JANE ANN AUSTRIA

PRE 4: INFORMATION SYSTEMS OPERATIONS AND MAINTENANCE

CHAPTER 1: INFORMATION SYSTEMS

AN OVERVIEW

Why learn about Information Systems?

Dual IT and ACCOUNTING

-it improves business related

Everyone should know even the basic one

It is important to what is IS

-everything we do is through online

-try to have work

Information System is a higher process (efficient)

DATA, INFORMATION AND KNOWLEDGE

DATA

Facts and figures which relay something specific, but which are not organized in any way and which
provide no further information regarding patterns, context, etc.

Data consists of raw facts.

Are data and information are the same?

Data are raw facts

-conduct research by using survey questionnaire (the answers are the data)

-data are raw and not yet organized

TYPES OF DATA

ALPHANUMERIC DATA - numbers, letters, and other characters

IMAGE DATA - graphic images and pictures (jpeg, gif)

AUDIO DATA – sound, noise, or tones (recording, mp3, ringtones)

VIDEO DATA - moving images or pictures (mp4, mov)

INFORMATION

Information is a collection of data organized and processed so that it has additional value beyond the
value of the individual facts.

Eg. Survey form

Convert the data to useful information (organized)

PROCESS

Turning data into information (summarizing/categorized- get the most important data note: not all data
are important)

A set of logically related tasks performed to achieve a defined outcome

The process of defining relationships among data to create useful information requires KNOWLEDGE

Knowledge

-awareness/understanding to an information given to you

-information get through experiences in life

Interpretation / context / reading materials

THE VALUE OF INFORMATION

Is information valuable? – depends on the information

-all information should be treated valuable because it will affect all the process if there is any mistake

-you cannot make right decision without the information

CHARACTERISTICS OF QUALITY OF QUALITY INFORMATION

 Accessible - only authorized person who have access

 Accurate
 Complete
 Economical – budget (the cost in order to gather information)
 Flexible – accommodate a certain amount of variation (various purposes eg ID)
  Relevant – only relevant information(FS need all transaction every moth)
 Reliable – credible sources / trusted information
 Secure – putting a password (not easy)
 Simple – simple context – should be understandable and must not be complex
 Timely
 Verifiable – it should be exact (research paper- as much as possible more sources)

SYSTEM

A system is a set of elements or components that interact to accomplish goals.

-it is a computerized application

-its objective is to accomplish the goal

-make work easier and faster

-input, process, output and feedback

WHAT IS AN INFORMATION SYSTEM?

An information system (IS) is a set of interrelated components that collect, manipulate, store, and
disseminate data and information and provide a feedback mechanism to meet an objective.

An information system provides a feedback mechanism to monitor and control its operation to make
sure it continuous to meet its goal and objectives.

DIFFERENT COMPONENTS OF INFORMATION SYSTEM

 Input – the activity of gathering and capturing raw data. (raw data from interview or survey)
 Processing – converting or transforming data into useful outputs (transform into a useful
information)
 Output – production of useful information, usually in the form of documents and reports
(hardcopy/softcopy)
 Feedback – information from the system that is used to make changes to input or processing
activities (rate/feedback of the product)

THE SIX MAJOR ROLES OF INFORMATION SYSTEMS

1. MANAGING OPERATIONS
Every successful organization must excel at operations management, which involves the design,
operation, and improvement of the systems and processes the organization, uses to deliver its goods
and services. (Supervising, organizing to produce a good service to your client)

2. SUPPORTING CUSTOMER INTERACTIONS

Interactions with customers, clients, students, patients, taxpayers, citizens, and others who come to
your organization desiring a product or service are fundamental to success.

Customer Relationship Management (CRM) systems, build and maintain relationships and support all
the processes that underlie them.

3. MAKING DECISIONS

Business intelligence refers to all the information managers use to make decisions, and it can come from
many sources beyond the organization’s own information systems. (major role)

4. COLLABORATING ON TEAMS

Collaboration and teamwork have considerable support from innovative information systems that allow
people to work together at any time and from any place.

