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‡ Refers to an economy
± that is based on digital technologies,
including digital communication networks,
computers, and software.

‡ Also sometimes called the Internet

economy, the New economy, or the Web
economy.

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‡ Is an organized set of components for collecting,
transmitting and processing data in order to deliver
information for action
‡ In business firms, this information is necessary
for both operations and management
‡ Today¶s organizations cannot be operated or
managed effectively without information systems
that are built using a range of information
technologies

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G Information Systems (IS)
G Collect, process, store, analyze, and disseminate
information for a specific purpose.

G Information systems are comprised of

Inputs (data, instructions)
Outputs (reports, calculations)
Feedback mechanisms that controls the operation
An environment that it works within

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‡ Data
± Streams of raw facts representing events such
as business transactions

‡ Information
± Clusters of facts that are meaningful and useful
to human beings in the processes such as
making decisions

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 Fast and accurate data processing, with large capacity

storage and rapid communication between sites
 Instantaneous access to information
 Means of coordination
 Boundary spanning

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‡ Electronic commerce

‡ Electronic business

‡ Digital market

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‡ Internet links buyers, sellers

‡ Lower transaction costs

‡ Goods and services advertised, bought,

exchanged worldwide

‡ Business
Business--to
to--business transactions increasing

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‡ Electronic business
± Executing all the firm¶s business processes with
internet technology
‡ Intranet
± Business builds private, secure network based on
internet technology

‡ Extranet:
± Extension of intranet to authorized external users
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Timeliness
‡ Completeness
‡ Conciseness
‡ Relevance
‡ Accuracy
‡ Precision
‡ Appropriateness of form

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‡ It is an integrated set of components or entities that
interact to achieve a particular function or goal.
‡ Systems have characteristics such as boundaries,
outputs and inputs, methods of converting inputs into
outputs, and system interfaces
‡ They are composed of interrelated and interdependent
subsystems
‡ Every system has a boundary that defines its scope of
activities
‡ Systems may consist of numerous subsystems with
elements, interactions and objectives

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‡ The system¶s environment consists of people,
organizations and other systems that supply data to or
receive data from the system
Open Systems
‡ These are the systems that operate in an external
environment and exchange information and material
with that environment
‡ The external environment consists of the activities
external to the system boundary with which the system
can interact
‡ An open system needs to receive feedback to change and to
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Closed System
‡ It is relatively self-
self-contained and does not exchange
information with its environment
‡ Closed systems do not get the feedback they need from
the external environment and so tends to deteriorate

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System feedback
‡ A system needs feedback that is an indicator of current
performance rates when compared to a set of standards,
to do its job
‡ With effective feedback, continuing adjustments in the
activities of a system can be made to assure that the
system achieves its goals
‡ Measuring performance against a standard is an
effective control mechanism

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Systems Entropy
‡ This corresponds roughly to chaos or disorder-
disorder- a state
that occurs without maintenance
‡ The process of maintaining a system is a process of
decreasing entropy or increasing orderliness

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Several different V
  
 

information systems can  
 systems
systems
exist in one organization. involve information flow in
two or more organizations.
A particular information
system may be composed An enterprise wide system
of several separate or inter organizational
information systems.
systems. information system is
composed of large & small
Information systems are computers & hardware
connected by means of connected by different
electronic networks. types of networks.

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A computer-
computer-based information system (CBIS)
is an information system that uses computer
technology to perform some or all of its
intended tasks.

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Dardware is a set of
devices such as processor,
monitor, keyboard, and
printer..
printer
Software is a set of
programs that enable the
hardware to process data
data..
Database is a collection of
related files, tables,
relations, and so on, that
stores data
data..
Network is a connecting
system that permits the
sharing of resources
between computers.
Procedures are the set of
instructions about how to
combine the above
components.
People are those individuals
who work with the system
or use its output.
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± Frequently, an organization uses several application programs
in one functional area or department.

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± While a departmental IS is usually related to a functional
area, the collection of all departmental applications when
combined with other functions¶ applications comprises the

  
 
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± Some information systems connect several organizationsî
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A The Accounting Information System

A The Finance Information System
A The Manufacturing (operations/production)
Information System
A The Marketing Information System
A The Duman Resources Management Information
System

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A Transaction Processing System (TPS)
A Management Information System (MIS)
A Knowledge Management System (KMS)
A Office Automation System (OAS)
A Decision Support System (DSS)
A Enterprise Information System (EIS)
A Group Support System (GSS)
A Intelligent Support System (ISS)

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A A mainframe-
mainframe-based system.

