IT FOR BUSINESS AND FINANCE. BUSINESS PROCESSES and INFORMATION SYSTEMS

Transcription

1 IT FOR BUSINESS AND FINANCE BUSINESS PROCESSES and INFORMATION SYSTEMS

2 SYSTEM (definition) A group of interacting, interrelated, or interdependent elements forming a complex whole presenting the following characteristics : composed of a set of separately identifiable elements significant interactions between the elements constituting the system itself; The presence of targets or goals that guide the behavior of the system 2 ICT in Business and Finane

3 DATA AND INFORMATION DATA: Information in raw or unorganized form (such as alphabets, numbers, or symbols) that refer to, or represent, conditions, ideas, or objects. Data is limitless and present everywhere in the universe INFORMATION: raw data presented within a context that gives it meaning and relevance, and which leads to increase in understanding and decrease in uncertainty. The value of information lies solely in its ability to affect a behavior, decision, or outcome KNOWLEDGE: Human faculty resulting from interpreted information; understanding that germinates from combination of data, information, experience, and individual interpretation 3 ICT in Business and Finane

4 DATA and INFORMATION Just an example: Fabio Palmieri 9975 two seemingly meaningless data But if these data are provided to a request of information as : Which is the extension of the project manager of Technical Team working on Market Risk Management in MPS? Data are supposed to be processed, elaborated and interpreted in order to give much more information and knowledge 4 ICT in Business and Finane

5 WHY DATA? It s the easiest way to store information Data are more consistent than other parts of the System (Processes, Technology, Organization), Banks are required to keep online data for ten years... In human activities information are managed in different way as ideas, languages, books and so on, but in standardazed activities there are standard and common way to accomplish this task (i.e. fiscal code instead of name...) 5 ICT in Business and Finane

6 INFORMATION MANAGEMENT STEPS AQUISITION STORING RETRIEVING, ELABORATING, PRODUCING DISTRIBUTION, COMMUNICATION, SHARING 6 ICT in Business and Finane

7 Knowledge Sharing Cycle How is data transformed into information? How is information transformed to knowledge? How is tacit and explicit knowledge converted into information? How is information converted into data? 7 ICT in Business and Finane

8 INFORMATION SYSTEM the term information system is frequently used to refer to the interaction between people, processes, data and technology. An information system is a type of socio-technical system, so an information system is a mediating construct between actions and technology An information system can also be considered a semi-formal language which supports human decision making and action It refers to the wider systems of people, data and activities, both computer-based and manual, that effectively gather, process, store and disseminate organization information 8 ICT in Business and Finane

9 INFORMATION SYSTEM A set of interrelated components that collect, manipulate, and disseminate data and information and provide feedback to meet an objective Examples: ATMs, airline reservation systems, course reservation systems 9 ICT in Business and Finane

10 Information Systems not Computer Science Information systems, as a discipline, focuses on exploring the interface between management, information science and computer science. Computer Science focuses on information technology: software. Information Systems mediates the two opposing worlds of human activity systems and information technology. 1 0 ICT in Business and Finane

11 IS are more then Computers Systems perspectives on information systems 1 1 ICT in Business and Finane

12 Components of a system IS vs. IT Payroll System INFORMATION TECHNOLOGY Hardware Software Databases are used to build INFORMATION SYSTEMS Inventory System Networks Other related components Marketing System 1 2 ICT in Business and Finane Customer Service System

13 Information System processing Information systems (IS) collect, process, store, analyze, and disseminate information for a specific purpose. INPUT PROCESSING OUTPUT data info instruction Program People Equipment storage Solutions Reports Graphic etc CONTROL decision making auto control 1 3 ICT in Business and Finane

14 INFORMATION COMMUNICATION TECHNOLOGY Set of tools, processes, and methodologies (such as coding/programming, data communications, data conversion, storage and retrieval, systems analysis and design, systems control) and associated equipment employed to collect, process, and present information. In broad terms, IT also includes office automation, multimedia, and telecommunications. WHAT IS USED FOR? allows users to participate in a rapidly changing world in which work and other activities are increasingly transformed by access to varied and developing technologies. By this definition, you could almost say ICT is technology's version of economic growth, to satisfy the needs and wants of the community over time 1 4 ICT in Business and Finane

15 INFORMATION SYSTEM OF AN ENTERPRISE Component (subsystem) of a organization that manages acquires develop, preserve, produce) information of interest (ie used to achieve organization goals) The information system consists of multiple elements (procedures, resources, people, etc..). The interactions become determinant to achieve the targets of system The information system is defined as a set of factors that detects systematic and organized economic phenomena important for the company, using the most appropriate technology and applying logic and methods suggested by business administration. 1 5 ICT in Business and Finane

