System

•A set of interconnected elements to achieve a

common objective
•Elements are interrelated and interdependent
•Composed of sub-systems, which in turn may be
made up of other subsystems
•The set of elements may be: Input(s), Process(es), or
output(s)
•Information system converts data into information
 Information system
An information system can be defined technically as a
set of interrelated components that collect , process,
store and distribute information to support decision
making and control in an organization.
 Information system

•Information system:
–Input: Captures raw data from organization or
external environment
–Processing: Converts raw data into meaningful
form
–Output: Transfers the processed information to
the people who will use it or to the activities for
which it will be used.
Figure : Input-process-output
Major Roles of IS

Support
Competitive
Advantage

Support
Business
Decision Making

Support of
Business Processes and Operations
Information Systems Framework
Information Systems Concepts (Continued)

• Foundation Concepts
–Fundamental concepts about the
components and roles of information systems.

• Information Technologies
–Major concepts, developments, and
management issues in information technology.
• Business Applications
–The major uses of information systems for
operations, management, and competitive
advantage.
• Development Processes
–How business professionals and information
specialists plan, develop, and implement
information systems.

• Management Challenges
–The challenge of managing ethically and
effectively.
Components of an INFORMATION System
 Components of an Information System

Figure 1.6 Components of an information system

•Data Resources
–Data versus Information

• Hardware Resources
–Computer systems
–Peripherals

• Software Resources
–System software
–Application software
–Procedures

• People Resources
–End Users
–IS Specialists
• Network Resources
–Communication media
–Network support
Contemporary Approaches to Information Systems

The study of information systems deals with issues and insights contributed
from technical and behavioral disciplines.
•Technical approach
•Emphasizes mathematically based models to
study information systems.
•The disciplines that contribute to the technical
approach are Computer science, management
science, operations research.

• Behavioral approach
• Behavioral issues (strategic business
integration, design, implementation,
utilization and management etc.)
• Psychology, economics, sociology
 Approaches to IS
TECHNICAL APPROACHES

COMPUTER
OPERATIONS
SCIENCE
RESEARCH

MANAGEMENT
SCIENCE
MIS
SOCIOLOGY
SOCIOTECHNICAL
PSYCHOLOGY POLITICAL
SCIENCE

BEHAVIORAL APPROACHES
 Management Information Systems
MIS Combines the work of computer science, management
science and operations research with a practical orientation
toward developing system solutions to real-world problems and
managing information technology resources. It is also
concerned with behavioral issues ( sociology, economics and
psychology) surrounding the development, use and impact of
information systems,
•Four main actors of MIS
•Suppliers of hardware and software
•Business firms making investments and seeking to obtain
value from the technology
•Managers and employees seeking to achieve business value
•Firm’s environment (The contemporary legal, social and
cultural context)
 Approach of Sociotechnical view
•Optimal organizational performance is achieved by
jointly optimizing both the social and technical
systems used in production.

•Helps avoid purely technological approach

 Chapter 2 Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Different Kinds of Systems

Three main categories of information systems serve

different organizational levels:

1. Operational-level systems: support operational managers,

keeping track of the elementary activities and
transactions

2. Management-level systems: serve the monitoring,

controlling, decision-making, and administrative activities

3. Strategic-level systems: help senior management tackle

and address strategic issues
 Types of IS
1. Transaction processing systems (TPS)
2. Management Information Systems (MIS)
3. Intelligent support systems (ISS),
4. Office automation systems (OAS)
 Transaction processing systems (TPS)
A Transaction processing systems (TPS) is an
1 information system that records company‘s internal
and external transactions.
A TPS meets the needs of operational managers.
The output of the TPS becomes the input to an MIS.

• Basic business systems that serve the

operational level.

•A computerized system that performs and records

the daily routine transactions necessary to the
conduct of the business.
A Symbolic Representation for a Payroll TPS
 Management Information Systems (MIS)

Management Information Systems are general-

2 purpose well-integrated systems that monitor and
control the internal operations of an organization.

