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The Basic Concepts

Information Technology

A science that has evolved over a period of time


to assist businesses in doing better business!!
Why IT?
• Management & Control
• Stiff competition in world markets
• Global Work Groups
• Global delivery systems
IT as a Sales Tool
IT as a Sales Tool
• Email
• Websites
• Short Messages
• Audio-Visual Presentations (ex-Pharma,
etc.)
• Flash Presentations (ex-Pharma,
Manufacturing, Construction, etc)
• CD’s,DVD’s
• E-Learning sites
IT as a Management Tool
• Specifically tailored IT applications to suit various
businesses (ex-Insurance, Banking, etc)
• Enterprise wide applications enable transparency across
the organization
• Streamline processes thus reducing costs and
increasing productivity
• Effective reporting systems facilitated by IT applications
(ex-MIS,DSS,EIS,etc.)
• IT applications specifically designed to retain precious
tacit knowledge of the organization
• Specific CRM tools developed to retain customer
data(choices,preferences,habits,etc)
• Tools to handle the supply chain (SCM)
IT as a Management Tool-A brief
overview
• MIS (management Information System)
• ERP(Enterprisewide Resource Planning)
• CRM (Customer Relationship
Management)
• SCM (Supply Chain Management)
• KM (Knowledge Management)
CRM
• A tool specifically developed to record and
retain customer interactions, habits,
preferences, likes/dislikes, etc.

• Empowers the management with critical


customer data.
Computer Components

CPU
Input Secondary
Devices Storage
Buses
Output Communications
Devices Devices

Primary
Storage
CPU & Primary Storage

Primary
CPU
Storage

Data Bus
Address Bus
Control Bus

Input Output Secondary


Devices Devices Storage
CENTRAL PROCESSING UNIT
(CPU)

ARITHMETIC/LOGIC
CONTROL UNIT
UNIT

CLOCK
ROM
RAM

PRIMARY (MAIN) MEMORY


TYPES OF MEMORY
• RAM: Random Access Memory
– Dynamic: Changes thru processing
– Static: Remains constant (power on)
• ROM: Read Only Memory
(preprogrammed)
– PROM: Program can be changed once
– EPROM: Erasable thru ultraviolet light
– EEPROM: Electrically erasable
*
OPTICAL STORAGE

• CD-ROM: 500-660 MEGABYTES


–LAND: Flat parts of disk surface reflects
light
–PITS: small scratch on surface scatters
light
• WRITE ONCE / READ MANY (WORM):
–CD-R: Compact Disk - Recordable
–CD-RW: CD - Rewritable
• DIGITAL VIDEO DISK (DVD): CD size,
up to 10 gigabytes of data
*
DATA & INFORMATION
• DATA: STREAMS OF RAW FACTS
REPRESENTING EVENTS SUCH AS
BUSINESS TRANSACTIONS

• INFORMATION: CLUSTERS OF FACTS


MEANINGFUL & USEFUL TO HUMAN
BEINGS IN PROCESSES SUCH AS
MAKING DECISIONS
DATABASE MANAGEMENT SYSTEM
(DBMS)

SOFTWARE TO CREATE & MAINTAIN


DATA
ENABLES BUSINESS APPLICATIONS
TO EXTRACT DATA
INDEPENDENT OF SPECIFIC
COMPUTER PROGRAMS
SYSTEM

INPUT PROCESS OUTPUT

FEEDBACK
FUNCTIONS OF AN INFORMATION
SYSTEM
ENVIRONMENT
Customers Suppliers

ORGANIZATION
INFORMATION SYSTEM

INPUT PROCESS OUTPUT

FEEDBACK

Regulatory Stockholders Competitors


Agencies
COMPUTER-BASED INFORMATION
SYSTEMS (CBIS)
• FORMAL SYSTEMS
• FIXED DEFINITIONS OF DATA,
PROCEDURES
• COLLECTING, STORING,
PROCESSING, DISSEMINATING, USING
DATA
ORGANIZATIONS
• PEOPLE: Managers, knowledge workers,
data workers, production or service
workers
• STRUCTURE: Organization
chart, groups of specialists, products,
geography
ORGANIZATIONS

• OPERATING PROCEDURES: Standard


Operating Procedures (SOP), rules for
action
• POLITICS: Power to persuade,
get things done
• CULTURE: Customs of
behavior
MAJOR
BUSINESS FUNCTIONS
• SALES & MARKETING
• MANUFACTURING
• FINANCE
• ACCOUNTING
• HUMAN RESOURCES
TRANSFORMATION OF
ENTERPRISE
• FLATTENING
• DECENTRALIZATION
• FLEXIBILITY
• LOCATION INDEPENDENCE
• LOW TRANSACTION COSTS
• EMPOWERMENT
• COLLABORATIVE WORK
INFORMATION SYSTEMS