16 INFORMATION SYSTEM AND ORGANIZATION SYSTEM Information System is part of Organization System Information System supports business decision making providing and managing information processes Organization Decision System Decisions Information Information System 1 6 External data Resources Money Information People Materials ICT in Business and Finane Production System Subsystems Output

17 COMPUTING SYSTEM AND ORGANIZATION SYSTEM Enterprise Information Systems provide a technology platform that enables organizations to integrate and coordinate their business processes. They provide a single system that is central to the organization and ensure that information can be shared across all functional levels and management hierarchies. Organization Decision System Decisions Information Information System External data Resources Money Information People Materials Production System Subsystems Output 1 7 ICT in Business and Finane

18 EX: EMERGENCE OF A DIGITAL FIRM 1 8 ICT in Business and Finane

19 INTEDEPENDENCE: IS AND ORG Interdependence between Information system and Type of Business: ORGANIZATION INFORMATION SYSTEM 1 9 ICT in Business and Finane

20 INFORMATION PRODUCTION PROCESS: STEPS Data: raw facts Information: A collection of facts organized in such a way that they have additional value beyond the value of the facts themselves. 1 step: Acquisition raw data 2 step: From raw data to processed and aggregated data Processed data Acquisition data data Acquisition data processing Publish Acquisition data data Raw data information Final User 2 0 ICT in Business and Finane 3 step: producing Information

21 FOCUSING... Information is a processed data, whose elaboration gave meaning and importance for the final user and for his success in his job and his decision making process Information are producted to be used by the final user they are addressed to Projecting a IS starts identifying the needs of users, so the information users would like to receive, then goes back to determine the producing process, considering the content and the presentation needs. Content Determines.. Information required Process of Producing Information Considering.. Presentation types 2 1 ICT in Business and Finane

22 PUSH APPROACH In the case of technologies very innovative or introduced for the first time in the enterprise IT team suggests solutions and opportunities that the useres would no catch by themselves beacuse of the tha lack of knowledge of extra power given by the the new platform PULL APPROACH Well known technologies Applications in the enterprise are consolidated Users explains their needs and IT team tries to find solutions 2 2 ICT in Business and Finane

23 PRODUCING INFORMATION Going to the top of pyramid information are more aggregated and summarized Summarized data Top Management Detailed data Operational desk 2 3 ICT in Business and Finane

24 COMPUTING SYSTEM FOR ICT: HISTORY First stage: Using the technology of storage systems for specific applications, especially in business administration and accounting, aiming the goal of automating those activities that require systematic and repetitive processing of large amounts of data Second stage: Since the early 70ies, use of technology systems to manage databases that allowed implementation of computer systems supporting every level of organizations Third Stage: Since the late 80ies, use of network technologies for implementation of managing systems of database distributed locally or geographically Fourth stage: Since the early 90ies, use of Web technology : ICT 2 4 ICT in Business and Finane

25 IMPORTANCE OF ICT IN BUSINESS MONEY MANAGEMENT: Large part of budget is for IT investment. In US over 2000 Billions $ are spent every year, it s over 50% of whole amount. TYPE OF BUSINESS: Fundamental for any business, some were born thanks to IT itself (ebay, Amazon etc etc) PRODUCTIVITY: Increase productivity. FED economists stated that US inflation decreased of 0.5% due to IT investement during 1995 and 2000 period. Average growth of productivity has been 2.7% starting from 1995 instead of 1.4% during period. STRATEGIC OPPORTUNITIES: overcome competitors 2 5 ICT in Business and Finane

26 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Major Types of Systems Executive Support Systems (ESS) Decision Support Systems (DSS) Management Information Systems (MIS) Transaction Processing Systems (TPS)

27 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Systems

28 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business processes Business Processes and Information Systems Manner in which work is organized, coordinated, and focused to produce a valuable product or service Concrete work flows of material, information, and knowledge sets of activities

29 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Unique ways to coordinate work, information, and knowledge Ways in which management chooses to coordinate work

30 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Traditional View of the Systems

31 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Transaction Processing Systems (TPS): Basic business systems that serve the operational level A computerized system that performs and records the daily routine transactions necessary to the conduct of the business

