ISYS104 Tutorial – week 3

Review Questions

1.What are business processes? How are they related to information systems?
Define business processes and describe their relationship to business performance.

A business process is a logically related set of activities that define how specific business
tasks are performed. Business processes are the ways in which organizations coordinate
and organize work activities, information, and knowledge to produce their valuable
products or services.

How well a business performs depends on how well its business processes are designed
and coordinated. Well-designed business processes can be a source of competitive
strength for a company if it can use the processes to innovate or perform better than its
rivals. Conversely, poorly designed or executed business processes can be a liability if
they are based on outdated ways of working and impede responsiveness or efficiency.

Describe the relationship between information systems and business processes.

Information systems automate manual business processes and make an organization more
efficient. Data and information are available to a wider range of decision makers more
quickly when information systems are used to change the flow of information. Tasks can
be performed simultaneously rather than sequentially, speeding up the completion of
business processes. Information systems can also drive new business models that perhaps
wouldn’t be possible without the technology.

2.Why are information systems so essential for running and managing a business today?

Describe the characteristics of transaction processing systems (TPS) and the role
they play in a business.

Transaction processing systems (TPS) are computerized systems that perform and record
daily routine transactions necessary in conducting business; they serve the organization’s
operational level. The principal purpose of systems at this level is to answer routine
questions and to track the flow of transactions through the organization.
 At the operational level, tasks, resources, and goals are predefined and highly
structured.
 Managers need TPS to monitor the status of internal operations and the firm’s
relationship with its external environment.
 TPS are major producers of information for other types of systems.
 Transaction processing systems are often so central to a business that TPS failure for
a few hours can lead to a firm’s demise and perhaps that of other firms linked to it.
Describe the characteristics of MIS and explain how MIS differ from TPS and from
DSS.

Middle management needs systems to help with monitoring, controlling, decision

making, and administrative activities.
 MIS provide middle managers with reports on the organization’s current
performance. This information is used to monitor and control the business and
predict future performance.
 MIS summarize and report the company’s basic operations using data supplied by
TPSs. The basic transaction data from TPS are compressed and usually presented in
reports that are produced on a regular schedule.
 MIS serve managers primarily interested in weekly, monthly, and yearly results,
although some MIS enable managers to drill down to see daily or hourly data if
required.
 MIS generally provide answers to routine questions that have been specified in
advance and have a predefined procedure for answering them.
 MIS systems generally are not flexible and have little analytical capability.
 Most MIS use simple routines, such as summaries and comparisons, as opposed to
sophisticated mathematical models or statistical techniques.

MIS differs from TPS in that MIS deals with summarized and compressed data from the
TPS.

While MIS have an internal orientation, DSS will often use data from external sources, as
well as data from TPS and MIS. DSS supports “what-if” analyses rather than a long-term
structured analysis of MIS. MIS are generally not flexible and provide little analytical
capabilities. In contrast, DSS are designed for analytical purposes and are flexible.

Describe the characteristics of DSS and explain how DSS differ from ESS.

Decision-support systems (DSS) support nonroutine decision making for middle

managers.
 DSS provide sophisticated analytical models and data analysis tools to support
semistructured and unstructured decision-making activities.
 DSS use data from TPS, MIS, and external sources, in condensed form, allowing
decision makers to perform “what-if” analysis.
 DSS focus on problems that are unique and rapidly changing; procedures for
arriving at a solution may not be fully predefined.
 DSS are designed so that users can work with them directly; these systems include
interactive, user-friendly software.

Executive support systems help senior managers address strategic issues and long-term
trends, both in the firm and in the external environment.
 ESS address nonroutine decisions requiring judgment, evaluation, and insight
because there is no agreed-on procedure for arriving at a solution.
 ESS provide a generalized computing and communications capacity that can be
applied to a changing array of problems.
  ESS are designed to incorporate data about external events, such as new tax laws or
competitors, but they also draw summarized information from information from
internal MIS and DSS.
 ESS are designed for ease-of-use and rely heavily on graphical presentations of
data.

Describe the relationship between TPS, MIS, DSS, and ESS.

Ideally, all four systems use the same basic data. TPS are a major source of internal data
for other systems, especially MIS and DSS. Internal data from TPS and MIS combine
with external data to provide a source of analysis for DSS and ESS. All four systems are
designed to give managers of all organizational levels and complete, consolidated view of
the firm.

3.How do enterprise applications, collaboration and communication systems, and

intranets improve organizational performance?

Explain how enterprise applications improve organizational performance.

