Information System Primary Purpose

Collects data, processes it into information then converts

information into knowledge for a specific purpose.

Data
Elementary description of things, events, activities, and transactions
that are recorded, classified, and stored, but not organized to convey
any specific meeting
Information
Data that has been organized so that they have meaning and value to
the recipient
Knowledge
Information that has been organized and processed to convey
understanding, experience and expertise as they apply to a current
problem or activity
 Information System Classification By
Organizational Structure
An information system (IS) can span departments, business
units and corporations. Unix
PC PC

Enterprise
Server

PC
Hub

Departmental IS Serial Terminals

In-house operations

Mux Thin

Enterprise-Wide IS
Client

Thin

Inter-Organizational IS Client

DIALUP/T1/T3/ISDN/FRAME RELAY

Information systems are

DIALUP/T1/T3/ISDN/FRAME RELAY
Mux

usually connected by means of

Thin Client
PC
Mux

electronic networks Appliance

Thin Client
PC

Appliance Appliance
Unix Server
Enterprise Store 3
Server Appliance
On-line Multi-station Store Server
Store 3
Store Location 1
On-line Multi-station Store

Store Location 2
 Information System - Classification By
Function (Department)
An information system (IS) support each department in a
corporation.

Point-of-Sale (POS)
Operations
Accounting
Finance
Marketing
Human resources

Transaction Processing Systems (TPS): Automates routine

and repetitive tasks that are critical to the operation of the
organization
Information System - Classification By
Function (Department)
An information system (IS) support each department in a
corporation.
Information System - Classification By
Support Function
5-year sales trend
Profit Planning
5-year budget forecasting
Senior Mgr Product development
Executive Support System

Sales Management
Inventory Control
Management Information System Annual budget
Decision Support System Production Scheduling
Middle Managers Cost Analysis
Intelligent Support Systems Pricing Analysis

Simulation
Pgm coding
Knowledge Management System System support
Word Processing
Data Workers
Office Automation System Desktop Publishing

Order Processing
Fulfillment
Material Movement
Transaction Processing System Operational Managers A/R, A/P, GL
Payroll
POS
 Transaction Processing System (TPS)

TPS automates routine and repetitive tasks that are

critical to the operation of the organization, such as
preparing a payroll, billing customers, Point-of-Sale and
Warehouse operations.
Data collected from this operation supports the MIS and
DSS systems employed by Middle Management
Computerizes the primary and most of the secondary
activities on the Value Chain.
Primary purpose to perform transactions and collect data.
Management Information Systems (MIS)

These systems access, organize, summarize, and

displayed information for supporting routine decision
making in the functional areas. Geared toward middle
managers, MIS are characterized mainly by their ability
to produce periodic reports such as a daily list of
employees and the hours they work, or a monthly report
of expenses as compared to a budget
Typical uses would be in Replenishment, Pricing Analysis
(Markdowns) and Sales Management
Decisions supported are more structured.
Primary purpose to process data into information
Decision Support Systems (DSS)
These systems support complex non-routine decisions.
Primary purpose to process data into information
DSS systems are typically employed by tactical level
management whose decisions and what-if analysis are less
structured.
This information system not only presents the results but also
expands the information with alternatives.
Some DSS methodologies
Mathematical Modeling
Simulation
Queries
What-If (OLAP-Cubes)
Datamining
 Intelligent Support Systems (ISS)
Essentially, artificial intelligence (AI) these systems perform
intelligent problem solving.
One application of AI is expert systems. Expert systems (ESs)
provide the stored knowledge of experts to nonexperts, so the latter
can solve difficult or time-consuming problems. These advisory
systems differ from TPS, which centered on data, and from MIS and
DSS, which concentrated on processing information. With DSS,
users make their decisions according to the information generated
from the systems. With ES, the system makes recommended
decisions for the users based on the built-in expertise and knowledge.
 Executive Support Systems (ESS)
ESS systems or Enterprise Information Systems (EIS) originally were
implemented to support Senior management. These systems have been expanded
to support other managers within the enterprise.
At the senior management level they support Strategic activities which deal with
situations that significantly may change the manner in which business is done.
 Office Automation Systems (OAS)
Electronic communication is only one aspect of what is now known
as an office automation system (OAS). Other aspects include word
processing systems, document management systems and desktop
publishing systems.
OAS systems are predominantly used by clerical workers who
support managers at all levels. Among clerical workers, those who
use, manipulate, or disseminate information are referred to as data
workers.
Knowledge Management Systems (KMS)

An additional level of staff support now exists between top and

middle management. These are professional people, such as
financial and marketing analysts that act as advisors and assistants
to both top and middle management. They are responsible for
finding or developing new knowledge (External Content) for the
organization and integrating it with existing knowledge (Internal
Content).
KMS that support these knowledge workers range from Internet
search engines and expert systems, to Web-based computer-aided
design and sophisticated data management systems
People in organizations


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129

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Stakeholder)
Niche
Expand the Scope to Include External Environments

A supply chain is a concept describing the flow of materials,

information, money, and services from raw material suppliers
through factories and warehouses to the end customers.