Social networking sites support online communities of people who create profiles for themselves, form
ties with others with whom they share interests, and make new connections based on those ties.

5. GAINING COMPETITIVE ADVANTAGE

Competitive advantage, which is anything that gives a firm a lead over its rivals, van be gained through
the development and application of innovative information systems.

6. IMPROVING INDIVIDUAL PRDUCTIVITY

Tools to help people improve their own productivity abound, from the smartphones that combine voice
calls with web browsing, contact databases, email, music, and games, to the many software applications
that eliminate tedious work.

MAJOR CAPABILITIES OF INFORMATION SYSTEMS

 Perform high-speed, high-volume numerical computations

 Provide fast, accurate communication and collaboration within and among organizations
 Store huge amount of information in a small, easy-to access space
 Allow quick and inexpensive access to vast amounts of information worldwide
 Interpret vast amounts of data quickly and efficiently
 Increase the effectiveness and efficiency of people working in groups in one place or in several
locations anywhere
  Automate both semiautomatic

CHAPTER 2: COMPUTER BASED INFORMATION SYSTEM AND BUSINESS INFORMATION SYSTEM

A Computer-based information system (CBIS) is a single set of hardware, software, databases, networks,
people, and procedures that are configured to collect, manipulate, store, and process data into
information.

CBIS – AUTOMATED

 TRING TO AUTOMATE ALL MANUAL. USE SOFTWARE

BIS – USED IN BUSINESS

6 COMPONENTS OF COMPUTER BASED INFORMATION SYSTEM (CBIS)

HARDWARE – consist of computer equipment used to perform input, processing, storage, and output
activities. (Physical component / tangible things)

4 categories of hardware

 INPUT- used to input data (eg. keyboard)

 PROCESSING – inside the computer (computer chip) eg. Central Processing Unit, Arithmetic-Logic
Unit, Memory Unit
 STORAGE – built-in
2types –
Primary – eg laptop – RAM and ROM
Secondary – SSD and HDD
 OUTPUT – who received data and turn into an output

SOFTWARE – consists of the computer programs that govern the operation of the computer. There are
two primary types of software.

-a program / different instructions

2 types of software

 SYSTEM SOFTWARE – master control of operating system (OS) eg. Android, IOS, Windows10,
Chrome OS
 APPLICATION SOFTWARE – these are apps we commonly used. Eg. Word processing, Excel,
Powerpoint, games and even social media

DATABASE – is an organized collection of facts and information, typically consisting of two or more
related data files.
-also known as ‘storage’

-a system used by a programmer (eg. Microsoft access)

TELECOMMUNICATIONS – is the electronic transmission of signals for communications, which enables

organizations to carry out their processes and tasks through effective computer networks.

NETWORKS – connect computers and equipment in a building, around the country, or around the
country, or around the world to enable electronic communications. (connect computers inside the
company)

LAN – local area network (1 room)

MAN – metropolitan area network (larger area)

WAN – wide area network (1 building to another / 1 location to another)

GAN – global area network (1 country to another)

INTERNET – is the world’s largest computer network, consisting of thousands of interconnected

networks, all freely exchanging information.

-in order for us to connect we use TCP/IP (transmission control protocol / internet protocol)

A CLOUD COMPUTING environment in which software and data storage are provided by the Internet
(“the cloud”); the services are run on another organization’s computer hardware amd both software and
data are easily accessed.

WORLD WIDE WEB (WWW) – or the web, is a network of links on the Internet to documents containing
text, graphics, videos, and sound. (Uniform Resource Locator – URL )

The technology used to create the Internet is also being applied within organizations to create intranets,
which allow people in an organization to exchange information and work on projects. (for private
purposes)

An extranet is a network based on Web technologies that allows selected outsiders, such as business
partners and customers, to access authorized resources of a company’s intranet.

