MIS Fiches

7/30/2019 MIS Fiches

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Business Information Systems

Why Do People Need Information?

Individuals: Entertainment and enlightenment

Businesses: Decision making and problem solving

Data vs. Information

DataA given or fact: a number, a statement, or a picture

The raw materials in the production of information

Information

Data that have meaning within a context

Raw data are processed in an IS to create final useful information

Process: Manipulation of data

Computer-based ISs: process data to produce information

Information must be usefulRelevant

Complete

Accurate

Current

Cost effective in business

Information have to be SMART:

Specific

MeasurableAccurate

Reliable

Timely

System: A set of components that work together to achieve a common goal

Subsystem: One part of a system where the products of more than one system are

combined to reach an ultimate goal

Closed system: Stand-alone system that has no contact with other systems

Open system: System that interfaces with other systems

Systems thinking:

Viewing organization in terms of suborganizations or subsystems

A framework for problem solving and decision making

Managers focus on overall goals and operations of business

Systems thinking (Cont.)

Information Map: data and information flow within an organization

Information Technology: all technologies that facilitate construction and

maintenance of information systems

The Benefits of Human-Computer Synergy

Synergy: combined resources produce output exceeding the sum of the outputs of the

same resources employed separately


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Translates human thought into efficient processing of large amounts of data

Decision Support Systems (DSS)

Contain models, or formulas, that manipulate data into information

Often answer what if? questions

Group Decision Support Systems (GDSS)

Generate ideas, establish priorities, and reach decisions in group environment

Executive Information Systems (EIS)

Can gather information from vast amounts of data for high-level executives

Highly useful in control and planningExpert Systems (ES)

Programmed with human expertise

Can help solve problems of unstructured nature

Geographic Information Systems (GIS)

Represents local conditions or features

Allows planning, decision-making, and monitoring of local conditions or activities

On-demand Output

Managers can obtain reports tailored to their needs at any time

Strategic Uses of Information Systems

Strategy

A plan designed to help an organization outperform its competitors

Strategic Information Systems

Information systems that help seize opportunities

Can be developed from scratch, or they can evolve from existing ISs

Strategic advantage:

Using a strategy to maximize strength

Competitive advantage:

The result of the use of a strategic advantage Reduce Costs Raise Barriers to Market Entrants

Input: Data are collected and entered into computer

Data processing: Data are manipulated into

information using mathematical, statistical, and other

tools

Output: Information is displayed or presented

Storage: Data and information are maintained for

later use

Input devices: introduce data into the IS

Processor: manipulates data through the IS

Output devices: display information

Storage devices: store data and information

Transaction Processing Systems (TPS)

Record data and perform basic processing

Cash registers and ATMs

Management Information Systems (MIS)

Recorded transactions and other data

produce information for problem solving anddecision making


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Establish High Switching Costs Create New Products or Services Differentiate Products or Services Enhance Products or Services Establish Alliances Lock in Suppliers or Buyers

An IS that helps achieve long-term competitive advantage

SIS embodies two types of ideas:

Potentially-winning business move

How to harness IT to implement that move

Two conditions for SIS:

Serve an organizational goal

Work with the managers of the other functional units

Being first is not enough for success (being first mover might be an obstacle)

Business ideas must be sound

An organization must carefully define what buyers wantEstablishing a recognizable brand name is important but does not guarantee

success; satisfying needs is more important

Business owners must develop new features to keep the system on the leading edge

Adopting a new technology involves great risk

No experience from which to learn

No guarantee new technology will work or customers and employees will

welcome it

Summary

The bleeding edge: failure in an organizations effort to be on the technological leading

edge

Allow competitors to assume the risk

Risk losing initial rewards

Can quickly adopt and even improve pioneer organizations successful

technology

Business strategy and strategic moves can give an organization an advantage

Basic initiatives for gaining a competitive advantageStrategic information systems require fundamental elements

Circumstances and initiatives that make one SIS succeed and another fail

Radio Frequency Identification:

An Overview of the Global Market and Industry

RFID is a wireless Automatic Identification and Data Capture (AIDC) technology that came to

market in the 1980s.

Radio-frequency identification (RFID) is an automatic identification method relying on storing

and remotely retrieving data using devices called RFID tags or transponders. An RFID tag is an

object that can be attached to or incorporated into a product, animal, or person for the


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purpose of identification using radio waves. Chip-based RFID tags contain silicon chips and

antennas.

