal of Microcomputer Application, 15(4), pp , 1992 –Examples) Make or BuyMake or Buy

16 Types of Information Systems - Taxonomy for DSS by Daniel Power (6/12) ■Communication-driven DSS –To support more than one person working on a shared task –Examples) Integrated tools like Google Docs or Groove ■Data-driven DSS or data-oriented DSS –To emphasize access to and manipulation of a time series of internal company data and, sometimes, external data ■Document-driven DSS –To manage, retrieve, and manipulate unstructured information in a variety of electronic formats ■Knowledge-driven DSS –To provide specialized problem-solving expertise stored as facts, rules, procedures, or in similar structures ■Model-driven DSS –To emphasize access to and manipulation of a statistical, financial, optimization, or simulation model –To use data and parameters provided by users to assist decision makers in analyzing a situation –Not to be necessarily data-intensive –Examples) Dicodess, an open source model-driven DSS generator.

17 Types of Information Systems (7/12) ■Executive Information System (EIS) –To present information for top management To support problem/opportunity discovery and assessment To be used for control and strategic planning –To be multimedia systems –To provide summary and detailed information, with the ability to “drill down” into the data –To provide internal and external information –To provide different time and space information

18 Types of Information Systems (8/12) ■Executive Information System (EIS)/Executive Support System (ESS) –A type of DSS for executives –EIS is interchangeably used with ESS, but, sometimes it is only an executive version of IPS while ESS is an executive version of DSS Eui-ho Suh and Dae-ho Byun, "A Builder's Introduction to Executive Information Systems", International Journal of Information Management, 14, pp , 1994Eui-ho Suh and Dae-ho Byun, "A Builder's Introduction to Executive Information Systems", International Journal of Information Management, 14, pp , 1994 –Examples) Conoco’s EIS Executive Dashboard: UA

19 Types of Information Systems - Expert System (ES) (9/12) ■Definition –Computer-based information systems that use expert knowledge to attain high-level decision performance in a narrowly defined problem domain –Example) MYCIN ■Features of ES Expertise  Containing expertise that enables ES to make expert- level decisions Symbolic reasoning  Containing symbolically represented knowledge and symbolic primary reasoning mechanism Deep knowledge  Containing complex knowledge not easily found among nonexperts Self-knowledge  Learning from its successes and failures as well as other knowledge sources and examining its own reasoning and providing proper explanations

20 Types of Information Systems - Important Concepts in ES (10/12) ■Experts –Degrees or levels of expertise –Nonexperts outnumber experts often by 100 to 1 ■Transferring Expertise –From expert to computer to nonexperts via acquisition, representation, inferencing, transfer ■Inferencing –Knowledge = Facts + Procedures (Rules) –Reasoning/thinking performed by a computer ■Rules (IF… THEN…) ■Explanation Capability (Why? How?) –Chang-kyo Suh, Eui-ho Suh, "Using Human Factor Guideline for Developing Expert System", Expert Systems, 10(3), pp , Aug. 1993Chang-kyo Suh, Eui-ho Suh, "Using Human Factor Guideline for Developing Expert System", Expert Systems, 10(3), pp , Aug. 1993

21 Types of Information Systems - Architecture of an ES (11/12)

22 Types of Information Systems - ERP (12/12) ■Enterprise Resource Planning EIS/ESS DSS IPS TPS OAS FISAISMkISPIS Vertical integrated, horizontal integrated information system ERP Layer Function

23 DQ & ECQ ■1 Six components of IS ■2. Least or most important component. Why ? ■3. If one more added, what would it be ? ■4. Explain each viewpoint ■5. For each case, classify it in terms of four different viewpoints. ■6. For each IS, classify it in terms of 3-axis MSS model ■7. For each IS, name the type of IS ■8. For each type of IS, provide your own example