People make the difference between success and failure in all organizations. (important element,
incharge of the operation.)

A procedure defines the steps to follow to achieve a specific and result, such as enter a customer order,
pay a supplier invoice, or request a current inventory report. (to have a final output)
BUSINESS INFORMATION SYSTEMS

- Used by a business companies

ELECTRONIC COMMERCE (e-commerce) involves any business transaction executed electronically

between companies

(business-to-business, or B2B), (business-to-consumer, or B2C), (consumer-to-consumer, C2C)

MOBILE COMMERCE (m-commerce) is the use of mobile, wireless devices to place orders and conduct
business. M-commerce relies on wireless communications that managers and corporations use to place
orders and conduct business with handheld computers, portable phones, laptop computers connected
to a network, and other mobile devices.

 TRANSACTION PROCESSING SYSTEMS (TPS) – is an organized collection of people, procedures,

software, databases, and devices used to perform and record business transactions. If you
understand a transaction processing system, you understand basic business operations and
functions.

ENTERPRISE SYSTEMS – help organizations perform and integrate important tasks, such as paying
employees and suppliers, controlling inventory, sending invoices, and ordering supplies. (Involves many
people)

 ENTERPRISE RESOURCE PLANNING - an ERP system is a set of integrated programs that

manages the vital business operations for an entire multisite, global organization.

INFORMATION AND DECISION SUPPORT SYSTEMS

MANAGEMENT INFORMATION SYSTEMS

- MIS is an organized collection of people, procedures, software, databases, and devices that
provides routine information to managers and decision makers.
(manage all data , incharge with the hardware and software , to make efficient decision)

DECISION SUPPORT SYSTEMS

- DSS is an organized collection of people, procedures, software, database, and devices that
support problem-specific decision making. The focus of a DSS is on making effective decisions.
(to make effective decision , help the org to make the right things based on MIS)

SPECIALIZED BUSINESS INFORMATION SYSTEMS

-customized for one company

-not a typical IS

Artificial Intelligence – allows computers to beat human champions in games, helps doctors make
medical diagnoses, and enables cars to drive hundreds of miles without a human behind the wheel.

(using AI does not with a simple program)

-AI tries to mimic a human in a form of robots

-majority of the machines use AI

-more upgraded IS

-makes work even faster

Major branches of Artificial Intelligence

 Robotics – is an area of artificial intelligence in which machines take over complex, dangerous,
routine, or boring task, such as welding car frames or moving pallets of products around in a
warehouse. Industries are turning to the use of robots to increase production and quality while
decreasing waste and costs.
 Vision Systems – allow robots and other devices to “see”, store, and process visual images.
 Natural Language Processing – involves the computer understanding, analyzing, manipulating
and/or generating natural languages. It encompasses three main application areas: speech,
dialogue, extraction of information
 Learning Systems – allow computers to learn from past mistakes or experiences, such as playing
games or making business decisions. (Application in games, learn from experience)
 Neural – networks allow computers to recognize and act on patterns or trends. Some successful
stock, options, and futures traders use neural networks to spot trends and improve the
profitability of their investments. (uses algorithm- can predict next move. Have lots of patterns.
Gather lots of data)
 Expert systems – give the computer the ability to make suggestions and function like an expert
in a particular field, helping enhance the performance of the novice user. (a complex design,
better decision and enhance the performance)

VIRTUAL REALITY AND MULTIMEDIA

 Virtual Reality (VR) – is an artificial three-dimensional environment created by hardware and

software and experienced through sensory stimuli (primarily sight and sound, but sometimes
 through touch, taste, and smell) and within which is an individual can interact to affect what
happens in the environment. (near to reality, experience real environment but in reality it
doesn’t exist)
 Augmented Reality (AR) – is a form of virtual reality that has the potential to superimpose digital
data over real photos or images. (eg. Pokemon go)
 Multimedia – is a natural extension of virtual reality. It can include photos and images, the
manipulation of sound and special 3D effects. (eg. Disney movies, field of architecture they are
using autodesk and 3d software)

