11th Edition

TODAY AND TOMORROW

CHAPTER

12

Information Systems and Systems Development

Learning Objectives

Understand what information systems are.

Explain who uses information systems in a typical organization.

Identify several types of information systems commonly found in organizations and describe their purpose.

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Learning Objectives, Contd

Explain the people involved with system development. Identify and describe the different steps of the system development life cycle (SDLC). Discuss several approaches used to develop systems.

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Overview

This chapter covers:

What are and who uses information systems Common types of information systems Use of the information systems department and outsourcing The system development life cycle The major approaches to system development

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What Is an Information System?

System: collection of elements and procedures that interact to accomplish a goal Information system: system used to generate information to support users in an organization System development: process of designing and implementing a new or modified system

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Who Uses Information Systems?

Executive managers: strategic decisions Middle managers: tactical decisions Operational managers: operational decisions geared toward meeting short-term objectives Nonmanagement workers: on-the-job decisions

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Types of Information Systems

While hundreds of specific types of information systems exist, many fall into one of eight categories

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Office Systems

Office system: A system in which office automation hardware, software, and other resources are used to facilitate communications and enhance productivity Office automation: computer-based officeoriented technologies, such as word processing, e-mail, workgroup computing, and the like Document processing systems (create, distribute, store, and manage documents

Formats need to be considered for archived documents so they can be read at a later date

Communications systems (e-mail, messaging, online conference, workgroup computing, etc.)

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Transaction Processing Systems

Transaction processing system: System that processes and records data created by an organizations business transactions Order entry systems E-commerce systems Point-of-sale (POS) systems

Check processing systems

Payroll systems

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Accounting systems
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Management Information Systems (MISs)

Management information system (MIS): system that provides decision makers with preselected information Usually provides information in the form of computer-generated reports

Much of the time, this information is generated from data obtained from transaction processing

Most frequently used to make moderately structured, middle-management decisions

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Decision Support Systems (DSSs)

Decision support system (DSS): provides people with the tools and capabilities to organize and analyze their decision making information

Provides information on demand and incorporate data from both internal and external sources

Tailored to help with specific types of decisions; typically used by middle and upper management
Special type of DSS targeted to upper management = executive information system (EIS)

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Geographic Information Systems (GISs)

Geographic information system (GIS): system that combines geographical information with other types of data to provide a better understanding of relationships among the data

Commonly used to make decisions about locations (e.g. new facility locations, disaster risk, geographical crime patterns)

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Enterprise-Wide and Inter-Enterprise Systems

Enterprise-wide system: integrates activities throughout an entire enterprise Inter-enterprise system: links multiple enterprises, such as a business and its customers, suppliers, and partners Types of enterprise-wide and inter-enterprise systems Electronic data interchange (EDI): transfers data between different companies using the Internet or another network

Often used to automate reordering materials and products

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Enterprise-Wide and Inter-Enterprise Systems, Contd

Types of enterprise-wide and inter-enterprise systems, contd Enterprise resource planning (ERP): large integrated system that ties together all of a businesss activities

Enterprise application integration (EAI): exchanging information from an ERP or other internal system among different applications and organizations

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Enterprise-Wide and Inter-Enterprise Systems, Contd

Types of enterprise-wide and inter-enterprise systems, contd Customer relationship management (CRM): a system designed to build and manage good relationships with customers

Often implemented via the Web today (eCRM)

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Enterprise-Wide and Inter-Enterprise Systems, Contd

Types of enterprise-wide and inter-enterprise systems, contd Supply chain management (SCM): the oversight of materials, information, and finances as they move from the original supplier to the consumer Value chain management systems (maximize the flow of products, goods, services, and information through a value-added network of suppliers Just-in-time (JIT) systems (resources are limited to the right amount at the right time to fill orders) Inventory management systems (track and manage inventory)
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Enterprise-Wide and Inter-Enterprise Systems, Contd

Types of enterprise-wide and inter-enterprise systems, contd Product lifecycle management (PLM): organizes and correlates all information about a product to help companies improve products and better track costs and profits Price optimization systems: determine the optimal price to maximize product profitability Requires complex calculations so more possible today than in the past

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Enterprise-Wide and Inter-Enterprise Systems, Contd

Types of enterprise-wide and inter-enterprise systems, contd Price optimization systems, contd Markdown optimization software: times markdown of products that are still unsold at the end of the product life cycle Electronic shelf labels (ESLs): used to always display the price in the product database Enterprise architecture: a comprehensive framework used to describe and manage an organizations business functions and systems
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Design and Manufacturing Systems

Design and manufacturing systems (use computers to automate the design or manufacturing process Computeraided design (CAD) Computeraided manufacturing (CAM)

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Artificial Intelligence Systems

Artificial intelligence (AI) system: a system in which a computer performs in ways that would be considered intelligent if observed in humans Turing Test Initial advances in AI made through chess-playing programs

