Chapter 1 foundations of information systems in business (1)

Management
Information Systems
MBA- 1st Trimester

Foundation Concepts
Information Systems in Business

Information System
• BBSM Point of Sales system
• IMS Himalayan Sangrila
•
• online and onsite Movie Ticket booking systems
• online hotel booking
• FACT accounting solution
• Tally accounting solution
• PUMORI core banking system software
• FINACLE core banking system software
• FLEX CUBE core banking system software

Information System
Top 5 Core Banking Software (CBS) in Nepal - Published on May 30, 2016
• Pumori IV
NMB BANK, SUNRISE BANK, DCBL BANK, COMMERCZ AND TRUST BANK
• Pumori III
NIC ASIA BANK, NCC BANK, NEPAL BANK, RB BANK, KIST BANK, PRIME BANK,
CITIZEN BANK
• FINACLE
BOK BANK, GLOBAL IME BANK, EVEREST BANK, NIBL BANK, NABIL BANK
• FLEX CUBE
SIDDHARTHA BANK, LAXMI BANK, MEGA BANK, JANTA BANK
• GLOBUS/TEMENOS T24
HIMALAYAN BANK, KUMARI BANK, CIVIL BANK, SUNRISE BANK, MACHHAPUCHHRE
BANK, ADBL

• What is IS? Simply, Information System is an organized
system for collection, organization, storage and
communication of information.
• Specifically, IS is concerned with the study of
complementary networks that people and organization
use to collect, filter, process, create and distribute data
• ‘Why we need IS?’ This question has evolved into a
moot issue. As marketing, accounting, finance, human
resource management, operation management,
information system has become an integral part of
many business organizations.
• In today’s world of technology, many call it business
imperative.
Information System

• Since, you probably intend to become entrepreneurs,
managers, investors, business professionals; it is just as
important to have a basic knowledge of information
system as it is to understand any other functional areas
in business.
• Thus, it is essential to study information system in
business administration and management programs
• Information systems help many businesses improve
the efficiency and effectiveness of their business
process, managerial decision making and workgroup
collaboration to strengthen the competitive position
in rapidly changing marketplace.
Information System

• Improvised definition of IS: An organized system
of complementary networks of hardware and
software that people and organization use to
collect, filter, process, store, transform and
disseminate data and information to support
decision making, coordination and control,
analysis and visualization in an organization.
• eCourier – Booking and Tracking automation
Information System

Information Systems
Any organized
combination of people,
hardware, software,
communication
networks, data
resources, and policies
and procedures that
stores, retrieves,
transforms and
disseminates
information in an
organization

Fundamental Role of IS in Business
• Support business processes and operations
– Computer based IS help employees to record customer
purchases, track inventory & warehouse, pay employees,
evaluate sales trend and buy new merchandize.
– Store would come to a halt without such IS
• Support decision making by employees and managers
– Decision about what merchandize to be added or discontinued,
what kind of investments they require are typically made after
analysis provided by computer based IS
• Support strategies for competitive advantage
– Installing Self-check out kiosks
– Gaining strategic advantage over competitors requires
innovative application of information technologies.

“Big Five” IT trends
Cloud
Big
Data
Mobile
Social

The role of e-Business in Business
• Internet, related technologies and business applications
have changed the way businesses operate, people work
and how IS support business processes, decision making
and competitive advantage
• Businesses create eBusiness applications
– Using Internet to Web-enable business processes
– Depending on Intranet, Extranet to implement and
manage innovative eBusiness applications
• eBusiness uses Internet technologies to empower
business processes, eCommerce, and enterprise
collaboration within a company and beyond the
company - with its customers, suppliers, stakeholders

• eBusiness is online exchange of value
• Any online exchange of information, money,
resources, services or any combination thereof falls
under the eBusiness umbrella
• eBusiness application are used by companies to
– Reengineer internal business processes
– Implement eCommerce system with customers and
suppliers
– Promote enterprise collaboration among business
teams and workgroups

• Enterprise Collaboration uses software tools,
Enterprise Collaboration System, to support
communication, coordination and collaboration
among the members of networked teams and
workgroups
– Virtual team of employees and consultants uses
intranet, extranet and internet for e-mail,
videoconferencing, creating e-discussion groups
(blogs), communicating Work-in-Progress in Web
pages and for sharing documents to collaborate on
different projects.

• eCommerce is buying, selling, marketing and servicing of
products, services and information over a variety of
computer networks.
• eCommerce supports every step of commercial process
– Advertising, sales and customer support on the web
– Internet Security for safe transaction & payment
– Assurance of delivery completion from dispatcher/delivery
company
• eCommerce systems include
– Online sales through internet website
– Extranet access to customer’s inventory database
– Intranet for sales repsto accesscustomer records for CRM

Typical eBusiness Architecture
Supply Chain Management:
Procurement, Distribution & Logistics
Engineering
& Research
Company
Boundary
Consumers & Business Customers
Extranet
Extranet
Accounting
& Finance
Manufacturing
& Production
Suppliers & Other
Business Partners
Customer Relationship Management:
Marketing, Sales, Customer Service
Intranet
Intranet
Internet

Operation Support System Management Support System
Transaction Processing System
Process Control System
Enterprise Collaboration System
Specialized Processing System
Management Information System
Decision Support System
Executive Information System
Specialized Processing System
Expert
System
Knowledge
Management
System
Strategic
Information
System
Functional
Business
System
Information System
Support Business Operations Support Management Decision Making
Types of Information Systems

Foundation Concepts
The components of Information Systems

System
• A set of interrelated components, with a clearly defined
boundary, working together to achieve a common set of
objectives by accepting inputs and producing outputs through
a transformation process in an organized manner
• 3 basic functions of a system
– Input involves capturing and assembling elements that enter
the system (to be processed).
– Processing involves transformation method (that convert input
elements to output).
– Output involves transferring elements that have been produced
by transformation process to ultimate destination.
• Feedback is data about the performance of a system.
• Control involves monitoring and evaluating feedback, and
making necessary adjustment to inputs & process

Components of Information System
• Information Systems use people, hardware, software, data and network
resources to perform input, processing, output, storage and control
activities that transform data into information products.