ENTERPRISE SYSTEM

An enterprise system is central to an organization and ensures that information can be shared
across all business functions and all levels of management to support the running and managing of a
business. (-used to track or control. – can monitor complex operation. – enterprise resource planning ERP
– used by a company, came within a package)

CATEGORIES / TYPES OF ENTERPRISE SYSTEM

 TRANSACTION PROCESSING SYSTEMS (TPSs)- monitor, collect, store, and process data generated
from all business transactions. (it is a process that happens inside the company/business. –
modifying data transaction. – way to gather data)

TRANSACTION – is any business event that generates data worthy of being captured and stored
in a database. (two or more entities that exchange product or services)

TWO WAYS OF TPS

BATCH PROCESSING OR ONLINE PROCESSING

With BATCH PROCESSING SYSTEMS, business transactions are accumulated over a period of time and
prepared for processing as a single unit or batch. (a collection of data and try to process them by batch /
isahan)

With ONLINE TRANSACTION PROCESSING (OLTP), each transaction is processed immediately, without
the delay of accumulating transactions into a batch. (it provides output instantly. – automatic process)
TPS SPECIFIC OBJECTIVES

 Capture, process, and update databases

 Ensure that the data is processed accurately and completely
 Avoid processing fraudulent transactions
 Produce timely user responses and reports
 Reduce clerical and other labor requirements
 Help improve customer service
 Achieve competitive advantage

A TPS TYPES OF SYSTEMS:

 Order processing systems (OPS) – requires efficient and reliable data. The lifeblood of the
organization. This is how you get product or services online.
 Accounting systems (AS) – deals with financial transactions, cashflows of a company.
 Purchasing systems (PS) – how you acquire certain materials that need to have receipt. Talks
about inventory, receivables, and accounts payable.

TPS FOR SMEs

VENDOR SOFTWARE TYPE OF TPS OFFERED TARGET CUSTOMERS

 AccuFund AccuFund Financial reporting and Nonprofit, municipal,
accounting and government
organizations.

OpenPro OpenPro Complete ERP solution Manufacturers,

including financials, distributors, and
supply chain retailers.
management, e-
commerce, customer
relationship
management, and retail
POS system

Intuit QuickBooks Financial reporting and Manufacturers,

accounting professional services,
contractors, nonprofits,
and retailers

Sage Timberline Financial reporting, Contractors, real estate

accounting, and developers, and
operations residential builders

Redwing TurningPoint Financial reporting and Professional services,

accounting banks, and retailers.

TRANSACTION PROCESSING ACTIVITIES

1. Data Collection – gathering, capturing, and collecting data that you need

2. Data Editing – either to update or check if your data are complete. - edit transactions or input that
needs to be updated. Tries to validate data.

3. Data Correction – TPS gives error message. – deleting transaction is not allowed.

4. Data Manipulation – depends on the system / working under the system. – organizing / summarizing /
calculation / classifying / storing data. – major activity in TPS

5. Data Storage – try to keep or save data in a particular storage. –involves ordering records.

6. Document Production and Reports – production and repots. – involve generating output.
CONTROL AND MANAGEMENT ISSUES

The Disaster recovery Plan (DRP) is a firm’s strategy to recover data, technology, and tools that support
critical information systems and necessary information systems components such as the network,
databases, hardware, software, and operating systems.

Transaction Processing System Audit

A transaction processing system audit attempts to answer four basic questions:

1. Does the system meet the business need for which it was implemented?

2. What procedures and controls have been established?

3. Are these procedures and controls being used properly?

4. Are the information systems and procedures producing accurate and honest reports?

INFORMATION SYSTEMS FOR ACCOUNTING AND FINANCE

1. Financial Planning and Budgeting.

 Financial and Economic Forecasting

 Budgeting

2. Managing Financial Transactions

 Global Stock Exchanges

 Managing Multiple Currencies

 Virtual Close

 Expense Management Automation

3. Investment Management

4. Control and Auditing

Budgetary control

Auditing

Financial ratio analysis

INFORMATION SYSTEMS FOR MARKETING

INFORMATION SYSTEMS FOR PRODUCTION/OPERATIONS MANAGEMENT]

1. In-House Logistics and Materials Management.

Inventory Management.