Management level

• Inputs: High volume transaction level data

• Processing: Simple models

• Outputs: Summary reports

• Users: Middle managers

Example: Annual budgeting

Management Information Systems (MIS) (continued)
Management Information Systems (MIS) (continued)
A sample MIS report
 Intelligent Support Systems are systems that
facilitate decisions requiring the use of
Knowledge, intuition, experience and expertise
3 systems.
It consists of decision support systems (DSS),
executive information systems (EIS) and expert
systems (ES).
Decision-Support Systems (DSS)
Management level
• Inputs: Transaction level data

• Processing: Interactive

• Outputs: Decision analysis

• Users: Professionals, staff

Example: Contract cost analysis

Decision-Support Systems (DSS) (Continued)
Voyage-estimating decision-support system
EXECUTIVE SUPPORT SYSTEMS (ESS):

• Inputs: Aggregate data

• Processing: Interactive

• Outputs: Projections

• Users: Senior managers

Example: 5 year operating plan

Model of a Typical Executive Support System
EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)

• Top Level Management

• Designed to the individual senior manager

• Ties CEO to all levels

• Very expensive to keep up

• Extensive support staff

 4. Office automation systems (OAS) that are
designed to increase the productivity of clerical workers
4 and knowledge workers and enhance communication in
the workplace.
Word processing, Desktop publishing, E-mail, Voice mail,
Videoconferencing, Image retrieval and storage. Fax,
Electronic meeting systems.
Relationship of Systems to One Another
Interrelationships among systems
Types Input Processing Output Users Examples

TPS Transaction Uses procedures Summaries Lower Sales

related data & rules of level Credit &
Repetitive tasks Transaction managers payments
Control oriented
MIS Output from Measures & Summary & Middle Monthly
TPS monitors exception level production
Other internal Operational reports managers reports
data performance
ISS Internal & Interactive ad hoc alternatives Top Investment
external data & reporting Analysis managers portfolios
models Generates reports Es
Knowledge & alternatives knowledge
experience workers
OAS Data & Formatting Documents knowledge Fax
Information Summarizing & clerical Multi media
workers
Video
Graphics conferencin
Multi g
media
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems

Major functions of systems:

• Sales management, market research, promotion,
pricing, new products

Major application systems:

• Sales order info system, market research system,
pricing system
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems

SYSTEM DESCRIPTION ORGANIZATIONAL
LEVEL

Order processing Enter, process, and track orders Operational

Pricing analysis Determine prices for products and Management

services

Sales trend Prepare 5-year sales forecasts Strategic

forecasting
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Manufacturing and Production Systems

Major functions of systems:

• Scheduling, purchasing, shipping, receiving,
engineering, operations

Major application systems:

• Materials resource planning systems, purchase
order control systems, engineering systems,
quality control systems
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Manufacturing and Production Systems

SYSTEM DESCRIPTION ORGANIZATIONAL
LEVEL

Machine Control the actions of machines and Operational

control equipment

Production Decide when and how many products Management

planning should be produced

Facilities Decide where to locate new production Strategic

location facilities
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Overview of an Inventory System

 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Financing and Accounting Systems

Major functions of systems:

• Budgeting, general ledger, billing, cost
accounting

Major application systems:

• General ledger, accounts receivable, accounts
payable, budgeting, funds management systems
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Financing & Accounting Systems (Continued)

SYSTEM DESCRIPTION ORGANIZATION-AL
LEVEL

Accounts Tracks money owed the firm Operational

receivable

Budgeting Prepares short-term budgets Management

Profit planning Plans long-term profits Strategic

 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems

Major functions of systems:

• Personnel records, benefits, compensation, labor
relations, training

Major application systems:

• Payroll, employee records, benefit systems,
career path systems, personnel training systems
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems (Continued) An Employee Recordkeeping System

 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications

Enterprise Systems
• Enterprise systems, also known as enterprise
resource planning (ERP) systems, provide a
single information system for organization-wide
coordination and integration of key business
processes.

• Information that was previously fragmented in

different systems can seamlessly flow
throughout the firm so that it can be shared by
business processes in manufacturing,
accounting, human resources, and other areas.