Upstream supply chain

Components of the Supply Chain

includes the organizations first-tier suppliers and their

suppliers
Internal supply chain
includes all the processes used by an organization in
transforming the inputs of the suppliers to outputs
Downstream supply chain
includes all the processes involved in delivering the
products to final customers
Inter-Organizational Systems (IOS)
IOS are systems that connect two or more organizations. These systems are
common among business partners and play a major role in e-commerce, as well
as in supply chain management support.
The first type of IT system that was developed in the 1980s to improve
communications with business partners was electronic data interchange
(EDI), which involved computer-to-computer direct communication of
standard business documents (such as purchase orders and order confirmations)
between business partners. These systems became the basis for electronic
markets, that later developed to electronic commerce.
Web-based systems (many using XML) deliver business applications via the
Internet. Using browsers and the Internet, people in different organizations
communicate, collaborate, access vast amounts of information, and run most of
the organizations tasks and processes.
Inter-Organizational Systems (IOS)

Two or more organizations

 Information Infrastructure
Hardware
Software
Networks & communication
facilities
Information Systems
Databases
Function
IS personnel
Information Architecture Classified by
Hardware
A common way to classify information architecture is by
computing paradigms, which are the core of the architecture.

Mainframe Environment
PC Environment
PC-LAN Environment
Distributed Computing Environment
Client/server Environment
Enterprise-wide Computing Environment
Legacy systems
 The Web Based IT Architectures
Web-based systems refer to those applications or services that are
resident on a server that is accessible using a Web browser. The
only client-side software needed to access and execute these
applications is a Web browser environment.

