Management

Information Systems
Foundation Concepts
Information Systems in Business
 Information System
•BBSM Point of Sales system
•IMS Software Pvt. Ltd.
•online and onsite Movie Ticket booking systems
•online hotel and travel ticket reservation

•FACT accounting solution

•Tally accounting solution
•PUMORI core banking system software
•FINACLE core banking system software
•FLEX CUBE core banking system software
 Information System
Top 5 Core Banking Software (CBS) in Nepal - Published on May 30, 2016

• Pumori IV
DCBL BANK, COMMERCZ AND TRUST BANK

• Pumori III
NCC BANK, NEPAL BANK, RB BANK, KIST BANK, PRIME BANK, CITIZENS BANK

• FINACLE
BOK BANK, GLOBAL IME BANK, EVEREST BANK, NIBL BANK, NABIL BANK, SUNRISE, NIC ASIA
BANK, NMB BANK, Nepal SBI

• FLEX CUBE
SIDDHARTHA BANK, LAXMI BANK, MEGA BANK

• GLOBUS/TEMENOS T24
HIMALAYAN BANK, KUMARI BANK, CIVIL BANK, MACHHAPUCHHRE BANK, ADBL
 Information System
• What is IS? Simply, Information System is an organized
system for collection, organization, storage and
communication of information.
• Specifically, IS is concerned with the study of
complementary networks that people and organization
use to collect, filter, process, create and distribute data.
• ‘Why we need IS?’ This question has evolved into a moot
issue. As marketing, accounting, finance, human resource
management, operation management, information system
has become an integral part of many business
organizations.
• In today’s world of technology, many call it business
imperative.
 Information System
• Since, you probably intend to become entrepreneurs,
managers, investors, business professionals; it is just as
important to have a basic knowledge of information
system as it is to understand any other functional areas
in business.
• Thus, it is essential to study information system in
business administration and management programs
• Information systems help many businesses improve
the efficiency and effectiveness of their business
process, managerial decision making and workgroup
collaboration to strengthen the competitive position
in rapidly changing marketplace.
 Information System
• Improvised definition of IS: An organized system of
complementary networks of hardware and software
that people and organization use to collect, filter,
process, store, transform and disseminate data and
information to support decision making,
coordination and control, analysis and visualization
in an organization.

• eCourier – Booking and Tracking automation

– SeeWhy Operational Business Intelligence System
• Cablecom – Customer Dissatisfaction Survey
• Welch’s – Oco on-demand Business Intelligence
 Information Systems
Any organized
combination of people,
hardware, software,
communication
networks, data
resources, and policies
and procedures that
stores, retrieves,
transforms and
disseminates
information in an
organization
 Fundamental Role of IS in Business
• Support business processes and operations
– Computer based IS help employees to record customer
purchases, track inventory & warehouse, pay employees,
evaluate sales trend and buy new merchandize.
– Store would come to a halt without such IS
• Support decision making by employees and managers
– Decision about what merchandize to be added or discontinued,
what kind of investments they require are typically made after
the analysis provided by computer based IS
• Support strategies for competitive advantage
– Installing Self-check out kiosks
– Gaining strategic advantage over competitors requires
innovative application of information technologies.
Trends in Information Systems
 The role of e-Business in Business
• Internet, related technologies and business applications
have changed the way businesses operate, people work
and how IS support business processes, decision making
and competitive advantage
• Businesses create eBusiness applications
– Using Internet to Web-enable business processes
– Depending on Intranet, Extranet to implement and
manage innovative eBusiness applications
• eBusiness uses Internet technologies to empower
business processes, eCommerce, and enterprise
collaboration within a company and beyond the
company - with its customers, suppliers, stakeholders
 The role of e-Business in Business
• eBusiness is online exchange of value
• Any online exchange of information, money,
resources, services or any combination thereof falls
under the eBusiness umbrella
• eBusiness application are used by companies to
– Reengineer internal business processes
– Implement eCommerce system with customers and
suppliers
– Promote enterprise collaboration among business
teams and workgroups
 The role of e-Business in Business
• Enterprise Collaboration uses software tools,
Enterprise Collaboration System, to support
communication, coordination and collaboration
among the members of networked teams and
workgroups
– Virtual team of employees and consultants uses
intranet, extranet and internet for e-mail,
videoconferencing, creating e-discussion groups
(blogs), communicating Work-in-Progress in Web
pages and for sharing documents to collaborate on
different projects.
 The role of e-Business in Business
• eCommerce is buying, selling, marketing and servicing
of products, services and information over a variety of
computer networks.
• eCommerce supports every step of commercial process
– Advertising, sales and customer support on the web
– Internet Security for safe transaction & payment
– Assurance of delivery completion from
dispatcher/delivery company
• eCommerce systems include
– Online sales through internet website
– Extranet access to inventory database by customers
– Intranet for sales reps to access customer records for CRM
 Typical eBusiness Architecture

