Foundation Of Information Systems In Business

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

Learning Objectives:
Understand the concept of a system and how

it relates to information systems.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

What Is An Information System?

An Information System can be any organized

combination Of: - people, - hardware, - software, - communications networks, - policies.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

What Is An Information System? (continued)

People rely on modern information systems

to communicate using a variable: - physical devices (hardware). - information processing instruction and procedures (software). - communications channels (network). - stored data (data resources).

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

Examples Of Information Systems:

Smoke signals for communication

Card catalog in a library

The cash register

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

Real World Case: Heidelberg: Using IT To Build Smart Products And Services
Consider Heidelberger Druckmaschinen AG of

Germany, the number one maker of high end end printing presses for printers and print media producers throughout the world. For all of its long history, the company has offered repair services to its customers.
Several years ago, Heidelberg developed the ability to monitor its equipment remotely using built in sensors, networking microprocessors, and other information technologies.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

Real World Case: Heidelberg: Using IT To Build Smart Products And Services (continued) Heidelberg soon found that it could provide maintenance much more cost effectively with the smart products. Now with its machines communicating continuously over the internet, relaying information about their status between the print shops and Heidelbergs regional and global technical support specialists, the company has the access and insight to optimize printing performance in customers shops and minimize maintenance and repair costs for Heidelberg as well as its customers.
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Real World Case: Heidelberg: Using IT To Build Smart Products And Services (continued) With such smart services, Heidelberg now offers total supports of its products, which for example, can extend even to the removal and resale of its machines. Thus the self monitoring and networking capabilities built into its products provide a strategy opportunity for Heidelberg to use information technology to become a partner in the successful operations of its customers, while reducing its costs and creating new sources of revenue from smart services.
Ir. Muhril Ardiansyah, M.Sc., Ph.D. 8

Real World Case: Heidelberg: Using IT To Build Smart Products And Services (continued)

Questions: Why should manufacturing companies build smart products and provide smart services?

What business benefits can be gained? Provide several examples beyond discussed in this case

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

Real World Case: Heidelberg: Using IT To Build Smart Products And Services (continued) Questions (continued) What information technologies are used by the companies in this case to build smart products and provide smart services?
What are some limitations of a smart products and

smart services strategies?

Use the internet to investigate how Heidelberg, is

proceeding in its use of smart products and services.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

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Computer Based Information System & Information Technologies:

1. 2. 3. 4. Computer hardware technologies. Computer software technologies. Telecommunications network technologies. Data resource management technologies.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

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The Major Areas Of Information Systems Knowledge Needed By Business Professionals 1. Foundation concepts. concept about the components and roles of information systems.

2. Information technologies. hardware, software, networks, data management, many internet based technologies.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

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The Major Areas Of Information Systems Knowledge Needed By Business Professionals (continued)
3. Business applications. operations, management, competitive advantage of a business. 4. Development processes. plan, develop, and implement information systems to meet business opportunities. 5. Management challenges. the challenges of effectively and ethically managing information technology at end user, enterprise, and global levels of a business.
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The Fundamental Roles Of Information System In Business

There are three fundamental reasons: 1. Support of its business processes and operations. 2. Support of decision making by its employees and managers. 3. Support of its strategies for competitive advantage.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

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Trends In Information Systems:

1. Data processing: 1950s 1960s - electronic data processing systems -- transaction processing, record keeping, and traditional accounting applications. 2. Management reporting: 1960s 1970s - management information systems -- management reports of pre specified information to support decision making.
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Trends In Information Systems (continued):

3. Decision support: 1970s 1980s - decision support systems 4. Strategic and User Support: 1980s 1990s - end user computing systems - executive information systems - expert systems - strategic information systems
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Trends In Information Systems (continued):

4. Electronic Business and Commerce: 1990s 2000s - internet based e business and e commerce systems

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

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The Role Of E Business In Business

Many business today are using internet

technologies to Web enable business process and to create innovative e business application.

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The Role Of E Business In Business (continued)

E business:

the use of internet technologies to work and empower business process, electronic commerce, and enterprise collaboration within a company and with its customers, suppliers, and other business stakeholders.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

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Business Today
Company Boundary Supply chain management: procurement, distribution, and logistics Internet

Engineering and research

Manufacturing and production

Internet Customer relationship management: Marketing, Sales, Customer Service
Ir. Muhril Ardiansyah, M.Sc., Ph.D.

Accounting and finance

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Business Today (continued)

Suppliers and other business partners Extranets

Company
Boundary

Extranets Consumers and business customers

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Business Today (continued)

Intranet:

the internet and internet like networks inside the enterprise.

Extranet:

the internet and internet like networks between an enterprise and its trading partners.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

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Business Today (continued)

Electronic commerce:

the buying, selling, marketing, and servicing of products, services, and information over a variety of computer networks.

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Types Of Information Systems

Information Systems

Operations Support Systems

Management Support Systems

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Types Of Information Systems (continued)

Operations Support Systems

Specialized Processing Systems

Transaction Processing Systems

Process Control Systems

Enterprise Collaboration Systems

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Types Of Information Systems (continued)

Management Support Systems

Management Information Systems

Decision Support Systems

Executive Information Systems

Specialized Processing Systems

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Types Of Information Systems (continued)

Operations support systems:

- Transaction processing systems -- process data resulting from business transactions, update operational databases, and produce business documents. Examples: Sales and inventory, processing and accounting systems.
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Types Of Information Systems (continued)

Operations support systems (continued):

- Process control systems. -- minor and control industrial process. Examples: Petroleum refining, power generation, steel producing systems.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

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Types Of Information Systems (continued)

Operations support systems (continued):

- Enterprise collaboration systems. -- support team, workgroup, and enterprise communications and collaboration. Examples: email, chat, video conferencing groupware systems.