The Internet Electronic Storefronts

Intranets Electronic Markets
Extranets Electronic Exchanges
Corporate Portals M-Commerce
E-commerce Systems Enterprise Web
 The Internet
Sometimes called simply the Net, the Internet is a
worldwide system of computer networksa network of
networks hence Internet, in which users at any one
computer can get information from any other computer
The Internet uses a portion of the total resources of the
currently existing public telecommunication networks.
Technically, what distinguishes the Internet is its use of a
set of protocols called TCP/IP (Transmission Control
Protocol/Internet Protocol).
 Intranets
An intranet is the use of Web technologies to create a
private network, usually within one enterprise.
It is typically a complete LAN, or several intra-
connected LANs
Intranets are used for:
work-group activities
the distributed sharing of projects within the enterprise
Controlled access to company financial documents
use of knowledge management, research materials, online training, and
other information that requires distribution within the enterprise.
 Extranets
Connect several intranets via the Internet, by adding a
security mechanism and some additional functionalities
They form a larger virtual network that allows remote
users (such as business partners or mobile employees) to securely
connect over the Internet to the enterprises main
intranet.
Extranets are also employed by two or more enterprises
(suppliers & buyers) to share information in a controlled
fashion, and therefore they play a major role in the
development of business-to-business electronic
commerce and Supply Chain systems.
 Corporate Portals
Web sites that provide the gateway to corporate information from a
single point of access. They aggregate information and content from
many files and present it to the user.
Corporate portals also are used to personalize information for
individual customers and for employees.
Intranets and Extranets are usually combined with and accessed via a
corporate portal
 E-commerce Systems
Web-based systems that enable business transactions to
be conducted seamlessly twenty-four hours a day, seven
days a week
Some classifications of E-commerce systems are:
B2C (Business to Consumer)
B2B (Business to Business)
B2E (Business to Employee)
The major components of Web-based EC are:
Electronic storefronts
Electronic markets
Mobile commerce
 Electronic Storefronts
These are Web-equivalents of a physical store. Through the
electronic storefront, an e-business can display and/or sell its
products.
The storefront may include electronic catalogs that contain
descriptions, graphics, and possibly product reviews.
They have following common features and functions:
an E-catalog
a shopping cart
a checkout mechanism
a payment processing feature
a back office order fulfillment system
 Electronic Markets
Is a web-based network of interactions and relationships over
which information, products, services, and payments are
exchanged. It is equivalent to a physical marketplace except is
Web-based.
The principal participants in marketplaces are: transaction
handlers, buyers, brokers, and sellers.
The means of interconnection vary among parties and can change
from event to event, even between the same parties. Electronic
markets can reside in one company, where there is either one
seller and many buyers, or one buyer and many sellers. These are
referred to as private marketplaces.
 Electronic Exchanges
A special form of electronic markets electronic exchanges, are Web-
based public marketplaces where many buyers and many sellers
interact dynamically.
Originally set as trading places for commodities, electronic
exchanges have emerged for all kinds of products and services
 M-Commerce Mobile Computing
M-commerce or Mobile commerce is commerce (buying
and selling of goods and services) in a wireless environment,
such as through wireless devices like cellular telephones
and PDAs.
M-commerce enables users to access the Internet
without needing to find a place to plug in their device.
As this wireless environment expands, a pervasive
computing environment will develop, employed by
mobile employees and others, will change the way
business is transacted.
 Enterprise Web
Is an open environment for managing and delivering
Web applications. It combines services from different
vendors in a technology layer that spans rival platforms
and business systems, creating a foundation for building
applications at a lower cost.
Applications, including business integration,
collaboration, content management, identity
management, and search, which work together via
integrating technologies.
The result is an environment that spans the entire
enterprise.
Emerging Computing Environments
Utility Computing is computing that is as available, reliable, and secure as electricity, water
services, and telephony. The vision behind utility computing is to have computing resources
flow like electricity on demand from virtual utilities around the globealways on and highly
available, secure, efficiently metered, priced on a pay-as-you-use basis, dynamically scaled, self-
healing, and easy to manage.
Subscription Computing is a form of utility computing that puts the pieces of a computing
platform together as services, rather than as a collection of separately purchased components.
Grid Computing employs networked systems to harness the unused processing cycles of all
computers in that given network thus creating powerful computing capabilities. Grid computing
is already in limited use, for example the well-known grid-computing project SETI (Search for
Extraterrestrial Intelligence) @Home project. In this project, PC users worldwide donate unused
processor cycles to help the search for signs of extraterrestrial life by analyzing signals coming
from outer space.
Pervasive Computing, a future in which computation becomes part of the environment.
Computation will be embedded in things, not in computers.
Web services are self-contained, self-describing business and consumer modular applications,
delivered via the Internet, that users can select and combine through almost any device, ranging
from PC to mobile phones.
 Managing Information Systems
Information Systems (IS) have enormous strategic value so when they
are not working even for a short time, an organization cannot function.
Furthermore, the Life Cycle Costs (acquisition, operation, security, and
maintenance) of these systems is considerable. Therefore, it is essential
to manage them properly. The planning, organizing, implementing,
operating, and controlling of the infrastructures and the organizations
portfolio of applications must be done with great skill.
The responsibility for the management of information resources is
divided between two organizational entities:
The information systems department (ISD), which is a corporate
entity
the end users, who are scattered throughout the organization.
 MANAGERIAL ISSUES
The transition to e-business. Converting an organization to a networked-computing-based e-business
may be a complicated process. The e-business requires a client/ server architecture, an intranet, an
Internet connection, and e-commerce policy and strategy, all in the face of many unknowns and risks.
However, in many organizations this potentially painful conversion may be the only way to succeed or
even to survive. When to do it, how to do it, what the role of the enabling information technologies
will be, and what the impacts will be of such a conversion are major issues for organizations to
consider.
From legacy systems to client/server to intranets, corporate portals, and Web-based systems. A
related major issue is whether and when and how to move from the legacy systems to a Web-based
client/server enterprise-wide architecture. While the general trend is toward Web-based client/server,
there have been several unsuccessful transformations, and many unresolved issues regarding the
implementation of these systems. The introduction of intranets seems to be much easier than that of
other client/server applications. Yet, moving to any new architecture requires new infrastructure and a
decision about what to do with the legacy systems, which may have a considerable impact on people,
quality of work, and budget. A major aspect is the introduction of wireless infrastructure.
How to deal with the outsourcing and utility computing trends.
As opportunities for outsourcing (e.g., ASPs) are becoming cheaper, available, and viable, the concept
becomes more attractive. In the not-so-distant future, we will see outsourcing in the form of utility
computing. How much to outsource is a major managerial issue.
 MANAGERIAL ISSUES Continued
How much infrastructure? Justifying information system applications is not an easy job due to the
intangible benefits and the rapid changes in technologies that often make systems obsolete. Justifying
infrastructure is even more difficult since many users and applications share the infrastructure that will
be used for several years in the future. This makes it almost impossible to quantify the benefits. Basic
architecture is a necessity, but there are some options.
The roles of the ISD and end users. The role of the ISD can be extremely important, yet top
management frequently mistreats it. By constraining the ISD to technical duties, top management may
jeopardize an organizations entire future. However, it is not economically feasible for the ISD to
develop and manage all IT applications in an organization. End users play an important role in IT
development and management. The end users know best what their information needs are and to what
degree they are fulfilled. Properly managed end-user computing is essential for the betterment of all
organizations.
Ethical issues. Systems developed by the ISD and maintained by end users may introduce some ethical
issues. The ISDs major objective should be to build efficient and effective systems. But, such systems
may invade the privacy of the users or create advantages for certain individuals at the expense of others.