ORGANIZATIONS TECHNOLOGY

INFORMATION
SYSTEMS

MANAGEMENT
APPROACHES TO INFO SYSTEMS

TECHNICAL APPROACHES
COMPUTER
OPERATIONS
SCIENCE
RESEARCH
MANAGEMENT
SCIENCE
MIS
SOCIOLOGY

PSYCHOLOGY POLITICAL
SCIENCE
BEHAVIORAL APPROACHES
Major Types of Systems
• Executive Support Systems (ESS)
• Decision Support Systems (DSS)
• Management Information Systems (MIS)
• Knowledge Work Systems (KWS)
• Office Automation Systems (OAS)
• Transaction Processing Systems (TPS)
Management Information System
• Management Level-
– Inputs-High volume data
– Processing-Simple models
– Outputs-Summary reports
– Users-Middle Managers
• Example-Annual Budgeting
Typical TPS Applications
Sales & Marketing Systems
• Major Functions-
– Sales Management, Market Research,
Promotion, Pricing, New Products
• Major Applications-
– Sales Order info systems, Market research
system, pricing system
Typical TPS Applications
Manufacturing & Production
Systems
• Major Functions-
– Scheduling, purchasing, shipping, receiving,
engineering, operations
• Major Applications-
– Material resource planning systems,
Purchase order control systems, engineering
systems, quality control systems
Typical TPS Applications
Finance & Accounting Systems
• Major Functions-
– Budgeting, general ledger, billing, cost
accounting
• Major Applications-
– General ledger, Accounts receivable,
accounts payable, budgeting, funds
management systems
Typical TPS Applications
Human Resources Systems
• Major Functions-
– Personnel records, benefits, compensation,
labor relations, training.
• Major Applications-
– Payroll, employee records, benefit systems,
career path systems, personnel training
systems
Typical TPS Applications
Other Types (ex-University, etc)

• Major Functions-
– Admissions,Grade records, Course records,
Alumni
• Major Applications-
– Registration system, student transcript
system, curriculum class control system,
alumni benefactor system.
Knowledge Work Systems

• Knowledge Level
– Inputs-Design specs
– Processing-Modeling
– Outputs-Design, Graphics
– Users-Technical staff
• Example-Engineering work station
Office Automation System

• Towards a “Paperless” office


• Redesign a workflow
• Integrated Software
• Bright, Cheerful workplace
Management Information System

• Structured & semi-structured decisions


• Report control oriented
• Past & present data
• Internal orientation
• Lengthy design process
TPS Data for MIS Applications

TPS MIS
Order Sales
Data
Processing
System
Unit
Order File Product
Cost
MRP System MIS Reports
Product
Chang
e Data
Production Master File
Expens Managers
General
Ledger e Data
System
Accounting File
Decision Support Systems

• Management Level
– Inputs-Low volume data
– Processing-Interactive
– Output-Decision Analysis
– Users-Professionals, Staff
• Example-Contract Cost Analysis
Decision Support Systems

• Flexible, Adaptable, Quick


• User controls Inputs/Outputs
• No professional programming
• Supports decision process
• Sophisticated Modelling tools
Executive Support Systems

• Strategic Level
– Inputs-Aggregate data
– Processing-Interactive
– Outputs-Projections
– Users-Senior Managers
• Example-5 Yrs operating plan
Executive Support Systems

• Top level Management


• Designated to Individual
• Ties CEO to all levels
• Very expensive to keep up
• Extensive support staff
Interrelationship among systems

ESS

MIS DSS

KWS
TPS
OAS
Systems from a Functional
Perspective

• Sales & Marketing Systems


• Manufacturing & Production Systems
• Finance & Accounting Systems
• Human Resource Systems
Sales & Marketing Information
Systems
System Description Organizational Level

Order Processing Enter, Process, Track Operational


orders

Market Analysis Identify customers & Knowledge


Markets

Pricing Analysis Determine Prices Management

Sales Trends Prepare 5-Year Strategic


Forecasts
Manufacturing Information Systems

System Description Organizational Level

Machine Control Controls action of Operational


equipment

Computer Aided Design Design new products Knowledge

Production Planning Decide number, Management


Schedule of products

Facilities Location Decide where to locate Strategic


facilities
Finance & Accounting information
System
System Description Organization Level

Accounts receivable Track money owed to Operational


firm

Portfolio Analysis Design firms investment Knowledge

Budgeting Prepare short-term Management


budgets

Profit Planning Plan long-term profits Strategic


Human Resources Information System
System Description Organizational Level

Training & Development Track training, skills, Operational


appraisals

Career Pathing Design employee career Knowledge


paths

Compensation Analysis Monitor wages, Salaries, Management


Benefits

Human Resources Plan long-term Strategic


Planning manpower needs
SYSTEM INTERDEPENDENCE

INTERDEPENDENCE
HARDWARE

BUSINESS SOFTWARE DATABASE


Strategy
Rules TELE-
Procedures COMMUNICATIONS

ORGANIZATION INFORMATION SYSTEM


Examples of Business Processes

• Manufacturing & Production


– Assembling product, checking quality,
producing bills of materials
• Sales & Marketing
– Identifying customers, creating customer
awareness, selling
Examples of Business Processes

• Finance & Accounting


– Paying creditors, creating financial
statements, managing cash accounts
• Human Resources
– Hiring employees, evaluating performance,
employee benefit plans, etc.

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