Foundation of Information System in Business: Module - 01
Foundation of Information System in Business: Module - 01
Foundation of Information System in Business: Module - 01
Module -01
Ptd By Mr.Lokesh K N
Definition emphasizes
Organization wide information Decision support Managerial emphasis Computer based systems.
So basic knowledge of information system is almost becoming a generic skill needed by every professional.
Uses of IS
Gaining competitive advantage Balancing market strength Increasing market shares Acquire more attractive finance Introducing new products & services Loyal customers
Information
A collection of facts organized in such a way that they have additional value beyond the value of the facts themselves
Examples
Data thermometer readings of temperature taken every hour: 16.0, 17.0, 16.0, 18.5, 17.0,15.5.
Transformation
Types of Data
Data
Alphanumeric data Image data Audio data Video data
Represented by
Numbers, letters, and other characters Graphic images or pictures Sound, noise, tones Moving images or pictures
Data Information
Data
Transformation
Information
Information
Processed data, presented in a form which assists decision-makers Reduce uncertainty May provoke a manager to initiate action Data and Info relative concepts
Producer-consumer relationship
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Characteristics of Information
Timeliness: Information must reach the user in a timely manner, just when it is needed; not too early, not too late Appropriateness: Information must be relevant to the person who is using it. Accuracy: Accuracy costs. We don't always need 100% accurate information so long as we know the degree of accuracy it represents (eg: + or 5%). (Remember the value of information). Conciseness: Information should always contain the minimum amount of detail that is appropriate for the user. Too much detail causes information overload.
Frequency: Frequency is related to timeliness. How often the information required. Its frequency should be synchronized with the timing of the decision making of the user. Understandability: The format and presentation of information are very important. Complete: All the relevant parts are included. E.g. marketing data about household incomes may lead to bad decisions, if not accompanied by consumption habits of the target population. Current: Decisions are often based on the latest information available. Economical: The costs of gathering information should be justified by the overall benefits
System
A set of interconnected elements to achieve a common objective Elements are interrelated and interdependent Composed of sub-systems, which in turn may be made up of other subsystems The set of elements may be: Input(s), Process(es), or output(s)
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A system cannot exist in vacuum It exists and functions in an environment, separated by its boundary Open system: interacts with its environment, exchanges inputs and outputs Closed systems: do not interact, or exchange any inputs or outputs with its environment Info system converts data into information
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Information Systems
An information system(IS) is typically considered to be a set of interrelated elements or components that collect(input), manipulate(processes), and disseminate (output) data and information and provide a feedback mechanism to meet an objective.
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. 18
A Business as a System
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Organization Structure
Development of good information system call for deep understanding of the structure & dynamics of the organization. Organization is an arrangement of people in an institution based on concept of division of labour, authority, responsibility & decision making with the objective of attaining corporate goals. Mr. Anthony, a mgmt theorist classified organization management into 3 levels
Strategic Tactical operational
Operational level
Making routine day to day decisions Address well structured problem Information internal to the organization Processing of large data Primary attribute is efficiency
Tactical level
Decision taken by middle mgmt staff & have medium & long term impact E.g. performance analysis, budget analysis, vendor rating. Summarized organization wide information required ( both internal & external) Need is quality of information Less structured, flexible & critical data Mix of effectiveness & efficiency
Strategic level
Long term implication E.g. diversification, new plant location, tech acquisition, strategic alliance. Strategic decision enable organization to reach zenith of success or destruction Calls for unstructured, uncertain external information Information should be extremely adaptive, flexible & insightful.
IS Vs IT
INFORMATION TECHNOLOGY Hardware Software Databases are used to build INFORMATION SYSTEMS
Payroll System
Inventory System
Networks
Other related components
Marketing System
Support of its business processes and operations. Support of decision making by its employees and managers. Support of its strategies for competitive advantage.
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The IS Function
The IS function is
A major functional area of business An important contributor to operational efficiency, employee productivity, morale, customer service and satisfaction A major source of information and support for decision making A vital ingredient in developing competitive products and services in the global marketplace A key component of todays networked business
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Classification of IS
Information Systems
Expert System
2) Office automation systems automate office procedures and enhance office communications and productivity.
Expert Systems
are knowledge-based systems that provides expert advice and act as expert consultants to the users
MIS Characteristics:
System approach
Takes Comprehensive view in the light of its objective
Management oriented
Top down approach followed Derived from the overall business objectives
Need based
Caters to info needs at different levels
Exception based
Exception based reporting principle
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Futuristic
On the basis of projections
Integrated
Blends info from several operational areas
Central database
Let subsystems access the master data
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MIS Functions:
Data capturing Processing of data Storage Retrieval Dissemination of MI finished product of MIS
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