Internet
Suppliers & Other
Business Partners
Extranet Company
Boundary
Supply Chain Management:
Procurement, Distribution & Logistics

Intranet
Engineering Manufacturing Accounting
& Research & Production & Finance

Intranet

Customer Relationship Management:

Marketing, Sales, Customer Service

Extranet
Consumers & Business Customers
 Types of Information Systems
Information System

Operation Support System Management Support System

Support Business Operations Support Management Decision Making

Transaction Processing System Management Information System

Process Control System Decision Support System

Enterprise Collaboration System Executive Information System

Specialized Processing System Specialized Processing System

Knowledge Strategic Functional

Expert
Management Information Business
System
System System System
 Operations Support Systems
• What do they do?
– Efficiently process business transactions
– Control industrial processes
– Support communications and collaboration
– Update corporate databases
 Types of OSS
• Transaction Processing Systems
– Record and process business transactions
– Example: sales processing, inventory systems, accounting
systems
• Process Control Systems
– Monitor and control physical processes
– Example: using sensors to monitor chemical processes in a
petroleum refinery
• Enterprise Collaboration Systems
– Enhance team and workgroup communication
– Example: email, video conferencing
Two Ways to Process Transactions
• Batch Processing
– Accumulate transactions over time and
process periodically
– Example: a bank processes all checks
received in a batch at night
• Online Processing
– Process transactions immediately
– Example: a bank processes an ATM
withdrawal immediately
 Management Support Systems
• What do they do?
– Provide information and support for effective
decision making by managers
• Management information systems
• Decision support systems
• Executive information systems
 Types of Management Support Systems
• Management Information Systems (MIS)
– Provides information in the form of reports & displays
– Example: daily sales analysis reports
• Decision Support Systems (DSS)
– Interactive and ad hoc support
– Product pricing, risk analysis
– Example: a what-if analysis to determine where to spend
advertising dollars, how much to produce
• Executive Information Systems (EIS)
– Critical information for executives and managers
– Example: easy access to actions of competitors, system
for access to analysis of business performance
 Other Information Systems
• Expert Systems - provide expert advice for operational chores
– Example: credit application advisor
• Knowledge Management Systems - support creation,
organization, and dissemination of business knowledge
throughout company
– Example: intranet access to best business practices
• Strategic Information Systems – uses IT to a firm’s products,
services and business processes to help it gain a strategic
advantage over customer
– Example: shipment tracking, e-commerce Web systems
• Functional Business Systems - focus on operational and
managerial applications of basic business functions
– Example: accounting, finance, or marketing
 Foundation Concepts
The components of Information Systems
 System
• A set of interrelated components, with a clearly defined
boundary, working together to achieve a common set of
objectives by accepting inputs and producing outputs through
a transformation process in an organized manner
• 3 basic functions of a system
– Input involves capturing and assembling elements that enter the
system (to be processed).
– Processing involves transformation method (that convert input
elements to output).
– Output involves transferring elements that have been produced
by transformation process to ultimate destination.
• Feedback is data about the performance of a system.
• Control involves monitoring and evaluating feedback, and
making necessary adjustment to inputs & process
 Components of Information System
• Information Systems use people, hardware, software, data and network
resources to perform input, processing, output, storage and control
activities that transform data into information products.
 Information System Resources
1. People are the essential ingredient for the successful
operation of all information system. It includes end users
and IS specialist.
 END USERS are people who use an information system or the
information it produces. They can be customers , sales person,
clerks, engineers, accountants, managers who are found at all
levels.
 Knowledge workers who collaborate & communicate

