IT For Decision Making

Course Content-conceptual framework

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CONCEPTUAL FRAME WORK OF IS

What Does Mangers Need To Know: Conceptual Framework

“You do not have to be a mechanic to drive a car”, “You do not have to be

an IT specialist to use computers” 11/07/2023
 Cont’d

Foundation Concepts
 Fundamental business information systems concepts
including: trends, components, and roles of information
systems and competitive advantage concepts and
applications

Information Technologies
 Major concepts, developments, and management issues in
information technology—that is, hardware, software, networks,
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data management, and many Internet-based technologies
 Cont’d

Business Applications
How businesses use the Internet and other information technologies to
support their business processes, e-business and e-commerce initiatives,
and business decision making

Development Processes
 How business professionals and information specialists plan, develop, and
implement information systems to meet business opportunities

Management Challenges
The challenges of business/IT technologies and strategies at the end-user,
enterprise, and global levels of a business, including security and ethical
challenges and global IT management
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 NB: Each will be treated at a separate chapter
 Chapter One
FOUNDATION CONCEPTS
(FUNDAMENTALS OF INFORMATION
SYSTEMS)

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1-1. Introduction to Information System

 Business is not as usual anymore in the globe

Example : In USA (2010)
● Over $562 b for the acquisition of HW, SW and Telecom
equipments
● Over $800 billion for business and management
consultancy service
● New businesses and industries appear, old ones
decline

● Successful firms are those who learn how to use the new
information technologies 11/07/2023
1-1. IS Concepts: System, information and IS

1- What is a system?
 System is defined as 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 in an
organized transformation process

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Cont’d
2. What is information?
-Information is the processed data(raw facts) that
help manager to make decision.
-To help managers to make accurate decision,
information need to have the following main
characteristics:

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 Cont’d

3-What is information system?

 “Information systems are combinations of component parts such as
hardware, software &telecommunications networks that people
build and use to collect, process, store, retrieve and disseminate
information to support decision making, coordination, control,
analysis, and visualization in an organization

 IS is a combination of people, hardware, software, communications

networks ,data resources, polices and procedures that stores,
retrieves , transform and transmit information in an organization

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 Cont’d

Examples of information systems:

Card catalogs in a library are designed to store data about the
books in an organized manner that allows readers to locate a
particular book by its title, author name, subject, or a variety of other
approaches

 The cash register at your favorite fast-food restaurant is part of

a large information system that tracks the products sold, the time of
a sale, inventory levels, and the amount of money in the cash drawer

 Businesses: – Can use information systems to increase revenues, improve

customer service and reduce costs Fundamentals of
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 Characteristics of a system:

o components (subsystems)
o Interrelated components
o System boundary
o System interface: open vs closed system
o Purpose(objective)
o Input
o Process
o Output
o Constraints : limitations that it cannot perform
o Entropy : gradual decline in performance

Note that a system does not exist in a vacuum; rather, it exists and functions in an environment
containing other systems. If a system is one of the components of11/07/2023
a larger system, it is a
subsystem , and the larger system is its environment .
Characteristics of Systems

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Organizations As a System

Systems have 3 basic functions: Input, process and output

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1-2. Components of Information System: IS resources and IS
activities

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 Cont’d

 information systems are made up of different components that work together

to provide value to an organization

 People rely on modern information systems to communicate with one

another using a variety of physical devices (hardware) , information
processing instructions and procedures (software) , communications
channels (networks) , and stored data (data resources)

 Generally, IS is made up of IS resources and IS activities:

 There are five IS resources: hardware, software, data, people, and process

 The first three, fitting under the category technology and the last two, people
and process, are really what separate the idea of information systems from
more technical fields, such as computer science 11/07/2023
 Cont’d

i. Hardware
 Information systems hardware is the part of an information system
you can touch – the physical components of the technology.
Computers, keyboards, disk drives, iPads, and flash drives are all
examples of information systems hardware

Technology: technology can be thought of as the application of scientific knowledge

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for practical purposes
 Cont’d

ii. Software
 Software is a set of instructions that tells the hardware what to do.
 Software is not tangible – it cannot be touched.

 When programmers create software programs, what they are really

doing is simply typing out lists of instructions that tell the
hardware what to do.

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 Cont’d

 There are several categories of software, with the two main

categories:
a. operating-system software: which makes the hardware usable
E.g. of operating systems include Microsoft Windows on a personal
computer and Google’s Android on a mobile phone

b. application software: which does something useful.

Examples of application software are Microsoft Excel

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 Cont’d

iii. Data
 Data is a collection of facts.
For example, your street address, the city you live in, and your phone number are
all pieces of data. Like software, data is also intangible.
 By themselves, pieces of data are not really very useful. But
aggregated, indexed, and organized together into a database, data
can become a powerful tool for businesses.
 Organizations collect all kinds of data and use it to make decisions.
These decisions can then be analyzed as to their effectiveness and
the organization can be improved.
 Distinguish: Data Vs Information
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 Cont’d

iv. People
 When thinking about information systems, it is easy to get
focused on the technology components and forget that we must
look beyond these tools to fully understand how they integrate
into an organization

 From the front-line help-desk workers, to systems analysts, to

programmers, all the way up to the chief information officer
(CIO), the people involved with information systems are an
essential element that must not be overlooked

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 Cont’d

v. Process
 A process is a series of steps undertaken to achieve a desired
outcome or goal.

