AIS Chapter 1: An Overview

Study Notes

Data: Raw facts and figures without context.
Information: Processed data that is meaningful and useful.
System: An organized assembly of components that work together to collect, process, and present data and information.

Benefits:
- Reduces uncertainty in decision-making.
- Enhances overall decision-making capabilities.
- Aids in strategic planning processes.
Costs:
- Time investment required for gathering and processing.
- Resource allocation for managing data and systems.
Value equation: Benefits minus costs = Value, which can be challenging to quantify.

External Users:
- Include government entities, banks, and shareholders.
- Require mandatory information like annual reports and invoices.
- Focused on minimizing costs and ensuring compliance.
Internal Users:
- Comprise management and employees within the organization.
- Work with discretionary information and evaluate cost-benefit scenarios.

Defined as a system designed to collect, record, store, and process data to produce relevant information.
Handles both financial and non-financial data about resources, events, and agents (REA framework).

Decision Structure:
- Structured Decisions: Clear-cut decisions with predefined processes.
- Semi-structured Decisions: Involves both structured elements and requires judgement.
- Unstructured Decisions: Unique, non-routine decisions requiring innovative thinking.
Decision Scope:
- Operational Control Decisions: Daily operations management.
- Management Control Decisions: Broader management and organizational objectives.
- Strategic Planning Decisions: Long-term planning and direction for the organization.

The objective is delivering value to customers and returning value to shareholders.
Primary Activities: Include inbound logistics, operations, outbound logistics, marketing & sales, and service.
Support Activities: Include firm infrastructure, human resources, technology development, and purchasing.
Synergistic linkages: Information technology enhances interactions across multiple value chains, improving individual company performance.

Investments should be aligned with business type and strategy due to resource constraints while options are broader.
Business Types: Merchandising, manufacturing, and service industries.
Business Strategies: Include product differentiation, low-cost leadership, and specialized services.
Strategic Positions:
- Variety-based: Offering a wide range of products (e.g., Starbucks).
- Needs-based: Meeting specific customer needs (e.g., QU).
- Access-based: Providing access to specific markets or demographics (e.g., CBE Cafeteria).