Information System Resources
1. People are the essential ingredient for the successful
operation of all information system. It includes end
users and IS specialist.
 END USERS are people who use an information system or
the information it produces. They can be customers , sales
person, clerks, engineers, accountants, managers who are
found at all levels.
 Knowledge workers who collaborate & communicate
 IS SPECIALIST are people who develop and operate
information system. It includes system analysts, software
developers, system operators, technical & clerical IS persons

2. Hardware Resources includes all physical devices and
material used in information processing. It includes not
only machines, such as computers but also all data
media, i.e. tangible objects on which data is recorded.
 COMPUTER SYSTEM : consist of central processing units
containing micro processors and a variety of
interconnected devices such as printers , scanners etc.
 COMPUTER PERIPHERALS: are devices such as keyboard,
electronic mouse for the input of data and commands , a
video screen or printers for the output of the
information, magnetic or optical drives for storage of
data resources

3. Software resources includes all sets of information
processing instructions.
It includes the sets of operating instructions called programs
which direct and control computer hardware and the set of
information processing instruction called procedure that
people need.
 Example:
• System software: OS which control and supports the
operation of computer system
• Application software: sales analysis, payroll, word processing
programs
• Procedures: Operating instructions for the people who use IS

4. Data resources are the input elements that are stored in
databases. This concept has been broadened by managers
and information system professionals. They realize the data
constitute valuable organizational resources.
 Data can take many forms: alphanumeric, text, images,
video, audio
 Data can take many forms including traditional numeric data
composed of numbers etc. The data resources of information
system are typically organized, stored, accessed by a variety
of data resource management technologies into:
 Data base that hold processed and organize data.
 Knowledge bases that hold knowledge in a variety of forms
such as facts, rules and cases of best business practices

5. Network resources includes communications technologies
and networks that are fundamental to all information
system. It includes:
 Communication Media- includes twisted pair wire,
microwave, cellular wireless technologies.
 Network Infrastructure- emphasizes that many hardware,
software and data technologies are needed to support the
operations and use of communication network.
– Communication processors such as modems,
communication control software, network OS, internet
browser packages.

Information System Activities
• Input of Data Resources
• Processing of Data into Information
• Output of Information Products
• Storage of Data Resources
• Control of System Performance

Input of Data Resources
• Data entry
• Editing
• Formal record of a transaction
• optical scanning of bar coded tags on
merchandise
• Machine readable
• Source documents

Processing of Data into Information
• Calculate
• Compare
• Sort
• Classify
• Summarize
– calculating employee pay, taxes, and
other payroll deductions
• The quality of the data must be maintained by a
continual process of correcting and updating activities

Output of Information Products
• Transmit information to users
• Producing reports and displays about sales
performance
• Display; paper; audio, reports, forms

Storage of data
• Maintaining records on customers,
employees, products, sales
• Data are retained in an organized manner
• Fields; records; files; data bases, knowledge bases

Control of system performance
• Generating audible signals to indicate proper
entry of data
• Feedback must be monitored and evaluated
to determine if the information system is
meeting established performance standards.
• Control system checks the feedback and
makes necessary changes

INFORMATION SYSTEM ACTIVITIES
 Input. (optical scanning of bar coded tags on
merchandise)
 Processing. (calculating employee pay, taxes, and
other payroll deductions)
 Output. (producing reports and displays about sales
performance)
 Storage. (maintaining records on customers,
employees, and products)
 Control. (generating audible signals to indicate proper entry
of sales data.)

MANAGERIAL CHALLENGES
• IS and technologies must be managed to support business
strategies, business processes and organizational structures
and culture of a business enterprise
• Success and failure of IT should not be measured only by
efficiency in terms of minimizing cost, time and the use of
information resources.
• It should also be measured by effectiveness in supporting
business strategy, enabling business processes, enhancing
organizational structure and culture and increasing the
business and customer values
• However, IS & technology could be mismanaged and
misapplied resulting into not only technical problem but
also a business failure.
• Ex. Dell - Corporate Support call center
Shop Direct

• Developing IS Solutions
– Agile : system is defined at high level and then developed
in short iterations
– Usable software after each iteration
• Challenges and Ethics of IT
– What might be considered improper, irresponsible and
harmful to other people or society
– Proper business use of IT, internet and organization’s IT
resources
– How to protect yourself from computer crime and other IT
risks
– Ex. CRM and HRM cases
– Ex. Hannaford Bros – Importance of securing cust. Data

• Challenges of IT career
– Expensive pay to IT specialist
– Raising labor costs
– Off-shore outsourcing to India, Asia Pacific,
Middle-East.
– Decrease in the cost of IT and software resulting in
more use of them by companies
– To stay competitive and efficient, business must
use it
– More new and complex IS are being implemented
and used

Chapter 1 foundations of information systems in business (1)

Chapter 1 foundations of information systems in business (1)

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Chapter 1 foundations of information systems in business (1)

Similar to Chapter 1 foundations of information systems in business (1) (20)

More from Advance Saraswati Prakashan Pvt Ltd

More from Advance Saraswati Prakashan Pvt Ltd (20)

Recently uploaded

Recently uploaded (20)

Chapter 1 foundations of information systems in business (1)