Business Information Management MI4007 Lecture Notes PDF

Business Information Management Dr. Michael P. O’Brien Module: MI4007 Week 3 (Lecture 1 of 2) 1 What is a System? 2  What is a System? A set of elements or components that interact to accomplish goals. In general, a system...

Business Information Management Dr. Michael P. O’Brien Module: MI4007 Week 3 (Lecture 1 of 2) 1 What is a System? 2  What is a System? A set of elements or components that interact to accomplish goals. In general, a system has the following characteristics: A system takes inputs, transforms those inputs and produces outputs. A system exists in but is separate from an environment. A system has sub-systems. A system uses feedback from its environment for control. 3 What is a System? Environment Temperature Reading Increase in heat (Input) (Output) System Boundary System 4  What is a System? Environment Ambient Temperature Increase in heat (Output) Thermometer Control Unit System Boundary Boiler System Temperature Start Boiler Reading (Y/N) 5 Information Systems Definition: A set of interrelated elements or components that collect (input), manipulate (process), and disseminate (output) data and information and provide a feedback mechanism to meet an objective. (IS) Pronounced as separate letters, and short for Information Systems or Information Services. For many companies, IS is the name of the department responsible for computers, networking and data management. Other companies refer to the department as IT (Information Technology) and MIS (Management Information Services). 6  What is an Information System? Schematic model of an Information System Feedback Input Processing Output Input: The activity of gathering and capturing data Processing: Converting or transforming data into useful outputs Output: Useful information, usually in the form of documents and/or reports. 7 Information Systems Information Systems consist of six equally important components: Telecommunications/ Hardware Software Data Networks People Procedures 8  Components of Information Systems Hardware These are devices such as monitors, processors, printers, keyboards – all of which work together to accept, process, show data and information. Software The term software refers to computer programs and the manuals (if any) that support them. Computer programs are machine-readable instructions that direct the circuitry within the hardware parts of the system to function in ways that produce useful information from data. Data Data are facts that are used by programs to produce useful information. Like programs, data are generally stored in machine- readable form on disk until the computer needs them. 9 Components of Information Systems Telecommunications/Networks The electronic transmission of signals for communication; enables organisations to link computer systems into effective networks (used to connect computers and computer equipment in a building, around the country, across the world, to enable electronic communication). People The most important element in most computer-based information systems. Includes people who manage, run, program, and maintain the system e.g. IT professionals. Procedures Procedures include the strategies, policies, methods, and rules for using the Information System. “Procedures are to people what software is to hardware”. 10  Types of Information Systems There are four main types of information system 11 Transaction Processing Systems A Transaction Processing System (TPS) is a type of information system that collects, stores, modifies and retrieves the data transactions of an enterprise. E.g. sales order entry, payroll, shipping. Ideal for routine, repetitive tasks. Requires six steps to process a transaction – data entry, validation, data processing, storage, output generation, and query support. TPS are the data lifeline of the company – If a company fails to capture a transaction it may lead not only to customer dissatisfaction and lost profit but also to serious penalties and lawsuits. – TPS become the source of data for other systems in the organisation. If analysed and integrated, they will give the business key information about new company plans. A better plan of how to meet customer needs and preferences. – TPS are a link between the organisation and external entities, such as suppliers, customers & distributors. 12  TPS Payroll Example 13 Management Information Systems A Management Information System (MIS) is: – an information system that uses the data collected by the transaction processing system and uses this data to create reports in a way that managers can use it to make routine business decisions in response to problems. Serve middle management. Some of the reports that this information system creates are summary, exception and ad-hoc reports e.g. annual budgeting. All this is done to increase the efficiency of managerial activity. Typically have little analytical capability. 14  Decision Support Systems A Decision Support System (DSS) is an interactive computer-based system or subsystem intended to help decision makers use communications technologies, data, documents, knowledge and/or models to identify and solve problems, complete decision process tasks, and make decisions. Decision Support System is a general term for any computer application that enhances a person or group’s ability to make decisions; can be as simple as an excel spread sheet to a complicated system involving large databases, statistical modelling techniques and applying A.I. to derive information. 15 Executive Support Systems Used by senior management to help them make decisions, Executive Support Systems (ESS) serve the strategic level of the organisation. Address nonroutine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution. Typically designed to incorporate data about external events, such as new tax laws or competitors, but they also draw summarized information from internal MIS and DSS. ESS employ the most advanced graphics software and can present graphs and data from many sources. Often the information is delivered to senior executives through a portal, which uses a Web interface to present integrated personalised business content from a variety of sources. 16  Relationship of Systems to One Another The various types of systems in the organization have interdependencies TPS are major producers of information that is required by the other systems, which, in turn, produce information for other systems. These different types of systems have been loosely coupled in most organizations It is definitely advantageous to integrate these systems so that information can flow easily between different parts of the organization and provide management with an enterprise-wide view of how the organization is performing as a whole. 17 Other Classifications of Information Systems Expert systems: Knowledge-based systems that provide expert advice and act as expert consultants to users. ESs attempt to duplicate the work of human experts by applying reasoning capabilities, knowledge, and expertise within a specific domain. Examples: credit application advisor, diagnostic maintenance systems. Knowledge management systems: Knowledge-based systems that support the creation, organization, and dissemination of business knowledge within the enterprise. Examples: intranet access to best business practices, sales proposal strategies, and customer problem resolution systems. Strategic information systems: Support operations or management processes that provide a firm with strategic products, services, and capabilities for competitive advantage. Examples: online stock trading, shipment tracking, and e-commerce Web systems (Electronic Commerce Systems). Functional business systems: Support a variety of operational and managerial applications of the basic business functions of a company. Examples: information systems that support applications in accounting, finance, marketing, operations management, and human resource management. 18  Benefits of Information Systems In conclusion, Information Systems allow businesses to gather large amounts of data quickly, easily and reliably to store and organise large amounts of data manipulate data quickly, accurately and consistently. retrieve and communicate information in a variety of forms, depending on what is useful to the user. enforce business rules 19 So… What is Information Management? Information Management (IM) is the collection and management of information from one or more sources and the distribution of that information to one or more audiences. The purpose of Information Management within organisations is to capture, store and deliver the right information to the right people at the right time. The objective of IM is to help organisations as well as individuals to get access to the information they need so that they can use it efficiently and effectively in order to add value to the organisation. Involves people, policies/processes, technology and data/information. 20  Information Management Strategy An Information Management Strategy helps: businesses to operate in a more competitive and strategic manner people become better informed so that they can better accomplish their tasks sense what is happening in the external environment and respond accordingly research demand for new products/services exchange information with partners such as suppliers communicate messages about brands and products internally and externally add value by improving the customer experience reduce costs through more efficient business processes e.g. automation create novelty – new ways in which products can be developed or introduced 21 22