Overview of Business & Systems. What is a Business? Overview of Business & Systems. Value Chains. OBJECTIVES: Identify and discuss: AGENDA:

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1 of Business & OBJECTIVES: Identify and discuss: The basic functions of business vs. data; computer literacy versus information systems literacy & system components The flow of information thru a business & how information systems can support this What is a Business? Businesses can be examined via: Value chains Functional areas Levels in organizational chart Their environments 1 3 of Business & Value Chains AGENDA: What is a business? What is information? What is a system? Flow of information thru systems to support business functions SUPPORT ACTIVITIES ADMINISTRATION / INFRASTRUCTURE HUMAN RESOURCES TECHNOLOGY ACCOUNTING / FINANCE develop produce sell deliver service PRIMARY ACTIVITIES 2 4

2 FUNCTIONAL AREAS Specific Environment of an Organization POLICY MGMT MIS ACCTG ADMINISTRATION / OFFICE MGT HUMAN RESOURCES TECHNOLOGY ACCOUNTING / FINANCE CUSTOMERS SUPPLIERS DEVELOP PRODUCE SELL DELIVER SERVICE R&D, ENGIN ETC. Inbound logistics OR/OM& Operations INVENTORY LOGISTICS & OPERATIONS MKTG ADVERTISING SALES MARKETING DISTRIBUTION WAREHOUSE TRANSPORT CUST SUPPORT MAINT / REPAIR ETC. 5 ORGANIZATION STOCKHOLDERS GOVERNMENT COMPETITORS 7 Levels of Management Complex Environment of Organizations GENERAL ENVIRONMENT strategic Technology & Science Customers Suppliers Economy tactical Stockholders Organization Regulators operations / production OPERATIONS MARKETING ACCOUNTING HR International Change Competitors Politics 6 8

3 & The Knowledge Economy Economy: Since the 1970 s the number of white collar workers has exceeded the number of blue collar ones The gap continues to widen Work: More information intensive More knowledge intensive Levels of Management KNOWLEDGE WORKERS: People who create new information or knowledge Roles: Evaluate & Interpret Consult & Advise Change Agent tactical strategic Knowledge and data workers operations / production Examples: Architect Judge Engineer Reporter Manager 9 OPERATIONS MARKETING ACCOUNTING HR 11 LABOR FORCE COMPOSITION 1900-present TYPES OF INFORMATION SYSTEMS KIND OF SYSTEM GROUPS SERVED 70% STRATEGIC LEVEL SENIOR MANAGERS 60% 50% 40% 30% % SERVICE % WHITE COLLAR % BLUE COLLAR % FARMING MANAGEMENT LEVEL MIDDLE MANAGERS 20% 10% 0% KNOWLEDGE LEVEL KNOWLEDGE & DATA WORKERS YEAR OPERATIONAL LEVEL OPERATIONAL MANAGERS 10 SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN MARKETING RESOURCES 12

4 Traditional View: (based on activities) Organize Lead Plan What do Managers Do? Contemporary View: (based on roles) Interpersonal al Decisional Behavior characteristics: high volume high speed >issue oriented lots of meetings >verbal communication CHARACTERISTICS OF INFORMATION The quality of information depends on 3 dimensions: Time: timeliness, currency, frequency, time period Content: accuracy, relevance, completeness, conciseness, scope, performance Form: clarity, detail, order, presentation, media Attributes of Quality What is? DATA VS. INFORMATION Data - Raw Facts e.g., sales = $40,000 - Meaningful and useful form e.g., sales increased 70% Content Dimension Time Dimension Form Dimension The Cube 14 16

5 KEY COMPONENTS OF A SYSTEM KEY COMPONENTS OF A SYSTEM Feedback/ Feedback/ Input Processing Output Input Data Processing Data To Output Store Store KEY COMPONENTS OF A SYSTEM Examples of Technology Supporting a Typical I-P-O Sequence Feedback/ Management Input: Optical scanning of student answer sheets Processing: Calculating scores and letter grades Input land, labor, capital Processing Prod n, market, finace Output Goods & Services Output: Feedback: Producing reports of student performance Generating reports to indicate proper scanning of exam data Store 18 20

6 TYPES OF SYSTEMS Different types of systems include: > Different types of computer hardware systems > Different types of software systems - operating vs application vs productivity tools > Different types of application or information systems: TPS, OAS, KWS, MIS, DSS, ESS, ES, CAD, etc WHAT IS AN INFORMATION SYSTEM? From a business perspective: An organizational and management solution based on information technology to a challenge posed by the environment. This does not necessarily have to be computer-based WHAT IS AN INFORMATION SYSTEM? WHAT IS INFORMATION LITERACY? A set of people, procedures, and resources that collects, transforms, and disseminates information in an organization. This does not necessarily have to be computer-based... Computer literacy address understanding the technical dimension. literacy draws on both the technical and behavioral aspects. Requires understanding of the org and mgmt dimensions of IS