32 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Types of TPS Systems

33 System Architecture: Transaction Processing System

34 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Major functions of systems: Financing and Accounting Systems Budgeting, general ledger, billing, cost accounting Major application systems: General ledger, accounts receivable, accounts payable, budgeting, funds management systems

35 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Sales and Marketing Systems Major functions of systems: Sales management, market research, promotion, pricing, new products Major application systems: Sales order info system, market research system, pricing system

36 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Manufacturing and Production Systems Major functions of systems: Scheduling, purchasing, shipping, receiving, engineering, operations Major application systems: Materials resource planning systems, purchase order control systems, engineering systems, quality control systems

37 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Major functions of systems: Human Resource Systems Personnel records, benefits, compensation, labor relations, training Major application systems: Payroll, employee records, benefit systems, career path systems, personnel training systems

38 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems Figure 2-11

39 Figure 2-3 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Payroll TPS

40 System Example: Payroll System (TPS)

41 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Overview of Inventory Systems

42 Management Information System (MIS) An MIS provides managers with information and support for effective decision making, and provides feedback on daily operations. MIS provides information to the users in the form of reports Output, or reports, are usually generated through accumulation of transaction processing data. MIS is an integrated collection of subsystems, which are typically organized along functional lines within an organization. 42

43 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Management Information System (MIS): Management level Inputs: High volume data Processing: Simple models Outputs: Summary reports Users: Middle managers Example: Annual budgeting

44 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Structured and semi-structured decisions Report control oriented Past and present data Internal orientation Lengthy design process Management Information System (MIS)

45 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Management Information System (MIS) Figure 2-5

46 System Architecture: Management Information System

47 MIS Management Information System Creates reports managers can use to make routine business decisions Scheduled reports Key-indicator reports Exception reports Ad hoc (demand) reports Drill-down reports

48 Scheduled Reports Produced periodically, or on a schedule (daily, weekly, monthly). 48

49 Key-Indicator Report Summarizes the previous day s critical activities and typically available at the beginning of each day.

50 Demand Report Gives certain information at a manager s request. Exception Report Automatically produced when a situation is unusual or requires management action. 50

51 Drill Down Reports Provide detailed data about a situation. 51

52 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Decision Support System (DSS): Management level Inputs: Low volume data Processing: Interactive Outputs: Decision analysis Users: Professionals, staff Example: Contract cost analysis

53 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Decision Support System (DSS)

54 Four Types of Models

55 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Decision Support System (DSS) Figure 2-

56 Top level management Designed to the individual Ties CEO to all levels Very expensive to keep up Extensive support staff KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Executive support system (ESS)

57 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Executive Support System (ESS): Strategic level Inputs: Aggregate data Processing: Interactive Outputs: Projections Users: Senior managers Example: 5-year operating plan

58 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Executive Support System (ESS)

59 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Cross-Functional Business Processes Transcend boundary between sales, marketing, manufacturing, and research and development Group employees from different functional specialties to a complete piece of work Example: Order Fulfillment Process

60 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES The Order Fulfillment Process Figure 2-12

61 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Types of Information Systems

62 TYPES OF INFORMATION SYSTEMS

63 INTERRELATIONSHIPS AMONG SYSTEMS

64

65 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Knowledge Work Systems (KWS): Knowledge level Inputs: Design specs Processing: Modeling Outputs: Designs, graphics Users: Technical staff Example: Engineering work station

66 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Information systems help organizations Achieve great efficiencies by automating parts of processes Rethink and streamline processes

67 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC

68 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Examples of Business Processes Finance and accounting: Paying creditors, creating financial statements, managing cash accounts Human Resources: Hiring employees, evaluating performance, enrolling employees in benefits plans

69 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Examples of Business Processes Manufacturing and production: Assembling product, checking quality, producing bills of materials Sales and marketing: Identifying customers, creating customer awareness, selling

70 Some ERP Software Vendors

71 Commonalities Among ERP Systems Integrate data: Enter data once; access everywhere Operate in Client/Server Environment Based on Objects: Uses object-oriented approach Easy to extend Employ Tables: System configuration table: Defines how the system is set up Control table: Defines functions that help the user Does not allow a non-existing product to be purchased Application data table: Content-related data

72 Advantages of ERP Elimination of costly, inflexible legacy systems Single integrated system Improvement of work processes Support best practices: Most efficient and effective way of carrying out a business process Increase in access to data for operational decision making A sale is reflected in inventory control Upgrade of technology infrastructure Uniform platform

73 Disadvantages of ERP Expense and time in implementation Difficulty integrating with other systems Risks in using one vendor