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Artificial Intelligence Systems, Contd

Intelligent agents: programs that perform specific tasks to help to make a users work environment more efficient or entertaining and that typically modifies its behavior based on the users actions Application assistants Search agents Shopping bots Entertainment bots Chatterbots
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Artificial Intelligence Systems, Contd

Expert system: provides the type of advice that would be expected from a human expert Knowledge base: database containing facts provided by human experts and rules the system should use to make decisions based on those facts Inference engine: program that applies the rules to the data stored in the knowledge base, in order to reach decisions Is only as good as the knowledge base and inference engine; also needs honest, correct information from the user in order to work correctly
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Artificial Intelligence Systems, Contd

Neural network: expert systems in which the human brains pattern-recognition process is emulated by the computer system Used in : Handwriting, speech, and image recognition Geographical mapping Medical imaging Crime analysis Biometric identification Vision systems (quality checks in manufacturing, recognizing postage stamps, etc.)
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Artificial Intelligence Systems, Contd

Robotics: the study of robot technology Robot: A device, controlled by a human operator or a computer, that can move and react to sensory input Used in situations: That are dangerous or impossible for people to perform Where immense precision is needed To perform monotonous tasks To assist individuals

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Artificial Intelligence Systems, Contd

Types of robots Military robots (unmanned planes and vehicles, devices to initially investigate locations, exoskeleton suits, etc.) Business robots (monitoring facilities, implementing videoconferencing, etc.) Personal robots (entertainment, perform communications tasks, perform household tasks, etc.)

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Responsibility for System Development

Information systems (IS) department: includes most, if not all, of the computer and networking personnel for an organization including: Data processing personnel Systems analyst: studies systems in order to determine what works needs to be done and how this work may best be achieved Business analyst System analysis and design group Programmers Operations personnel
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Responsibility for System Development

Outsourcing companies: outside vendors used to process specific business tasks Use growing, primarily due to cost Offshore offsourcing = outsourced to another country Captive offshoring = companies setting up their own facilities in another country Need to consider appropriateness of outsourcing, as well as security and privacy System development team is typically led by systems analyst; team should include users
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The System Development Life Cycle (SDLC)

System development life cycle (SDLC): process consisting of size phases of system development

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Preliminary Investigation

Preliminary investigation: the phase of the system development life cycle in which a brief feasibility study is performed to assess whether or not a fullscale project should be undertaken Purpose is to define and evaluate the problem and see if it is worthy of further study Documentation: Feasibility report (includes recommendation regarding whether or not the project should move on to the next stage in the SDLC)

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System Analysis

System analysis: the phase of the system development life cycle in which a problem area is thoroughly examined to determine what should be done Data collection: gathering information about the system (organizational chart, observation, interviewing users, etc.) Data analysis: analyzing information to determine requirements for the new systems Tools include data flow diagrams, decision tables, checklists, etc. Documentation: any instruments used for data gathering; any tools developed
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System Design

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System design: the phase of the system development life cycle in which a model of the new system and how it will work is formally established Helpful to develop a model of the new system System flowcharts Input/output designs Data dictionary Most companies will also perform a cost/benefit analysis (should consider both tangible and intangible benefits) Documentation: Specifications of new system
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System Acquisition

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System acquisition: the phase of the system development life cycle in which hardware, software, and other system components are acquired Need to determine if needed products will be purchased or developed in house Software to be developed moves into the program development process (covered in Chapter 13) Products to be purchased need to be identified and a vendor selected Can use RFP and/or RFQ Bids need to be evaluated; vendor rating systems and benchmark tests can be helpful Documentation: RFPs, RFQs, any vendor evaluation materials, etc.
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System Implementation

System implementation: the phase of the system development life cycle that encompasses activities related to making the system operational

Direct conversion (old system deactivated; new system installed) Parallel conversion (both old and new operated for a period of time) Phased conversion (new system implemented by module) Pilot conversion (new system installed at a pilot location initially)

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Documentation: Implementation schedule, test data, test results, etc.

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System Maintenance

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System maintenance: the phase of the system development life cycle in which minor adjustments are made to the finished system to keep it operational until the end of the systems life or until the time that the system needs to be redesigned One of the first activities is the post-implementation review (identifies any glitches in the new system that need to be fixed) An ongoing-process When a major change is needed, the project goes through the SDLC again Documentation: Completed project folder
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Approaches to System Development

Traditional system development: SDLC phases are carried out in the preset order Used primarily when system requirements are easy to determine, when the system is very familiar, or when management requests it Time-consuming Prototyping: a small model, or prototype, of the system is built before the full-scale development effort is undertaken Prototype can be revised as needed before full system is developed End-user development: user is primarily responsible for the development of the system
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Summary

What Is an Information System? Who Uses Information Systems? Types of Information Systems Responsibility for System Development The System Development Life Cycle (SDLC) Approaches to System Development

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