 Information systems are becoming more and more integrated

with organizational processes, bringing more productivity and
better control to those processes

 Technology buzzwords such as “business process reengineering,”

“business process management,” and “enterprise resource
planning” all have to do with the continued improvement of these
business procedures and the integration of technology
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 Cont’d

Summary of IT Component

People Resources
 Specialists—systems analysts, software developers, systems operators.
 End Users—anyone else who uses information systems.
Hardware Resources
 Machines—computers, video monitors, magnetic disk drives, printers, optical scanners.
 Media—floppy disks, magnetic tape, optical disks, plastic cards, paper forms.
Software Resources
 Programs—operating system programs, spreadsheet programs, word processing programs, payroll programs.
 Procedures—data entry procedures, error correction procedures, paycheck distribution procedures.
Data Resources
 Product descriptions, customer records, employee files, inventory databases.
Network Resources
 Communications media, communications processors, network access, control software.
Information Products
 Management reports and business documents using text and graphics displays, audio responses,
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and paper forms.
 Activity

Recognizing an information system

 Take in to account a particular information system

and identify

o The information system resource and

o Information system activities

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Discussion Points

● How information systems are transforming business?

● List out possible businesses those are transformed
● Hint – printed media such as newspaper readership
● As a Business Manager
 How much amount of money your firm invest for IT?
 Do you believe that such amount of investment for IT

in your firms is a wise decision ?

 Why an IT?

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1-3. Fundamental Roles of IS In Business

 The three fundamental roles of the business

applications of information systems includes:

 support for business processes and operations,

 Support decision making, and
 Support competitive advantage

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Fundamental Roles of IS in Business

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 Cont’d

a) Support of Business Processes and Operations

As a consumer, you regularly encounter information systems that
support the business processes and operations at the many retail
stores where you shop.
-For example, most retail stores now use computer based information systems to
help their employees record customer purchases, keep track of inventory, pay
employees, buy new merchandise, and evaluate sales trends.
-Wal-Mart’s RetailLink system links suppliers to stores for superior
replenishment system
Store operations would grind to a halt without the support of such
information systems.
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 Cont’d

b) Support of Business Decision Making

Information systems also help store managers and other business professionals
make better decisions.
 For example, decisions about what lines of merchandise need to be added or discontinued and
what kind of investments they require are typically made after an analysis provided by computer
based information systems.
Note:
 Without accurate information:
● Managers must use best guesses which Leads to:
o Overproduction or underproduction of goods and services
o Misallocation of resources
o Poor response times

● Poor outcomes raise costs, lose customers

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 Cont’d

c) Support of Strategies for Competitive Advantage

Gaining a strategic advantage over competitors requires the innovative
application of information technologies.

 For example, store management might make a decision to install touch-screen kiosks in
all stores, with links to the e-commerce Web site for online shopping.

 This offering might attract new customers and build customer loyalty
because of the ease of shopping and buying merchandise provided by such
information systems.

 Thus, strategic information systems can help provide products and services
that give a business a comparative advantage over its competitors.
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 1-4. Trends In Information Systems

 One of the roles of information systems is to take data

and turn it into information, and then transform that
into organizational knowledge.
 As technology has developed, this role has evolved
into the backbone of the organization

 To get a full appreciation of the role information

systems play, we will review how they have changed
over the years
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 Cont’d

Data Processing: 1950s–1960s

 Until the 1960s, the role of most information systems was

simple: transaction processing, record keeping, accounting, and
other electronic data processing (EDP) applications.

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 Cont’d

Management Reporting: 1960s–1970s

 Then another role was added, namely, the processing of all
these data into useful, informative reports.
 Thus, the concept of management information systems (MIS)

was born.
-This new role focused on developing business applications
that provided managerial end users with predefined
management reports that would give managers the
information they needed for decision-making purposes

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 Cont’d

Decision Support: 1970s–1980s

 By the 1970s, it was evident that the pre-specified information products

produced by MIS were not adequately meeting the decision making
needs of management, so the concept of decision support systems (DSS)
was born.

-The new role for information systems was to provide managerial end users
with ad hoc, interactive support of their decision-making processes.

-This support would be tailored to the unique decisions and decision-

making styles of managers as they confronted specific types of problems
in the real world 11/07/2023
 Cont’d

Strategic and End-User Support: 1980s–1990s

In the 1980s, several new roles for information systems appeared

End-user computing systems
 End users could now use their own computing resources to support their job requirements instead of
waiting for the indirect support of centralized corporate information services departments

Executive information systems

 EIS were created to give top executives an easy way to get the critical information they wanted, when
they wanted it, and tailored to the formats they preferred

Expert systems
 Knowledge-based expert advice for end users

Strategic information systems

 In this concept, information technology becomes an integral component of business
processes, products, and services that help a company gain a competitive advantage in the
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global marketplace
 Cont’d

Electronic Business and Commerce: 1990s–2000s

 Internet-based e-business and e-commerce systems

 Web-enabled enterprise and global e-business operations and

electronic commerce on the Internet, intranets, extranets, and other

networks

Enterprise Resource Planning & Business Intelligence:2000s–

2010s
 Integrates all facets of a firm, including its planning,

manufacturing, sales, resource management, customer relations,

inventory control, order tracking, financial management, human
resources, and marketing—virtually every business11/07/2023function
 Cont’d

 We are also entering an era where a fundamental role for IS is

business intelligence(BI)

 BI refers to all applications and technologies in the organization

that are focused on the gathering and analysis of data and
information that can be used to drive strategic business decisions.

 BI relies on sophisticated metrics and analytics to “see into the

data” and find relationships and opportunities that can be turned
into profits

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Cont’d

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Cont’d

 Explain the role of IS in the business world

 Discuss the trends of IS

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