V-LRN� VIRTUAL LEARNING NETWORK

Block – 4

Unit - 13

Building Information System

Information Systems For Managers

Topics to be covered

13.1 Introduction

13.2 Computer Based IS and its Classification

13.2.1 Office Automation Systems

13.2.2 Communication Systems

13.2.3 Transaction Processing Systems

13.2.4 Enterprise Information Systems

13.2.5 Decision Support Systems

13.2.6 Execution Systems

Topics to be covered (Contd.)

13.2.7 Going Beyond the IS Categories

13.3 Redesigning the Organization with IS

13.4 Business Values of Information Systems

13.5 Outsourcing Information System

13.5.1 Advantages and Disadvantages of

Outsourcing

13.5.2 When to Use Outsourcing?

13.6 Ensuring Quality with Information System

13.7 Summary

Introduction

• An Information system is a set of people, procedures, and resources that collects, transforms and disseminates information in an organization.
• Today’s end users relay on many types of Information Systems (IS). Some are simple manual information systems, where people use tools such as pencils and paper, or machines such as calculators and typewriters. Others are computer-based information systems.

Introduction (Contd.)

• In this unit, we will concentrate on computer-based information systems that use hardware, software, telecommunications and other forms of Information Technology (IT) to transform data resources into a variety of information products.

​

Computer Based IS

And Its Classification

• A computer based information system uses the resources of people (end users and IS specialists), hardware (machines and media), and software (programs and procedures) to perform input, processing, output, storage, and control activities that convert data resources into information.
• A system is a group of interrelated components working together toward a common goal by accepting inputs and producing outputs through an organized transformation process.

Computer Based IS

And Its Classification (Contd.)

• Dynamic system has three basic interacting

components or functions Input / output and

processing. Input involves capturing and

assembling elements that enter the system to

be processed. For example raw materials,

energy, data and human effort must be

secured and organized for processing.

• Processing involves transformation processes that convert input into output. Examples are a manufacturing process or mathematical calculations.

Computer Based IS

And Its Classification (Contd.)

• Output involves transferring elements that have been produced by a transformation process to their ultimate destination. For example, finished products, human services, and management information must be transmitted to their human users.
• The systems concept can be made even more useful by including two additional components feedback and control. A system with feedback and control components is called a cybernetic system that is a self-monitoring & self-regulating system.

​

Computer Based IS

And Its Classification (Contd.)

Computer Based IS

And Its Classification (Contd.)

• Feedback is data about the performance of a system. For example data about sales performance is feedback to a sales manager.
• 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 system’s input and processing components to ensure that it produces proper .

Computer Based IS

And Its Classification (Contd.)

�Office Automation Systems�

• An office automation system (OAS) facilitates everyday information processing tasks in offices and business organizations.
• These systems include a wide range of tools such as spreadsheets, word processors and presentation packages. Although telephones, e-mail, v-mail and fax can be included in this category.
• OAS help people perform personal recordkeeping, writing and calculation chores efficiently.

�Office Automation Systems (Contd.)�

�Communication Systems�

• Electronic communication systems help people work together by exchanging or sharing information in many different forms.
• New communication capabilities have changed the way many businesses operate by making it possible to do many things at a distance that previously required being present in a specific location. Teleconferencing systems make it possible to hold same-time, different-place meetings.

�Communication Systems (Contd.)�

• The use of electronic transmission to permit same-time, different-place meetings is called teleconferencing. We can think of a traditional telephone call as a minimal teleconference but the term is normally applied to other options including audio conferencing, audio graphic conferencing and video conferencing.
• Messaging system make it possible to transmit specific messages to specific individuals or groups of individuals. E-mail, voice mail, and fax to make different-time, different-place communication more effective

�Groupware�

• Groupware helps teams work together by sharing information and by controlling internal workflows. Groupware has attained wide recognition due to the increasing need for groups to work together more effectively at a distance as a result of downsizing and rapid organizational change.Products viewed as groupware are still new enough that their long-term direction is unclear even though the competitive need to work effectively in dispersed teams is greater than ever.

Intranets and Extranets

• Intranets are private communication networks that use the type of interface popularized by the Web but are accessible only by authorized employees, contractors, and customers.
• They are typically used to communicate non sensitive but broadly useful information such as recent corporate news, general product information, employee manuals, corporate policies, telephone directories, details of health insurance, employee benefits and calendars.

Intranets and Extranets (Contd.)

• Extranets are private networks that operate similarly to intranets but are directed at customers rather than at employees.
• Extranets provide information to customer as per his need, such as detailed product descriptions, frequently asked questions about different products, maintenance information, warranties, how to contact customer service and sales offices etc.

