INFORMATION SYSTEM

Information system is the organized combination of people , hardware, software, communication networks and data resources that collects, transforms and disseminates information in an organization. Areas of Information System-

Foundation Concepts Business Applications Management Challenges Information Technologies

Development Processes

TYPES OF INFORMATION SYSTEM

Manual Information Systems- Like simple manual hardware devices and informal communication channels. Computerized Information SystemsUses computer hardware and software, the internet and other telecommunication network, computer based data resource management techniques to transform data resources into many information products. Software
Information System Resources

People

Hardware Data Networks

Role of IS in Business
An Information System is a system that accepts resources as input and processes them into products as output. A business organization is a system Where economic resources are transformed by various business processes into goods and services. Management

Information Systems

Goods & Services Economic Resources: People, Money, Material, Machines, Land, Facilities Input Business Resources: Market, Develop, produce, and deliver products and services Processing Products ,Services, Payments, contributions , Information

Output

Information System model expresses a fundamental conceptual framework for the major components and activities of information systems. An information System depends on the resources of people , hardware, software and networks To perform input, processing, output, storage and control activities that convert data resources into information products. It highlights the relationship among the components and activities of information systems. Information system activities are shown in business Input- Optical scanning of bar code tags on merchandise Processing- Calculating employee pay, taxes 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.

Role of IS applications in Business

Support of its business processes and operations. Support of decision making by its employees and managers. Support of its strategies for competitive advantage.

Su

Support strategies for competitive advantage. Support of business decision making Support business processes and operations

ExampleMost retail stores use computer based information systems to help them Record customer purchases, keep track of inventory, pay employees, buy New merchandise and evaluate sales trends. Store operations would come to halt without the support of such information systems. Gaining a strategic advantage over competitors requires innovative use of information technology Store management might make a decision to install touch screen kiosks in all Their stores with links to their e-commerce website for online shopping. This attract new customers and build customer loyalty because ease of shopping and buying merchandise provided by such information systems.

TRENDS IN INFORMATION SYSTEM

In 1960 Role of IS was simple :transaction processing, record keeping, accounting Then another role was added as MIS which focused on developing business Applications that provided managerial end-users with predefined management reports for decision making. In 1970s the concept of decision support system was evolved. In 1980s news roles for information system appeared i.e. the rapid development of micro computer processing power gave birth to end user computing. It became evident that most top corporate executives did not directly use MIS reports so EIS was developed. Expert systems and other knowledge based systems forged a new role for information systems. Further Strategic information system was evolved in which IT becomes an integral component of business processes, products and services to have the competitive advantage.

ELECTRONIC BUSINESS AND COMMERCE:1990s-2000s Internet worked e business and e commerce systems STRATEGIC & ENDUSER SUPPORT:1980s-1990s End user computing systems, expert systems, strategic information system DECISION SUPPORT :1970s -1980s MANAGEMENT REPORTING: 1960s-1970s DATA PROCESSING:1950s-1960s

ROLE OF E-BUSINESS
E business is the use of internet technologies to internet work and empower business processes electronic commerce and enterprise communication and collaboration within a company and with its customers, suppliers and business Stakeholders. Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers. In practice, e-business is more than just e-commerce. While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e-commerce is a subset of an overall e-business strategy. E-commerce seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency .

E-business involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners. Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business can be conducted using the Web, the Internet, intranets, extranets, or some combination of these.

TYPES OF INFORMATION SYSTEM

Information systems differ in their business needs. Also depending upon different levels in organization information systems differ. Three major information systems are Transaction processing systems Management information systems Decision support systems Information systems

Operation support system

Management Support System MIS DSS EIS

Transaction processing system

Process Control system

Enterprise Collaboration system

Transaction processing system- process data resulting from business transactions, update operational databases and produce business documents. Example Sales and inventory processing system Process Control System- Monitor and control industrial processes. ExamplePower generation. Enterprise Collaboration System-Enhance team and workgroup communications and productivity and are called office automation systems. Example- E-mail, chat MIS- Provide information in the form of prespecified reports and displays to support business decision making. Example- Sales analysis, production performance. Decision Support System-Provide interactive and adhoc support for the decision making processes of managers and other business professionals.. Example-Product pricing Executive Information System-Provide critical information from many sources tailored to information needs of executives. Example-systems for easy access to analysis of business performance.