Advantages

1. No contact requirement

2. Read capability and sometimes a write capability

3. Real-time response

4. More durable than bar code

5. No need for multiple bar codes

Disadvantages

1. Average selling price (ASP) of $0.25

2. Relatively few industry standards

3. Occasional no-reads and mis-reads

4. Software integration hurdles

5. Requisite physical infrastructure

The goal: Improve margins

The strategy

Reduce costs

Controlling inventory, automating security or payment, eliminating labor

And increase sales

Eliminating stock outs

The tactics: Increase real-time visibility with RFID

A UPC on steroids, ePC assigns a number to each itemDifferentiating the 101st can of soup in a shipment from the 1,001st

Including where the soup was canned and where it is in the supply chain

Enumerating more than 16 million types of soup and more than 1 trillion cans of

each type

Summary

What are the top 10 facts about the

RFID market and industry?

1. Price above all. Right now, the market is more attractive for customers than suppliers.

2. RFID is a technology solution in search of a problem, and there is also an industry

problem in search of a solution.

3. The general industry is chasing volume, hoping that with greater volume comes much

lower costs and prices.

4. The market growth rate depends most on the price decline rate.

5. The industry and market suffer from too few standards.

6. Integration issues, from culture to software, are evident and often painful.

7. Distribution channel problems are impeding growth.

8. As of today, there is no killer application but the killer app may ultimately reside in thehomeland security market.

9. Profitable niches do exist for suppliers.

10.Customers will continue to benefit from the intelligent application of RFID technology.


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Internet, Intranets, Extranets and E-Commerce

The Development of the Internet

ARPANET was open system designed for the free flow of information, but

available only to members of academic institutions and some in the defense

industry.

U.S. government decided to split the network into a civilian one and a militaryone

Civilian network became the Internet

Internet is now a network of networks

Definitions

Uniform Resource Locator (URL)

Hypertext Transfer Protocol (HTTP)

Domain Name

Hypertext Markup Language (HTML)

Top Level Domain (TLD)

Intranet

A within-organization computer network that uses Internet technologies to

communicate

Extranet

Uses Internet technologies to facilitate communication and trade between

an organization and its business partners, such as suppliers

Business-to-Business Trading (B2B)

Electronic Data Interchange (EDI)

Exchanges and Auctions

Online Business Alliances

Application and Storage Service Providers

Business to consumer (B2C)

Advertising

E-retailing

Customer Relationship Management (CRM)

Consumer Profiling

Information Systems in Business Functions

ISs can help companies attain more effective and efficient business processes

Effectiveness

The degree to which a task is accomplished

Efficiency

Determined by the relationship between resources expended and benefits

gained in achieving a goal

IP Number

Domain Naming System (DNS)

A domain name is assigned to each IP

address

Domain names are registered by one of agroup of companies authorized to assign

unique names

Auctions and Reverse Auctions

Content Providers

Software SalesStock Trading

Distributed R&D


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Accounting

The purpose of accounting is to track every financial transaction within a company,

from a few cents to multi-billion dollar purchase,

from salaries and benefits to the sale of every item

Without tracking the costs of labor, materials, purchased services using a cost-

accounting system, a company may discover that it sells products below what it cost to

make them

Without a system of accounts receivable, managers may not know who owes the

company how much money and when it is due

Without an accounts payable system, managers can not know how much money the

company owes each supplier and when payment is due

Without a system that records and helps plan cash flow, managers cannot keep

enough cash in the bank to make payment on schedule

At the end of the year, the company cannot present a picture of its financial situation

(balance sheet and profit-and-loss report) unless it maintains a general ledger to recordevery transaction with a financial impact

Accounting and IT

That is why accounting was the earliest business functions to embrace IT

General ledger, accounts receivable, accounts payable, and cash flow books

conveniently lend themselves to computerization and can easily generate balance

sheets and profit-and-loss statements from records.

AISs automatically post transactions in the books and automate generation of reports

for management and legal requirementsThree types of AISs

Transaction processing systems (TPS)

Cost accounting systems

Managerial accounting systems

Transaction processing systems (TPS)

They route every purchase of raw materials or services to the accounts payable

system, which uses it to produce checks

Whenever a sale is recorded, the transaction is routed to the accounts receivable

system (which generate invoice) and other destination

Total of accounts payable and receivable can be automatically transferred tobalance sheet

Data from the general ledger can be automatically compiled to generate a

cash-flow report or a profit-and-loss report for the past quarter or year.

Accounting ISs can generate any of these reports on demand, as well as at

scheduled times.

Cost accounting systems

The cost accounting systems trackcost of labor, materials, consulting fees, and

every other expense related to products development and manufacture

The system automatically captures records of every $ spent (originally recorded

in the payroll and purchasing systems) and routes expenses to the appropriatework order (authorization to perform a work for a specific purpose)

Without cost accounting system, it would be impossible to determine the cost

developing a new product and manufacturing an item.