Knowledge Management

• Knowledge management systems are communication systems designed to facilitate the sharing of knowledge rather than just information.
• As with groupware, the idea of knowledge management is still emerging and is applied in many different ways in different firms. The computer applications underlying knowledge management systems are often built on technologies such as intranets, electronic mail, groupware, databases and search engines.

Transaction Processing Systems

• A transaction processing system (TPS) collects and stores data about transactions and sometimes controls decisions made as part of a transaction.
• A transaction is a business event that generates or modifies data stores in an information system. TPSs were the first computerized information systems. TPS such as airline reservation systems may automate decision-making functions such as finding the flight that best meets the customer’s needs.

Transaction Processing Systems (Contd.)

• In a manufacturing organization, certain decisions are made by a computer system without any manual intervention. In this type of system, critical information is fed to the system on a real-time basis thereby enabling process control. This kind of systems is referred as process control systems.

​

Batch versus Real Time Processing

• The two types of transaction processing are batch and real time processing. With batch processing information the individual transaction is gathered and stored but isn’t processed immediately.
• When a sufficient number of transactions have accumulated, the transactions are processed to update the database.
• With real time processing each transaction is processed immediately.

Batch versus Real Time Processing (Contd.)

• The person providing the information is typically available to help with error correction and receives confirmation of transaction completion.
• Batch processing was the only feasible form of transaction processing when data were stored only on punched cards or tapes. Real time transaction processing requires immediate access to an online database.

Enterprise Information Systems

• Many firms have tried to take transaction processing to a higher level by creating enterprise information systems that encompass the transaction processing done in the various functional feed store.
• The idea of these efforts is to create unified databases that permit any authorized individual to obtain whatever information would be helpful in making decisions across the organization.
• Enormous effort is required to create Enterprise information systems.

Management and Executive Information Systems

• A management information system (MIS) provides information for an organization’s managers. The idea of MIS predates the computer age. For example, as long ago as the middle 1500s, the Fogger family in Augsburg, Germany, had business interests throughout Europe and even into China and Peru.
• To keep in touch, they set up a worldwide news reporting service through which their agents wrote letters about critical political and economic events in their areas of responsibility.

Management and Executive Information Systems (Contd.)

• An EIS is a highly interactive system that provides managers and executives’ flexible access to information for monitoring, operating results and general business conditions.
• These systems are sometimes called executive support systems (ESS). EIS attempts to take over where the traditional MIS approach falls short. The traditional MIS approach of providing pre specified reports on a scheduled basis is too inflexible for many questions executives really care about.

�Decision Support Systems�

• A decision support system (DSS) is an interactive information system that provides information, models and data manipulation tools to make decisions in semi structured and unstructured situations where no one knows exactly how the decision should be made.
• The traditional DSS approach includes interactive problem solving by direct use of models, and user-controllable methods for displaying and analyzing data and in formulating and evaluating alternative decisions.

OLAP and Data Mining

• The use of online data analysis tools to explore large databases of transaction data is called online analytical processing (OLAP).
• The idea of OLAP grew out of difficulties analyzing the data in databases that were being updated continually by online transaction processing systems.
• When the analytical processes access large slices of the transaction database, they slowed down transaction processing critical to customer relationships.

​

• Data mining is the use of data analysis tools to try to find the patterns in large transaction databases such as the customer receipts generated in a large sample of grocery stores across the United States.

Execution Systems

• The information system categories discussed so far are primarily oriented toward planning and control activities or toward general office and communication activities.
• systems are designed to directly support people doing the value added work that customers care about, such as practicing medicine, designing buildings, or selling investments? Some people call these systems “functional area systems”that support value added work, we will call them execution systems.

Redesigning The Organization� with Information Systems

• A more powerful type of organization change is business re-engineering, in which business processes are analyzed, simplified, and redesigned.
• Re-engineering involves radically rethinking the flow of work; the business procedures used to produce products and services with a mind of radically reduce the costs of business.
• A business process is a set of logically related tasks performed to achieve a defined business outcome.

Redesigning The Organization �with Information Systems(Contd.)

• Some examples of business processes are developing a new product, ordering goods from a supplier, or processing and paying an insurance claim.
• Using information technology, organizations can rethink and streamline their business processes to improve speed, service and quality.

Business Values Of Information�System

Information systems have following business values in an organization by supporting business operations, decision-making, and strategic management.

Outsourcing Information Systems

• The process of turning over an organization’s computer central operations, telecommunications networks, or applications development to external vendors of these services is called outsourcing.
• Outsourcing options have existed since the origin of data processing.
• Activities such as software programming, operation of large computers, time-sharing and purchase of packaged software have to some extent been outsourced since the 1960s.