An organization operates in an ever-increasing competitive and global environment. The

successful organization focuses on the efficient execution of its processes, customer
service, and speed to market. Enterprise applications provide an organization with a
consolidated view of its operations across different functions, levels, and business units.
Enterprise applications allow an organization to efficiently exchange information among
its functional areas, business units, suppliers, and customers.

Define enterprise systems and describe how they change the way an organization
works?

Enterprise systems integrate the key business processes of an organization into a single
central data repository. This makes it possible for information that was previously
fragmented in different systems to be shared across the firm and for different parts of the
business to work more closely together.

This changes the work flow of an organization:

 Information flows seamlessly throughout an organization, improving coordination,
efficiency, and decision making.
 Gives companies the flexibility to respond rapidly to customer requests while
producing and stocking only that inventory necessary to fulfill existing orders.
 Increases customer satisfaction by improving product shipments, minimizing costs,
and improving a firm’s performance.
 Improves decision making by improving the quality of information for all levels of
management. That leads to better analyses of overall business performance, more
accurate sales and production forecasts, and higher profitability.
Define supply chain management systems and describe how they benefit businesses.

In short, supply chain management systems help businesses better manage relationships
with their suppliers. Objective of SCM: get the right amount of products from the
companies’ source to their point of consumption with the least amount of time and with
the lowest cost. SCM provide information to help suppliers, purchasing firms,
distributors, and logistics companies share information about orders, production,
inventory levels, and delivery of products and services so that they can source, produce,
and deliver goods and services efficiently. SCM helps organizations achieve great
efficiencies by automating parts of these processes or by helping organizations rethink
and streamline these processes. SCM is important to a business because through its
efficiency it can coordinate, schedule, and control the delivery of products and services to
customers.

Business benefits include:

 Decide when and what to produce, store, and move
 Rapidly communicate orders
 Track the status of orders
 Check inventory availability and monitor inventory levels
 Reduce inventory, transportation, and warehousing costs
 Track shipments
 Plan production based on actual customer demand
 Rapidly communicate changes in product design

Define customer relationship management systems and describe how they benefit
businesses.

Customer relationship management systems enable a business to better manage its

relationships with existing and potential customers. With the growth of the Web,
potential customers can easily comparison shop for retail and wholesale goods and even
raw materials, so treating customers better has become very important.

Business benefits include:

 CRM systems provide information to coordinate all the business processes that deal
with customers in sales, marketing, and service to optimize revenue, customer
satisfaction, and customer retention. This information helps firms identify, attract,
and retain the most profitable customers; provide better service to existing
customers; and increase sales.
 CRM systems consolidate customer data from multiple sources and provide
analytical tools for answering questions such as: What is the value of a particular
customer to the firm over his/her lifetime?
 CRM tools integrate a business’s customer-related processes and consolidate
customer information from multiple communication channels, giving the customer a
consolidated view of the company.
 Detailed and accurate knowledge of customers and their preferences helps firms
increase the effectiveness of their marketing campaigns and provide higher-quality
customer service and support.

Describe the role of knowledge management systems in the enterprise.

Knowledge management systems enable organizations to better manage processes for
capturing and applying knowledge and expertise. These systems collect all relevant
knowledge and experience in the firm, and make it available wherever and whenever it is
needed to improve business processes and management decisions. They also link the firm
to external sources of knowledge.
 KMS support processes for acquiring, storing, distributing, and applying
knowledge, as well as processes for creating new knowledge and integrating it into
the organization.
 KMS include enterprise-wide systems for managing and distributing documents,
graphics, and other digital knowledge objects; systems for creating corporate
knowledge directories of employees with special areas of expertise; office systems
for distributing knowledge and information; and knowledge work systems to
facilitate knowledge creation.
 KMS use intelligent techniques that codify knowledge and experience for use by
other members of the organization and tools for knowledge discovery that recognize
patterns and important relationships in large pools of data.

List and describe the various types of collaboration and communication systems.

In an increasingly globalized economy, more jobs are becoming “interaction” jobs. These
kinds of jobs require face-to-face interaction with other employees, managers, vendors,
and customers. They require systems that allow the interaction workers to communicate,
collaborate and share ides. Enterprise-wide information systems businesses can use to
support interaction jobs include:
 Internet-based collaboration environments like Lotus Notes, Groove, and WebEx
provide online storage space for documents, team communications (separated from
e-mail), calendars, and audio-visual tools members can use to meet face-to-face.
 E-mail and Instant Messaging (IM) are reliable methods for communicating
whenever and wherever around the globe.
 Cell phones and wireless handhelds give professionals and other employees an easy
way to talk with one another, with customers and vendors, and with managers.
These devices have grown exponentially in sheer numbers and in applications
available.
 Social networking is no longer just “social.” Businesses are realizing the value of
providing easy ways for interaction workers to share ideas and collaborate with each
other.
 Wikis are ideal tools for storing and sharing company knowledge and insights.
They are often easier to use and cheaper than more proprietary knowledge
management systems. They also provide a more dynamic and current repository of
knowledge than other systems.
 Explain how intranets and extranets help firms integrate information and business
processes.