Quality Control.

2. Planning Production and Operations.

POM planning has evolved from:

material requirements planning (MRP),

to manufacturing resource planning (MRP II),

to enterprise resource planning (ERP).

Economic order quantity (EOQ) approach are designed for those individual items for which demand is
completely independent.

The planning process that integrates production, purchasing, and inventory management of
interdependent items is called material requirements planning (MRP). MRP deals only with production
scheduling and inventories.
More complex planning also involves allocating related resources (e.g., money and labor). In such a case,
more complex, integrated software, called manufacturing resource planning (MRP II),

3. Computer-Integrated Manufacturing.

Computer-integrated manufacturing (CIM; also called digital manufacturing) is an approach that

integrates various automated factory systems. CIM has three basic goals:

(1) to simplify all manufacturing technologies and techniques,

(2) to automate as many of the manufacturing processes as possible, and

(3) to integrate and coordinate all aspects of design, manufacturing, and related functions via computer
systems.

4. Product Life Cycle Management.

Product life cycle management (PLM) is a business strategy that enables manufacturers to share
product- related data to support product design and development and supply chain operations.

INFORMATION SYSTEMS FOR HUMAN RESOURCE MANAGEMENT

1. Recruitment

2. Human Resources Maintenance and Development

3. Human Resources Planning and Management

Payroll and employees’ records

Benefits administration

Employee relationship management

Accounting and Finance

Financial planning availability and cost of money

Budgeting allocates financial resources among participants and

activities

Capital budgeting financing of asset acquisitions

Managing financial

transactions

Handling multiple currencies

Virtual close ability to close books at any time on short notice

Investment management managing organizational investments in stocks, bonds,

real estate, and other investment vehicles

Budgetary control monitoring expenditures and comparing against budget

Auditing ensuring the accuracy and condition of financial health of

organization Payroll

Marketing and Sales

Customer relations know who customers are and treat them like
royalty

Customer profiles and preferences

Sales force automation using software to automate the business tasks of

sales, thereby improving the productivity of
salespeople

Production/Operations and Logistics

Inventory management how much inventory to order, how much

inventory to keep, and when to order new
 inventory

Quality control controlling for defects in incoming material and

defects in goods produced

Materials requirements planning planning process that integrates production,

purchasing, and inventory management of
interdependent items (MRP)

Manufacturing resource planning planning process that integrates an enterprise’s

production, inventory management, purchasing,
financing, and labor activities (MRP II)

Just-in-time systems principle of production and inventory control in

which materials and parts arrive precisely when
and where needed for production (JIT)

Computer-integrated manufacturing manufacturing approach that integrates several

computerized systems, such as computer-assisted
design (CAD), computer-assisted manufacturing
(CAM), MRP, and JIT

Product life cycle management business strategy that enables manufacturers to

collaborate on product design and development
efforts, using the Web

Human Resource Management

Recruitment finding employees, testing them, and deciding

which ones to hire

Performance evaluation periodic evaluation by superiors

Training

Employee records
 Benefits administration medical, retirement, disability, unemployment,
etc.

FUNCTIONAL AREA INFORMATION SYSTEMS REPORTS

1. Routine reports

2. Ad-hoc reports

 Drill-down reports

 Key-indicator reports

 Comparative reports

Exception reports.

Exception reports include only information that falls outside certain threshold standards. To
implement management by exception, management first creates performance standards.

AN OVERVIEW OF ENTERPRISE RESOURCE PLANNING

(recap of ERP – ERP is what we call in a form of module that comes into package and easy to access.
Known as Core software – common used by a company for more departments. Also helps business to
manage wide business process.)

