1. Information Systems in Organizations
EAK 362/2 MIS Lecture 3
Information Systems in Organizations

2. Defining some terms
An information system collects, maintains, and provides information to people.
An organization is a group of people working together to accomplish a goal.
Many organizations use computers to operate more effectively, gather information, and accomplish tasks.
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3. ORGANIZATIONS
PEOPLE: Managers, knowledge workers, data workers, production or service workers
STRUCTURE: Organization chart, groups of specialists, products, geography
OPERATING PROCEDURES: Standard Operating Procedures (SOP), rules for action
POLITICS: Power to persuade, get things done
CULTURE: Customs of behavior
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4. Is an organization the same as a business?
An organization is a group of people working together toward a goal.
A business is an organization that seeks profit by providing goods and services.
The written expression of an organization’s mission is called a mission statement.
describes goals
way goals will be accomplished
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5. Most organizational activities can be classified into four functional groups as shown below.
Operations
Sales and Marketing
Financial Management
Human Resources Management
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6. Organizational functions defined
The primary activities of an organization are called production or operations.
Tracking the flow of money through an organization is referred to as accounting or financial management.
Advertising and promoting an organization are the jobs of sales and marketing or public relations.
Keeping track of employees is referred to human resources management.
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7. How necessary are computers?
Computers are an important aspect of organizational activities.
Organizations exist in a competitive environment where opportunities and threats abound.
In response to threats, an organization can:
become better at what it does
change the structure of an industry
create a new product or service
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8. Organizational Structures
Every organization requires people.
Workers are the people who carry out the organization’s mission.
Managers determine organizational goals and plan what steps to take to achieve those goals.
both need to make decisions
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9. Types of workers
A high percentage of workers use information systems and other computer or communications technologies.
Information workers - produce and manipulate information
Service workers - deliver services to customers
Goods workers - create and manipulate physical objects
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10. Organizational Pyramid
Worker classification
in the organizational
pyramid
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11. Managerial Levels
Executive managers - set long range goals for organization called strategic planning
Middle managers - design ways to achieve plans laid out by executive managers, known as tactical planning
Supervisors - deal primarily with day-to-day operations, known as operational planning
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12. Problem Solving To solve a problem, a worker must: Problems
recognize the problem
devise possible solutions
select an action or solution
Problems
structured (every day, routine)
semi-structured (less routine, uncertain)
unstructured (require human intuition)
Computer information systems help people solve structured, semi-structured, and unstructured problems.
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13. Information sources Organizations generate internal information :
inventory
cash flow
personnel
stored in an information system
External information is collected from outside sources.
not permanently stored in information system
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14. Information System Outputs
Most information systems produce a fixed set of reports (daily cash receipts).
Information analysis tools help people model problems then find a solution or decision.
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15. Decision Tool Example
Criterium
DecisionPlus
software
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16. Criterium
DecisionPlus
software
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17. Information System Components
An information system must have one or more of the following components:
office automation system
transaction processing system
management information system
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18. Office Automation
An office automation system “automates” or computerizes, routine office tasks.
word processing software
spreadsheet software
scheduling software
software
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19. Transaction Processing
In an information system context, a transaction is an event that requires a manual or computer-based activity.
A transaction processing system (TPS) keeps track of the transactions for an organization by providing a way to collect, store, display, modify, or cancel transactions.
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20. Examples of TPS Examples of transaction processing systems:
point of sale system records items purchased at each cash register
order-entry/invoice system provides a way to input, view, modify, and delete orders
general accounting system records financial status of business
e-commerce system - collects online orders and processes credit card payments
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21. How TPS data is captured
Transaction
processing
system
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22. What happens to TPS data?
Managers need sophisticated reports to help them understand and analyze data.
created by a management information system
Management information system can be a synonym for the term “information system” or refer to a type of information system.
characterized by production of routine reports that managers use for structured and routine tasks
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23. Types of MIS System outputs
One of the major goals of an MIS is to increase the efficiency of managerial activity.
A managerial information system produces several types of reports.
Detail report - organized list
Summary report - combines or groups data
Exception report - show information outside normal or acceptable ranges
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24. What is Decision Support ?
A decision report system (DSS) allows users to:
manipulate data directly
incorporate data from external sources
create data models and “what if” scenarios
designed to make non-routine decisions
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25. How does Decision Support occur?
A decision model is a numerical representation of a realistic situation.
A decision query is a question or set of instructions describing the data that needs to be gathered to make a decision.
A decision support system “supports” the decision maker but does not make the decision.
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26. Idealized Characteristics and Capabilities of a DSS
Decision maker has complete control over all steps of the process. It supports, not replaces the decision maker.
DSS leads to learning, which leads to new demands, and the refinement of the system.
DSS should be easy to construct.
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27. Can decisions be automated?
Information systems do not make decisions. The manager analyzes the data and reaches a decision.
An expert system, sometimes referred to as a “knowledge-based system”, is a computer system designed to analyze data and produce a recommendation or decision.
uses a set of facts or rules
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28. How do expert systems function?
Knowledge base - set of facts and rules, stored in a computer file
manipulated by inference engine software
An expert system is not a general-purpose problem solver or decision maker.
An expert system shell is a software tool that helps in developing expert system applications.
contains an inference engine
expert system without rules
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29. Types of expert system problem domains
Expert systems are designed to deal with imprecise data or problems that have more than one solution.
Using a technique called fuzzy logic, an expert system can deal with imprecise data by asking for a level of confidence.
A neural network uses computer circuitry to simulate the way in which a brain might process information.
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30. Sensitivity Analysis
SensitivityAnalysis - study of the impact that changes in one (or more) parts of a model have on other parts. Generally looks at what impacts changes in input variables have on output variables.
Enables flexibility and adaptation to changing conditions.
Applicability to different situations
better understanding of the model and the problem it supports.
“What-If” Analysis and Goal Seeking
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31. What-If Analysis
Model maker makes predictions and assumptions regarding the input data.
When a model is solved, the future depends on this data.
What If the cost of carrying inventory increases 15%?
What will be the market share if advertising budget increases by 5%?
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32. Goal Seeking
Attempts to find the value of inputs necessary to achieve a desired output level.
Represents a “backwards” solution
If an initial analysis yields profits of $2 million, what sales volume is necessary for a profit of $2.2 million?
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33. THE DIGITAL FIRM ELECTRONIC COMMERCE ELECTRONIC BUSINESS
ELECTRONIC MARKET: Information system links buyers & sellers to exchange information, products, services, payments
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34. ELECTRONIC COMMERCE INTERNET LINKS BUYERS, SELLERS
LOWERS TRANSACTION COSTS
GOODS & SERVICES ADVERTISED, BOUGHT, EXCHANGED WORLDWIDE
BUSINESS-TO-BUSINESS TRANSACTIONS INCREASING
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35. ELECTRONIC BUSINESS INTRANET: Business builds private, secure network
, WEB DOCUMENTS, GROUP SOFTWARE: Extends effective communication & control
EXTRANET: Extension of Intranet to authorized external users
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36. WHAT YOU CAN DO ON THE INTERNET?
COMMUNICATE & COLLABORATE
ACCESS INFORMATION
DISCUSS
OBTAIN INFORMATION
ENTERTAIN
TRANSACT BUSINESS
brainstorm
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37. END OF LECTURE 2
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