Because intranets and extranets share the same technology and software platforms as the
Internet, they are easy and inexpensive ways for companies to increase integration and
expedite the flow of information within the company (intranets alone) and with customers
and suppliers (extranets). They provide ways to distribute information and store
corporate policies, programs, and data. Both types of nets can be customized by users and
provide a single point of access to information from several different systems. Businesses
can connect the nets to transaction processing systems easily and quickly. Interfaces
between the nets and TPS, MIS, DSS, and ESS systems provide input and output for
users.

4.What is the difference between e-business, e-commerce, and e-government?

Distinguish between e-business and e-commerce.

E-business refers to the use of digital technology and the Internet to execute a firm’s
business processes. It includes internal business processes and processes for coordination
with suppliers, customers, business partners, and government regulators.

E-commerce is a narrower part of e-business dealing with the purchase and sale of goods
and services over the Internet, including support activities such as marketing and
customer support.

Define and describe e-government.

E-government refers to the application of the Internet and networking technologies to

digitally enable government and public sector agencies’ relationships with citizens,
businesses, and other governmental bodies.

5.What is the role of the information systems function in a business?

Describe how the information systems function supports a business.

The information systems departments is the formal organizational unit responsible for
information technology services. The information systems department is responsible for
maintaining the hardware, software, data storage, and networks that comprise the firm’s
IT infrastructure.
 Compare the roles played by programmers, systems analysts, information systems
managers, the chief information officer (CIO), chief security officer (CSO), chief
knowledge officer (CKO).

 Programmers are highly trained technical specialists who write the software
instructions for computers.
 Systems analysts constitute the principal liaisons between the information systems
groups and the rest of the organization. The systems analyst’s job is to translate
business problems and requirements into information requirements and systems.
 Information systems managers lead teams of programmers and analysts, project
managers, physical facility managers, telecommunications mangers, or database
specialists.
 Chief information officer (CIO) is a senior manager who oversees the use of
information technology in the firm.
 Chief security officer (CSO) is responsible for information systems security in the
firm and has the principle responsibility for enforcing the firm’s information
security policy. The CSO is responsible for educating and training users and IS
specialists about security, keeping management aware of security threats and
breakdowns, and maintaining the tools and policies chosen to implement security.
 Chief knowledge officer (CKO) helps design programs and systems to find new
sources of knowledge or to make better use of existing knowledge in organizational
and management processes.

Case Study

a). Go through the Case Study on page 80 (All Case Studies are available in your
textbook “Management Information Systems”).

b). Once you have completed the case study please answer all questions relating to the
case study, which are located at the end of each case study.

Air Canada Takes Off with Maintenix

Case Study Questions

1. What problems does Air Canada hope that Maintenix will solve?

Air Canada’s old legacy systems were not able to interact with one another or with the
finance and inventory systems. The inefficiencies of these systems were costing the
airline engineers’ time and money that could have been used on maintaining planes.

2. How does Maintenix improve operational efficiency and decision-making?

The Maintenix information system provides integrated, intelligent aviation maintenance,

repair, and operations software. That leads the way to enhanced visibility of fleet-wide
data, timelier decision making, support of Air Canada’s existing business model, and
increased operational efficiencies. The Maintenix system is accessible via the Web and
easy to deploy to all stations around the world. It reduces repetitive tasks and time
 chasing missing or incomplete information by allowing maintenance, engineering, and
finance divisions to easily share information. Wireless deployment also makes Maintenix
more effective, since aviation technicians, equipment, and parts are always on the move.

3. Give examples of three decisions supported by the Maintenix system. What

information do the Maintenix modules provide to support each of these decisions?

Three decisions supported by the Maintenix system may include:

 Is Part A compatible with Part B? The maintenance engineering module
establishes the configuration hierarchy, rules, and maintenance program that all of
the other modules depend upon. A company uses this module to describe
machinery components, part relationships and compatibility rules.
 Is a qualified technician located on site to perform necessary maintenance? The
line maintenance module matches a dynamic list of maintenance work
requirements against finite resources at various locations. The module allows a
company to ensure that qualified technicians are available before they schedule
maintenance.
 Are the right parts, in the right quantity, available on site for maintenance? The
materials management module ensures the minimum amount of each part is
always in inventory without causing engineers to be short on parts at any time.