A A standalone personal computer (PC).

A A distributed or a networked computing system

(several variations exist).

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‡ Industry level effect: - It changes an industry¶s :
 Products and services
 Production economics
 Markets
‡ Firm level effect: - It affects key competitive forces:
 Buyers
 Substitute products
 Suppliers
 New entrants
 Rivals aÑ
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Strategic level: - It supports a firm¶s strategy:

 Low
Low--cost leadership
 Product differentiation
 Market specialization

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Operational level:
level:
± These are the day-
day-to
to--day activities of the firm that
involve acquiring and consuming resources
Tactical level:
level:
± Managers review operational activities to make
sure goals are met and resources are not wasted
level:
Strategic level:
± Strategic planners address problems that involve
long--range analysis and prediction î
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‡ Repetitiveness
‡ Predictability
‡ Emphasis on the past
‡ Detailed nature
‡ Internal origin
‡ Structured form
‡ Great accuracy


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‡ Data are summarized, aggregated or analyzed

‡ Variety of reports like summary, exception,
ad
ad--hoc reports are generated
‡ Periodic nature
‡ Unexpected findings
‡ Comparative nature
‡ Summary form
‡ Both internal and external sources

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‡ Ad-hoc basis: produced regularly or periodically

Ad-
‡ Unexpected information
‡ Predictive nature
‡ Summary form
‡ External data
‡ Unstructured format
‡ Subjectivity

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‡ Executive Support Systems (ESS)

‡ Decision Support Systems (DSS)
‡ Management Information Systems (MIS)
‡ Knowledge Work Systems (KWS)
‡ Office systems
‡ Transaction Processing Systems (TPS)


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‡ These are the basic business systems that serve the

operational level

‡ It is a computerized system that performs and records

the daily routine transactions necessary for the conduct
of the business

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Knowledge level
‡ Inputs: design specifications
‡ Processing: modeling
‡ Outputs: designs, graphics
‡ Users: technical staff and professionals

Example: engineering work station

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Management level
‡ Inputs: high-
high-volume data
‡ Processing: simple models
‡ Outputs: summary reports
‡ Users: middle managers

Example: Annual Budgeting

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Management level
‡ Inputs: low-
low-volume data
‡ Processing: interactive
‡ Outputs: decision analysis
‡ Users: professionals, staff

Example: contract cost analysis

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‡ Inputs: aggregate data
‡ Processing: interactive
‡ Outputs: projections
‡ Users: senior managers

Example: 5-
5-year operating plan

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Major functions of systems:

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

Major application systems:

‡ Sales order info system, market research system, pricing
system

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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
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Major functions of systems:

‡ Budgeting, general ledger, billing, cost accounting

Major application systems:

‡ General ledger, accounts receivable, accounts payable,
budgeting, funds management systems

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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

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‡ Enterprise systems
‡ Supply Chain Management Systems
‡ Customer Relationship Management Systems
‡ Knowledge Management Systems

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‡ Close linkage and coordination of activities involved

in buying, making, and moving a product
‡ Integrates supplier, manufacturer, distributor, and
customer logistics time
‡ Reduces time, redundant effort, and inventory costs
‡ Network of organizations and business processes

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‡ Delps in procurement of materials, transformation of

raw materials into intermediate and finished
products
‡ Delps in distribution of the finished products to
customers
‡ Includes reverse logistics - returned items flow in
the reverse direction from the buyer back to the
seller

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‡ Decide when, what to produce, store, move
‡ Rapidly communicate orders
‡ Communicate orders, track order status
‡ Check inventory availability, monitor levels
‡ Track shipments
‡ Plan production based on actual demand
‡ Rapidly communicate product design change
‡ Provide product specifications
‡ Share information about defect rates, returns

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‡ Manages all ways used by firms to deal with existing and

potential new customers
‡ Business and technology discipline
‡ Uses information system to coordinate entire business
processes of a firm
‡ Provides end-
end-to
to--end customer care
‡ Provides a unified view of customer across the company
‡ Consolidates customer data from multiple sources and
provides analytical tools for answering questions

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‡ Creating knowledge
‡ Discovering and codifying knowledge
‡ Sharing knowledge
‡ Distributing knowledge

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