Managerial accounting systems


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Accounting systems assist managers in organizing quarterly and annual budgets

for departments, division, and entire corporations.

They help also managers control budgets by tracking income and expense in real

time comparing them with the amounts predicted in the budgets.

Electronic Data Processing (EDP) Audits

Ensure electronic systems comply with standard regulations and acceptable rules

Ensure systems cannot be manipulated to circumvent acceptable principles

Finance

The job of financial managers is to manage money as efficiently as possible by:

Collecting payables as soon as possible

Making payments by the latest time allowed by contract or law

Ensuring sufficient funds are available for day-to-day operations

Taking advantage of opportunities to accrue the highest yield on funds not usedfor current activities

Cash Management

Financial ISs help balance the need to accrue interest against the need to have cash

available

Cash management systems (CMS):

Handle cash transactions specifically

Electronic fund transfer (EFT):

Electronic transfer of cash from one bank account to another

Investment Analysis and Service

Analyze and project prices of a specific stock or bond

Transmit buy and sell orders electronically

Provide clients with a detailed statement

Monitor account information and news online

Engineering

ISs reduce engineering lead time or time-to-market

Key to maintaining a competitive edge

Computer-Aided Design (CAD) Systems

Help engineers and technicians design new products and quickly modify

and store drawings electronically

Rapid Prototyping:

Creating one-of-a-kind products to test design in 3D

Manufacturing & Inventory Control

IT helps in these manufacturing activities:

Plant activity scheduling

Material requirement assessment

Material reallocation between orders


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Dynamic inventory management

Grouping work orders by characteristics

Resource qualification for task completion

Materials Requirement Planning (MRP)

Take customer demand as initial input (ie DELL model)

Number of product units needed and when they are needed

Use long-range forecasts to put long-lead material on order

Help reduce inventory cost while ensuring availability

Combines MRP with other manufacturing-related activities to plan the manufacturing

process such as:

Shop activity control and purchasing

Source of demand

Customer order entry and forecasting

Support functions such as financial management, sales analysis, and data

collection

Manufacturing Execution Systems (MES)

Track, schedule, and control manufacturing processes

Collect data such as:

Hours machine operates every day of the month (resale value)

Hours the machine is idle and why (productivity)

Monitoring and Control

Supply chain management (SCM)Managers know status of product during manufacturing

Recent IS control as well as monitor manufacturing process

System at Ford Motor Company designed to ensure no assemble steps are missed

Marketing, Sales, & Customer Service

Market Research

Statistical models help market researchers find the best populations for new and

existing products

Targeted MarketingDatabase management systems (DBMS) help define potential customers as

narrowly as possible

The Internet as a Marketing and Selling Medium

Web lets companies reach more shoppers and serve them better

Mobile Commerce (M-Commerce) is the newest form of marketing

Commercial announcements pervade the Web

Sales Force Automation

Equipping salespeople with information technology to facilitate productivityIT allows salespeople to present different options for products and services on the

spot

Customer Relationship Management


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Customer Relationship Management (CRM) software for companies to better serve and

know customer needs

Track past purchase and payments

Update online answers to frequently asked questions

Analyze customers contact with company

Web-based Customer Service available 24/7

Human Resources

Employee Record Management

Reduce space needed to store records, time to retrieve them, and costs of both

Promotion and Recruitment

Search databases for qualified personnel

Use intranet to post job vacancies

Use the Web to recruit

Training

Multimedia software training is replacing classrooms and teachers

Training software simulates an actual task or situation and includes evaluationtools

Evaluation

Evaluation software helps standardize the evaluation process and adds a certain

measure of objectivity and consistency

Compensation and Benefits Management

ISs can help manage compensation efficiently and effectively

Calculate salaries, hourly pay, commissions, and taxes

Automatically generate paychecks or direct deposits

Special software helps manage benefits, such as health insurance, life insurance,

retirement plans, and sick and leave days

Enterprise Resource Planning (ERP)

All business functions served by one system that supports different activities for different

departments

Support supply chain management, the series of main and supporting activities from

order to delivery

Groupware and Collaborative Work

GroupWare lets workers in different locations communicate ideas, brainstorm, and work

together as if they were in the same place

Document Control

Users can distribute and track electronic documents without working with

outdated information

Collaborative Projects

Users can coordinate work on a single document from many different terminals

Ethical and Societal Issues Privacy? What Privacy?

What is Privacy?