 IS SPECIALIST are people who develop and operate information

system. It includes system analysts, software developers, system
operators, technical & clerical IS persons
 Information System Resources
2. Hardware Resources includes all physical devices and
material used in information processing. It includes not only
machines, such as computers but also all data media, i.e.
tangible objects on which data is recorded.
 COMPUTER SYSTEM : consist of central processing units
containing micro processors and a variety of interconnected
devices such as printers , scanners etc.
 COMPUTER PERIPHERALS: are devices such as keyboard,
electronic mouse for the input of data and commands , a video
screen or printers for the output of the information, magnetic
or optical drives for storage of data resources
 Information System Resources
3. Software resources includes all sets of information processing
instructions.
It includes the sets of information processing instruction called
programs which direct and control computer hardware and the
set of operating instructions called procedure that people need.
 Example:
• System software: OS which control and supports the operation
of computer system
• Application software: sales analysis, payroll, word processing
programs
• Procedures: Operating instructions for the people who use IS
– Data entry, error correction, paycheck distribution procedures
 Information System Resources
4. Data resources are the input elements that are stored in
databases.
 Data constitute valuable organizational resources.
 Data can take many forms: alphanumeric, text, images,
video, audio
 The data resources of information system are typically
organized, stored, accessed by a variety of data resource
management technologies into:
 Data base that hold processed and organize data.
 Knowledge bases that hold knowledge in a variety of forms such as
facts, rules and cases of best business practices
 Information System Resources
5. Network resources includes communications technologies
and networks that are fundamental to all information
system. It includes:
 Communication Media- includes twisted pair wire,
microwave, cellular wireless technologies.
 Network Infrastructure- emphasizes that many hardware,
software and data technologies are needed to support the
operations and use of communication network.
– Communication processors such as modems,
communication control software, network OS, internet
browser packages.
 Information System Activities
• Input of Data Resources
• Processing of Data into Information
• Output of Information Products
• Storage of Data Resources
• Control of System Performance
 Input of Data Resources
• Data entry
• Editing
• Formal record of a transaction
• Optical scanning of bar coded tags on
merchandise
• Source documents
• Converting to machine readable format
 Processing of Data into Information
• Calculate
• Compare
• Sort
• Classify
• Summarize
• Update
– calculating employee pay, taxes, and
other payroll deductions
• The quality of the data must be maintained by a
continual process of correcting and updating activities
 Output of Information Products
• Transmit information to users
• Producing reports and displays about sales
performance
• Display; paper; audio, reports, forms
• The goal of information system is the
production of appropriate information
products for end users
 Storage of data
• Maintaining records on customers,
employees, products, sales
• Data are retained in an organized manner for
later use
• Fields; records; files; data bases, knowledge bases
 Control of system performance
• Generating audible signals to indicate proper
entry of data
• Feedback must be monitored and evaluated
to determine if the information system is
meeting established performance standards.
• Control system checks the feedback and
makes necessary changes
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 audible signals to indicate proper entry

of sales data.)
 MANAGERIAL CHALLENGES
• IS and technologies must be managed to support business
strategies, business processes and organizational structures and
culture of a business enterprise
• Success and failure of IT should not be measured only by efficiency
in terms of minimizing cost, time and the use of information
resources.
• It should also be measured by effectiveness in supporting business
strategy, enabling business processes, enhancing organizational
structure and culture and increasing the business and customer
values
• However, IS & technology could be mismanaged and misapplied
resulting into not only technical problem but also a business failure.
• Ex. Dell - Corporate Support call center
 MANAGERIAL CHALLENGES
• Developing IS Solutions
– Agile : system is defined at high level and then developed in
short iterations
– Usable software after each iteration
• Challenges and Ethics of IT
– What might be considered improper, irresponsible and harmful
to other people or society
– Proper business use of IT, internet and organization’s IT
resources
– How to protect yourself from computer crime and other IT risks
– Ex. CRM and HRM cases
– Ex. Hannaford Bros – Importance of securing cust. Data
 MANAGERIAL CHALLENGES
• Challenges of IT career
– Expensive pay to IT specialist
– Raising labor costs
– Off-shore outsourcing to India, Asia Pacific, Middle-
East.
– Decrease in the cost of IT and software resulting in
more use of them by companies
– To stay competitive and efficient, business must use
it
– More new and complex IS are being implemented
and used