Business Information Systems Overview

Business Information Systems

• Business is a formal organization that produces products or services to make a profit.
• A business is organized with four basic functions: manufacturing/production, sales/marketing, finance/accounting, and human resources.
• Every business, regardless of size, must perform these functions to succeed. They must produce a product or service, market and sell it, track accounting and financial transactions, and perform human resource tasks.
• Five basic business entities include suppliers, customers, employees, invoices/payments, and products/services.

Business Processes

• Logically related sets of tasks define how businesses perform specific tasks.
• Tasks include employee duties, order, and scheduling.
• Some processes are tied to functional areas (e.g., sales and marketing, identify customers).
• Some processes are cross-functional (e.g., fulfilling customer orders).

Business Hierarchies

• Businesses have a hierarchy to organize work in which authority is concentrated at the top.
• Levels include: senior management, middle management, operational management, knowledge workers, data workers, and production/service workers.
• Each group requires different information.

Levels in a Firm

• Businesses are structured in three principal levels: senior management, middle management, and operational management.
• Information systems serve each level.
• Scientists and knowledge workers frequently work closely with middle management.

Business Environment

• Global environment factors: Technology, science, economy, politics, and international change.
• Immediate environment factors: Customers, suppliers, competitors, regulations, and stockholders.
• Organizations must constantly monitor and respond to, or anticipate, developments in their environment to be successful. This includes the elements of the immediate and global environments.

Role of Information Systems in a Business

• Firms invest in information systems to achieve operational excellence, develop new products/services, attain customer intimacy/service, improve decision-making, promote competitive advantage, and ensure survival.

Information Systems Definition

• An information system is a conceptual system that helps managers control and monitor a firm's physical systems. It transforms input resources into output resources.

Managers as Information System Users

• Managers operate at various levels and within different business areas.
• The development level of an information system influences how it operates.
• The 3 primary management levels are strategic planning, management control, and operational control.

Influence on Information Source and Form

• The management level influences the source and form of information.
• Strategic planning level - summary, broad view of information
• Management control level - summary level information
• Operational control level - detailed information

Systems for Different Management Levels

• Transaction processing systems: Track basic business activities and transactions (e.g., sales, receipts, payroll, factory flow).
• Management information systems (MIS) and decision support systems (DSS): Aid in monitoring, controlling, decision-making, and administrative functions.
• Executive support systems (ESS): Focused on addressing strategic issues and long-term trends for senior managers.

Types of Business Information Systems

• Transaction processing systems (TPS): Serve operational managers, track transactions, and monitor internal operations. They are crucial to basic business functions.
• Management Information Systems (MIS): Provide reports and summaries on firm performance for middle managers.
• Executive Support Systems (ESS): Support senior managers with strategic decision-making regarding long-term trends and issues. They provide a broad, summarized view of data.

Systems That Span the Enterprise

• Enterprise applications: Span functional areas, focus on executing business processes across the firm, and incorporate all management levels.
• These include enterprise systems, supply-chain management systems, customer relationship management systems, and knowledge management systems.
• Enterprise systems: Integrate key business process data into a single system to speed communication and enable quicker responses to customer requests. They improve order fulfillment and allow overall operational visibility, which is important for business efficiency.

Internet, Intranets, and Extranets

• Technology platforms increase integration and expedite information flow.
• Intranets: Internal networks based on Internet standards (often with a portal to access information).
• Extranets: Intranets extended for authorized use outside the company (e.g., partners, customers). A helpful tool for collaboration.

E-Business, E-Commerce, and E-Government

• E-business: Use of digital technology and the Internet to drive major business processes. It's a broader term than e-commerce.
• E-commerce: Subset of e-business, focuses on buying and selling through the internet.
• E-government: Utilizes the Internet to deliver information and services to citizens, employees, and businesses.

This quiz explores the fundamental components of business information systems, including key functions, processes, and hierarchies involved in organizations. Understand how these elements work together to drive a business's success and maintain operational efficiency.