Ones right to control information about oneself

Not a constitutional right per se; secured by laws or convention


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Increasing number of organizations may access information via better IT

hardware and software

Business and civil rights advocates dispute degree of privacy vs. utility of

information access

Business Arguments

Necessary to collect basic financial and personal information as cheaply as

possible

Consumers benefit eventually from competitive environment augmented by

readily available information

Consumer Arguments

Resent unsolicited mail and telephone calls

Resent being refused credit because of credit bureau mistakes

Frightened by dossier phenomenon

Loss of control over information unfairinformation gathered for a particular

purpose with permission should remain restricted

Seven Commandments of Personal Data Collection and Maintenance

1 Companies should inform people who provide information of specific,exclusive

purpose

2 Relevance: Companies should record and use only data necessary to fulfill their

own purposes

3 Accuracy: Companies should ensure that their data are accurate

4 Currency: Companies should make sure that all data about an individual are

current

5 Security: Companies should limit data access to only those who need to know

6 Time Limitation: Companies should retain data only for the time period

necessary

7 Scrutiny: Companies should establish procedures to let individuals review theirrecords and correct inaccuracies

Summary

There are various business functions and ISs have a role in ALL these functions

ISs relate to each other in basic business functions

IT is used in business functions to make business more effective and more efficient

Enterprise resource planning (ERP) systems help run different functions

Subcontracting and Outsourcing

Outsourcing

Short-term contractual relationship with a service firm to develop a specific

application

Long-term contractual relationship with a service firm to take over an

organizations IS functions

Application Service Provider

Allows use of applications via the Internet

In-house use of development tools to create applications

Outsourcing means two different things:

A short-term contractual relationship with a service firm to develop a specific

application for an organization


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A long-term contractual relationship with a service firm to take over all or some of

an organizations IS functions

An organization trusts all activities associated with its ISs to another company:

Purchasing and maintaining hardware

Developing, purchasing, and maintaining software

Installing and maintaining communications networks

Developing, maintaining, and operating Web sites

Staffing help desks

Running the IS daily operations

Managing customer and supplier relations

4 major considerations:

What are our core business competencies? Of the business we conduct, what

specialties should we continue to practice ourselves?

What do we do outside our specialties that could be done better for us byorganizations that specialize in that area?

Which of our activities could be improved if we created an alliance with IS

organizations?

Which of our activities should we work to improve internally?

Advantages of Outsourcing

Improved financial planning

Reduced license and maintenance fees

Increased attention to core businessShorter implementation cycles

Reduction of personnel and fixed costs

Increased access to highly qualified know-how

Ongoing consulting as part of standard support

Increased security

Risks of Outsourcing

Loss of control

Loss of experienced employees

Risks of losing a competitive advantageHigh price

Two classifications of ready-made software:

Inexpensive applications to help in the office

Expensive, large applications that span an entire

organization:

Human resource management

Financial management

Benefits

Immediate system availability

High quality

Low price

Available support


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Application Service Providers

An organization that offers the use of software applications through communication

lines

Ethical and Societal Issues

Computer Use Policies for Employees

End-user computing encourages increased productivity, but business computers are

often used for unproductive personal activities

Most state statutes do not address unauthorized use of computers

Employers should provide clear guidelines stating acceptable and unacceptable use of

company computers

Summary

There are several options available for systems acquisition:

Outsourcing

Ready-made softwareUser-developed applications

ASP

There are trade-offs for each option

Each set of circumstances will dictate the appropriate approach

Project management and change

3 main objectives of change control:

1-Influence the factors that create changes to ensure they are beneficial

2-Determine that a change has occurred3-Manage actual changes when and as they occur

Former view: the project team should strive to do exactly what was planned on time

and within budget

Problem: stakeholders rarely agreed up-front on the project scope, and time and costs

estimates were inaccurate

Modern view: Project management is a process of constant communication and

negotiation

Solution: changes are often beneficial and the project team should plan for them

A formal, documented process that describes when and how official projectdocuments and work may be changed

Describes who is authorized to make changes and how to make them

Often includes a change control board, configuration management and a process for

communicating changes

What and Why?

Changes relate to alterations in the projects overall baseline including:

-Scope: requirement, design, methodology/processes

-Cost: budget, contract price, procurement

-Time: phase-release- and overall delivery schedule

-Quality: stakeholder expectations, contracted requirement


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Benefits of change:

-Reduced life cycle costs (eg lower maintenance or operating costs)

-Increased returns from the project (eg earlier project completion)

-Reduced project delivery costs (eg lower implementation costs)

-Intangible improvements (eg stakeholder satisfaction)

However, keep in mind that change implies problems

The organisational context of project management

Structural frame:

Focuses on roles and responsibilities, coordination and control. Organisation charts help

define this frame.

Political frame:

Assumes organisations are coalitions composed of various individuals and interest

groups. Conflict and power are key issues.

Human resource frame:

Focuses on providing harmony between needs of the organisation and needs of people

Cultural frame:Focuses on symbols and meanings related to events. Company culture is an important

point.

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