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Types Of Information Systems (continued)

Management support systems:

- Management information systems -- provide information in the form of pre specified reports and displays to support business decision making. Examples: Sales analysis, production performance, cost trend reporting systems.
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Types Of Information Systems (continued)

Management support systems (continued):

- Decision support systems -- provide interactive ad hoc support for the decision making processes of managers and other business professionals. Examples: product pricing, profitability forecasting, risk analysis.
Ir. Muhril Ardiansyah, M.Sc., Ph.D. 31

Managerial Challenges Of Information Technology

The Business Enterprise: Strategies/Processes /Structure/Culture
Business/IT Challenges

Information Technology

Customer Value Business Value

Business/IT Developments

Business/IT Goals

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Managerial Challenges Of Information Technology (continued)

Business/IT Challenges Business/IT Developments Business/IT Goals Give customers what they want, when and how they want it, at the lowest cost

Speed and flexibility requirements of product development, manufacturing, and delivery cycles,
Integration of e business and e commerce into the organizations strategies, process, structure, and culture

* Use of the internet, intranets, extranets, and the WEB

Coordination of manufacturing and business process with suppliers and customers

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Developing Information System (IS) Solutions

Investigate

Analyze

Design

Maintain

Implement

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The IS (Information System) Functions:

A major functional area of business equally

as important to business success, as the function of: - accounting, - finance, - operations management, - marketing, - human resource management.
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The IS (Information System) Functions (continued):

An important contributor to:

- operational efficiency, - employee productivity, - customer service and satisfaction.

A major source of information and support

needed to promote effective decision making by managers and business professionals.

Ir. Muhril Ardiansyah, M.Sc., Ph.D. 36

The IS (Information System) Functions (continued):

A vital ingredient in developing competitive

products and services that give an organization a strategic advantage in the global market place.

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Foundation Concepts: The Components Of Information Systems:

Technology:

the computer network are systems of information processing component that use a variety of: hardware, software, data management, and telecommunication network technologies.
Applications:

the electronic business and commerce applications involve interconnected business information systems.
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Foundation Concepts: The Components Of Information Systems (continued):

Development:

that developing ways to use information technology in business includes designing the basic components of information system.
Management:

the managing information technology emphasizes the quality, strategic business value, security.
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What Is A System?
Systems have three basic functions:
1. Input: Involves capturing and assembling elements that enter the system to be processed. Example: - raw materials, - energy, - data.

Ir. Muhril Ardiansyah, M.Sc., Ph.D.

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What Is A System? (continued)

Systems have three basic functions (continued): 2. Processing: involves transformation processes that convert input into output. Example: - manufacturing process, 3. Output: involves transferring elements that have been produced by a transformation process to their ultimate destination. Example: - finished products, - human services
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Stakeholders In The Business Environment

CONTROL

Management FEEDBACK
Information System

Economic Resources: people, money, material, machines, land, facilities, energy, information

INPUT

Business Process: market, develop, produce, and deliver, products and services, support customers, other processes

Goods and Services: products, services, payments, contributions, information, other effects
OUTPUT

PROCESSING Financial Institutions, Labor Unions, Stockholders, Customers, Competitors, The Community, Government Agencies, Suppliers
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Components Of An Information System

PEOPLE RESOURCES (end users and IS specialists); SOFTWARE RESOURCES (programs and procedures); HARDWARE RESOURCES (machines and media); NETWORK RESOURCES (communications media and network support); DATA RESOURCES (data and knowledge bases);

SYSTEM ACTIVITIES
Control System Performance

Input Of Data Resources

Processing Data Into Information

Output Of Information Products

Storage Of Data Resources

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Examples Of Information System Resources And Products

Information Systems Resources And Products
People Resources Network Resources

Hardware Resources

Software Resources

Data Resources

Information Products

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Information Systems Resources And Products

People resources:

- specialist (system analysts, software developers, system operators). - end users (anyone else who uses information systems).
Hardware resources:

- machines (computers, video monitor, magnetic disk drives, printers, optical scanners). - media (floppy disks, magnetic tape, optical disks, plastic cards, paper forms).
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Information Systems Resources And Products (continued)

Software resources:

- programs (operating system program, spreadsheet programs, word processing programs). - procedures (data entry procedures, error correction procedures).
Data resources:

- product description, customer records, employee files, inventory databases.

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Information Systems Resources And Products (continued)

Network resources:

- communications media, communication processors, network access and control software.

Information products:

- management reports and business documents using text and graphics displays, audio responses, and paper forms.
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Business Examples
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 Muhril Ardiansyah, M.Sc., Ph.D. to indicate proper audible signals Ir. 48

Recognizing Information Systems

As a business professional, You should be able to recognize the fundamental components of information systems You encounter.

You should be able to identify: ** The people, hardware, software, data, and network resources they use. ** The types of information products they produce. ** The way thy perform input, processing, output, storage, and control activities.
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Real World Case 4 Continental Airlines: This Call Is Being Monitored

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