Other Information Systems

Expert System- Example Diagnostic Maintenance system

Knowledge Management System- Example- sales proposal strategies

Functional Business System-IS that support applications in accounting finance etc.

Strategic Information System-Example-Online stock trading, shipment tracking

Role of IS in an organization
The information needs are different at different organizational levels. Accordingly the information can be categorized as: strategic information, managerial information and operational information. Strategic information is the information needed by top most management for decision making. For example the trends in revenues earned by the organization are required by the top management for setting the policies of the organization. This information is not required by the lower levels in the organization. The information systems that provide these kinds of information are known as Decision Support Systems.

Managerial Challenges Of IT
Global Business Environment

E Business Enterprise

Business Strategies Business processes Structure and Culture

Internet worked information systems

Customer Value Business Value

IT Infrastructure

Prospective managers and business professionals should become aware of Problems and opportunities presented by use of information technology and learn how to confront such managerial challenges. The above figure shows that information technology must be managed to support the business strategies, business processes and organizational structures and culture of an enterprise to increase its customer and business value. The success of Information system is not only to reduce cost time and use of information resources rather by effectiveness of information technology to support the business strategies. Example- In boeing company, because of unintegrated IT systems, costly delays happened in obtaining 6 millions parts to build each aircraft in 1997. Then supply chain was integrated into internal production systems.

Components Of IS
The information system resources and its activities are important components of Information system.

Input Processes Output

Information System Resources

People Resources- End users and IS Specialist Hardware Resources- Computer systems, computer peripherals Software Resources- System software , application software, procedures Network Resources- Communication Media, Network support

Information Activities
Input- Optical scanning of bar code tags on merchandise Processing- Calculating employee pay, taxes 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.

Strategic IT
Information systems that support or shape the competitive position and Strategies of an e-business enterprise. E.g Online auction, online discount etc. Support competitive strategies Help business cut costs Help to differentiate Innovation in its products and services Promote growth Develop alliances Lock in customers and suppliers Create switching cost.

Competitive Strategy Concept

Cost Leadership strategy Diffentiation strategy Innovation strategy Growth Strategy Alliance Strategy A firm can succeed in the long run if it develops strategies to confront five Competitive forces that shape the structure of competition in its industryRivalry of competitors within its industry, Threat of new entrants, threat of Substitutes, bargaining power of customers, bargaining power of suppliers

Competitive Advantages of Information Technology

Lowest price guarantee Buyer set pricing Auction set prices Increase in Market share Market leadership Increase in global market Reduced inventory cost Agile market leadership Increased sales

Reengineering Business Processes

Reengineering is a fundamental rethinking and redesign of business processes to achieve dramatic improvements in cost, quality, speed and service. BPR combines a strategy of promoting business innovation with a strategy of making major improvements to business processes. IT has a major role in reengineering business processes. Example- Ford is using web technologies to reengineer its internal business processes. Fords global intranet connects thousands of designers in US. The potential payback of reengineering is high so is its risk of failure and level of disruption to the organization environment.

Business Process Reengineering is the analysis and design of workflows and processes within an organization. A business process is a set of logically related tasks performed to achieve a defined business outcome. Many recent management information systems developments aim to integrate a wide number of business functions. Today's environment is demanding firms to quickly develop and offer products that will satisfy customers' needs. Companies may not be able to do this if they use processes with many steps and scarce collaboration. Consequently, this environment forces a change in business processes to feature reduced mediation and increased collaboration