7 Support Activities develop CAD produce Auto. Warehousing Robotics Process Value Chains ADMIN - , Scheduling, Communication Infrastr. Primary activities HR - Benefit, Emp skill inventory systems IS - CASE, Network Performance Analyses ACCTG - PR systems, Profit Analyses sell POS Credit Authorization Mkt Analysis deliver Automated Packing & Shipment Scheduling Package Tracking service Machine Diagnostics 25 We ve covered What is a business? What is information? What is a system? Thinking about the flow of information thru systems to support business functions But add on Different types of systems Need for integration Set the stage for systems development lectures 27 System Concepts Environment One more time Reiterating the Fundamentals of IS and more Signals Feedback Signals by Management Feedback Signals Signals Input of Raw Materials Manufacturing Process Output of Finished Products System Boundary Other 26 28

8 Model Hardware Resources: Machines and Media People Resources: End Users and IS Specialists Input of Data Resources of System Performance Processing Data into Storage of Data Resources Data Resources: Data Knowledge Bases Output of Products Software Resources: Programs & Procedures Types of How do these systems fit into organizations? TPS MIS DSS EIS ES Issues in managing the complexity of an Integrated Architecture Network Resources: Communications Media and Network Support 29 Operations and Management Classifications of of Support Activities System Examples in the Value Chain Operations Support Management Support ADMIN - , Scheduling, Communication Infrastr. HR - Benefit, Emp skill inventory systems IS - CASE, Network Performance Analyses ACCTG - PR systems, Profit Analyses ansaction Process rocessing Enterprise Collaboration Management Decision Support Executive 30 develop CAD Primary activities produce Auto. Warehousing Robotics Process sell POS Credit Authorization Mkt Analysis deliver Automated Packing & Shipment Scheduling Package service Machine Diagnostics 32

9 develop CAD System Examples in the Value Chain SUPPORT ACTIVITIES ADMIN - , Scheduling, Communication Infrastr. HR - Benefit, Emp skill inventory systems IS - CASE, Network Performance Analyses ACCTG - PR systems, Profit Analyses produce Auto. Warehousing Robotics Process sell POS Credit Authorization Mkt Analysis deliver Automated Packing & Shipment Scheduling Package Tracking service Machine Diagnostics System Types Tactical & Operational Planning (DSS & MIS) Reporting (MIS) Transaction System (TPS)...Examples Up The Levels Marketing Long Range Marketing Planning New Product/New Application Planning Customer Service Strategy models Strategic Planning (EIS, DSS, MIS) Marketing Planning e.g., Pricing Sales & Mkt e.g., Market Share Tracking Order Entry Invoicing Call Reporting e.g., Complaint Activity Manufacturing Capacity Planning Process Alternatives Mfg Planning e.g., Performance Standards Mfg e.g., Scrap Shop Floor Reporting Work Order InspectionProcessing e.g.,machine Maintenance...Add Management Levels Patterns Strategic Management Middle Management Operational Management ADMINISTRATION / INFRASTRUCTURE HUMAN RESOURCES TECHNOLOGY ACCOUNTING / FINANCE develop produce sell deliver service Complex Traditionally focused vertically Worldwide reach

10 Patterns TPS Examples Human Resources HR benefits system Missing cross-functional linkages true integration across departments external links Manufacturing Robots are fast and accurate and increasingly able to handle complex tasks Process control: More than power looms The whole production process can be controlled Basic Business Differences Between MIS, DSS and EIS Transaction Processing System (TPS) An System which performs and records the routine transactions necessary to conduct business Tools Data MIS Summation Deviation Averages Overall the Organization DSS Regression Analysis Summation What -if Analysis Selected Sets EIS Drill Down Integration from interna and external sources Broad Fault Tolerant User Interface Batch Reports Interact directly with data Graphical, Simple

11 Types of for Managers and Other Knowledge Workers Which Go Beyond These Levels Management (MIS) Leverage=> identify/collect past due accounts Decision Support (DSS) Leverage=>determining asset mix for portfolio Executive (EIS) Leverage=>general market trend analysis CAD/CAE Virtual reality Expert systems Enterprise Collaboration Other Classifications of of Same Place fferent ace Same Time Face-To-Face Meetings Electronic copy boards Electronic design room tools Team building tools Cross-Distance Meetings Audio conferencing Desktop videoconferencing Screen sharing Teleconferencing Different Times Platforms The Internet Intranets Extranets Other Networks Teams in Place Team room tools Shiftwork Groupware Ongoing Coordination Voice mail Electronic mail Facsimile Group editing Project managers/schedulers Workflow systems 42 Expert Business Knowledge Management Integrated Combination of Strategic 44

12 Establish the information requirements - long and short term Given the different types of systems - how do we go about deciding and planning new system developments? 45 Enterprise wide analysis - focus on org units, functions, processes, and data elements. Determine the type and amount of information needed to support a business process. Who participates in the process. Which processes creates and which uses specific types of data. Critical Success Factors - builds consensus on what must be done right for the org. 47 Create Management Structures to support System Development Corporate Strategic Planning Group - strategic/org plan. IS steering committee - responsible for systems development and operation. Project mgmt team Specific project teams 46 Determine the extent of change in the organization Automation - speed up existing task performance Rationalization of procedures - streamlining some of the SOPs. Business re-engineering - processes/work-flows are analyzed, simplified, and redesigned Paradigm shift - radical rethinking of the business and nature of the organization. 48

13 Recap - In the previous set of slides we examined the following questions: When building information systems: What is information and on what basis do we judge the quality of information being provided? Do all managers need the same level of information quality? Level of management? Functional Area? Value Chain? How does our definition of system affect our design? 49