Outsourcing Information Systems (Contd.)

• Outsourcing vendors are specialists in the information systems services and technologies they provides services in a more economic way.
• Because outsourcing vendors will lose their clients if theor service is unsatisfactory, companies often have more leverage over external vendors than over their own employees that is Service Quality is there.
• An outsourcing contract with a fixed price for a specified level of service reduces uncertainly of costs means it supports predictability.

Advantages & Disadvantages of Outsourcing

• Advantages Business growth can be accommodated without making major changes in the organization’s information systems infrastructure by Flexibility. Some outsourcing agreements, such as running payroll are based on the price per unit of work done (such as the cost to process each cheque) it reflects that Fixed Costs is Variable in nature.
• Scarce and costly talent within an organization can refocus on activities with higher value and payback that is Freeing up Human Resources for other Projects and Financial Capital.

​

​

​

Advantages & Disadvantages of Outsourcing

• Disadvantages Loss of Control- When a firm farms out the responsibility for developing and operating its information systems to another organization, it can lose control over its information systems function. Outsourcing places the vendor in an advantageous position where the client has to accept whatever the vendor does and whatever fees the vendor charges.

Advantages & Disadvantages of Outsourcing

• Vulnerability of Strategic Information- Trade secrets or proprietary information may leak out to competitors because a firm’s information systems are being run or developed by outsiders.
• Dependency- The firm becomes dependent on the viability of the vendor. A vendor with financial problems services may create severe problems for its clients.

When to Use Outsourcing?

• Outsourcing has both benefits and liabilities and is not meant for all organizations or all situations, managers should assess the role of IS in their organization before making an outsourcing decision. There are a number of circumstances under which outsourcing makes a great deal of sense.
• Payroll systems are frequently outsourced to free the information systems staff to concentrate on activities with a higher potential payoff, such as customer service, manufacturing systems.

When to Use Outsourcing? (Contd.)

Ensuring Quality With Information System

• Total quality management (TQM) is a concept that makes quality the responsibility of all people within an organization.
• TQM holds that the achievement of quality control is an end in itself. Everyone is expected to contribute to the overall improvement of quality – the engineer who avoids design errors, the production worker who spots defects, the sales representative who presents the product properly to potential customers, and even the secretary who avoids typing mistakes.

Ensuring Quality With Information System (Contd.)

• TQM encompasses all of the functions within an organization. TQM is based on quality management concepts developed by American quality experts.
• Japanese management adopted the goal of zero defects, focusing on improving their products or services prior to shipment rather than correcting them after they have been delivered. Japanese companies often give the responsibility for quality consistency to the workers who actually make the product.

Ensuring Quality With Information System (Contd.)

• How Information Systems Contribute to Total Quality Management?
• Information systems can fill a special role in corporate quality programs for a number of reasons. First, IS is deeply involved with the daily work of other departments throughout the organizations.
• IS analysis usually have taken a leading role in designing, developing, and supporting such varied departmental systems

Ensuring Quality With Information System (Contd.)

• As corporate payrolls, patent research systems, chemical process control systems, logistics systems, and sales support systems.
• IS professionals also maintain their knowledge of these departments through their participation in departmental information planning.
• In addition, IS personnel are usually key to the sharing of data between departments because they have unique knowledge of the relationships between various departments.

Ensuring Quality With Information System (Contd.)

• Information Systems Contribute to Total Quality Management
• Benchmark - Many companies have been effective in achieving quality by setting strict standards for products, services and other activities, and then measuring performance against those standards or benchmarks.
• IS Contributes to these efforts in many ways- IS staff participates in re-engineering projects and helps to design and build the systems that make the quality processes possible.

Information Systems Contribute to Total Quality Management

• Any study of quality programs shows that information is a top concern to those involved, and IS and is often central to the collection of that information.
• Use Customer Demands as a Guide to Improve Products and Services- Making customer service the number one priority, will improve the quality of the product itself.
• Reduce Cycle Time- Experience indicates that the single best way to address quality problems is to reduce the amount of time from start to its end.

Information Systems Contribute to Total Quality Management

• Quality and precision (accuracy) in design will eliminate many production problems.
• For many products, one key way to achieve quality is to tighten production tolerance.
• Experience has shown that involvement of the people who perform the function is critical to achieving quality in that function like Line Workers involve them in Quality Process.

​

​

Summary

• Organizations in the past few years have shown a tendency to focus on their core

business.

• Functions that are not considered to be part of the core business are outsourced to external suppliers. Organizations face an increased need, flexibility as a consequence of a faster changing competitive environment and rapid developments in information technology.
• Management has been questioning the idea that quality costs more.