(Using common database- you can share / manage reports)

(business process – commonly used by a group in achieving the goal.)

Advantages of ERP

1. Improved Access to Data for Operational Decision Making. (easy to access as long as they gave you
permission)

2. Elimination of Costly, Inflexible Legacy Systems (separate system- only one software)

3. Improvement of Work Processes. (using only one system)

4. Upgrade of Technology Infrastructure (Upgrade hardware)

Disadvantages of ERP Systems

1. Expense and Time in Implementation

2. Difficulty Implementing Change (because of the old employees)

3. Difficulty Integrating with Other Systems (because of the outdated devices and old system are not
compatible)

4. Risks in Using One Vendor

5. Risk of Implementation Failure (covers everything)

ERP FOR SMALL AND MEDIUM-SIZE ENTERPRISES (SMES) (open source- you can download them and
use them )

Vendor ERP Solutions

Apache Open for Business ERP

Compiere Compiere Open Source ERP

Openbravo Openbravo Open Source ERP

WebERP WebERP

Business intelligence (BI)

Involves gathering enough of the right information in a timely manner and usable form and analyzing it
to shine a spotlight on the organization’s performance.

(BI- an upgraded one. –have a strategy to make the right decision)

(open source solution – SAP, IBM, ORACLE)

PRODUCTION AND SUPPLY CHAIN MANAGEMENT

(Production- raw to finish goods)

(Supply chain management – monitor the flow of goods and services. Try to manage the flow which
include from raw material to finish goods)

Three main flow of supply chain management

 Product flow – the product itself

 Information flow – involves updating status of the clients. All information from transmission
to receiving by the clients
 Fiancés flow – payments such as credit cards, cash payments, and installments

Four element of supply chain management

 Integration – responsible for all things happen on time. It should be pasok sa budget and not
sacrificing one part
 Operation – it coordinate specific day-to-day. Keep an eye on the inventory
 Purchasing – it tries to keep an eye on the budget. Raw materials
 Distribution – talks about logistic deliveries. Shipment of the product

Sales Forecasting (estimate the future sales of the company)

1. Sales and operations plan (S&OP) (tactical plan – helps to manage and allocate the needs of the client
or customers)

2. Demand management - (trying to estimate the goods we can offer to our customer)

3. Detailed scheduling – (a process of detailed schedule of the production. There are some products that
need a long time in production)

4. Materials requirement (lead time – try to order from the supplier)

5. Purchasing (how you acquire from your raw materials)

6. Production (plans on how to produce the product)

Customer Relationship Management

A customer relationship management (CRM) system helps a company manage all aspects of customer
encounters, including marketing and advertising, sales, customer service after the sale, and programs to
keep and retain loyal customers.
(it is a software that tries to manage all aspects of the customer and try to meet the needs of the
customers loyalty)

The key features of a CRM system include the following:

1. Contact Management (tracking customer)

2. Sales Management (monitor or ability t organize and categorize the product demand)

3. Customer Support (customer service – attending request)

4. Marketing Automation (it has the ability to capture or gather the response of the customers /
customer feedback)

5. Analysis (ability to analyze customers. Ways to increase revenue / cost)

SALES ORDERING (tries to record the customers order)

Sales ordering is the set of activities that must be performed to capture a customer sales order.

Financial and Managerial Accounting

The general ledger is the main accounting record of a business. It is often divided into different
categories, including assets, liabilities, revenue, expenses, and equity.

(general ledger – summarize form)

(subsidiary ledger – detailed data or transaction coming from general ledger. AP, AR)

INTERNATIONAL ISSUES ASSOCIATED WITH ENTERPRISE SYSTEMS

 Different Languages and Cultures

 Disparities in Information System Infrastructure. (some country has a huge development in IS)

 Varying Laws and Customs Rules (different laws)

 Multiple Currencies. (always check the value of the currency)