Bcom Information Systems AUGUST 2016

Transcription

1 Bcom Information Systems AUGUST 2016

2 About Me Bryne (Brian) Tagwira Bsc. Computer Science & Maths (1999), MBA UZ, GIBBS Certified Project Management Professional (PMP) Certified IT Service Management (ITIL V3) Certified in Software Testing 17 Years Experience in ICT Software Testing & Development Systems & Business Analysis Project Management ICT Management Part time Lecturing in the MBA & Bcom. Programmes

3 Main Course Objectives Understand the operational & managerial roles of Information Systems Gain an appreciation of the major concepts, developments and managerial implications involved in computer hardware, software, database management and telecommunications technologies understanding of how information technology is used in modern information systems to support the end user collaboration, enterprise operations, managerial decision making and strategic advantage Utilise Information Systems to support decision making

4 AGENDA Information Systems in Perspective Management Information Systems

5 INTRODUCTION - SOME NUMBERS 24% (13m) South Africans on Facebook. (Source: Internet World Stats) 1,024,933.co.za domains registered at present. (source: ZA Central Registry) 49% (26m) South Africans have internet access. (Source: Internet World Stats) Smart phone penetration rate of 46% in South Africa SA Govt ICT Spend for 2014/2015 was R13.6bn. (Source: BMI-T's '2015 ICT in Government' report)

6

7 YOUR THOUGHTS?

8 What is an Information System? An information system (IS) can be any organized combination of people, hardware, software, communications networks, and data resources that collect, transforms, and disseminate information in an organisation. What is a system? A system is a group of interrelated components working together toward a common goal by accepting inputs and producing outputs in an organized transformation process. A system has three basic interacting components or functions. Input: involves capturing and assembling elements that enter the system to be processed. Processing: involves transformation processes that convert input into output. Output: involves transferring elements that have been produced by a transformation process to their ultimate destination. Feedback and Control: Two additional components of the system concept include feedback and control. A system with feedback and control components is sometimes called a cybernetic system, that is, a self-monitoring, self-regulating system. Feedback is data about the performance of a system. Control involves monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goals.

9 Examples of Information Systems

10 Example POS

11 System Concepts Technology That computer networks are systems of information processing components that uses a variety of hardware, software, data and telecommunication technologies. Applications That electronic business and commerce involves interconnected business information systems. Development That developing ways to use information technology in business includes designing the basic components of information systems. Management That managing information technology emphasizes the quality, strategic business value, and security of an organisation s information systems.

12 Information Systems

13 People Information Systems Major Components People are required for the operation of all information system. As a group, these people are referred to as information system users or end users. They can be accountants, salesperson, clerks, engineers, or customers. The structure and design of an information system is defined by another group of people the system designers. Another group of people in the organisation; managers decides how money, time, and other resources should be allocated to design, implement, and maintain the organisation s information systems. Tasks Tasks can be categorised into four areas: tasks related to communication among people in the organisation, tasks related to making decisions within the organisation, tasks related to the operations of the organisation, and tasks related to strategic management of the organisation.

14 Information Information Systems Major Components As a commodity, information refers to facts, statistics, or other data that are valuable or useful to a person for accomplishing a task. These valuable pieces of information are organised and represented in some physical or digital form. Organisation A business or other organisation can be defined by its purpose, the tasks or activities that it performs, and its structure. Environment The global, competitive business environment presents problems and opportunities that a business organisation must cope with to thrive.

15 Information Systems Information Technology In the context of business, these technologies perform five information functions: Acquisition is a process of capturing data about an event that is important to the organisation. Processing is an activity that manipulates and organises information in ways that adds value to the information so it is useful to users. Storage and retrieval is an activity that systematically accumulates information for later use and then locates the stored information when needed. Presentation is the process of showing information in a format and medium useful to the user. Transmission is the process of sending and distributing data and information to various locations.

16 Information Systems Benefits A firm can reap the following benefits: High-quality information. Access to information. Utilisation of information. Perform organisational work efficiently. Better communication and decision-making. Better products and services for customers.

17 Information Systems Types of Information Strategic Information This is information required by managers at the strategic level of management. This type of information is used to develop and act on the long term strategic goals of a business organisation. An example of this kind of strategic information, is should a computer manufacturer enter the mobile phone and tablet pc markets? With tablets and smart phone outselling traditional desktop computers, many computer manufacturers are gearing up and investing heavily in research and development of mobile devices. Tactical Information Information in this category usually deals with short term planning and is used by managers at the control or supervisory level. For example a manager could analyse sales forecasts, inflation data, competitor information etc. Operational Information Information in this category is usually applied in a short period of time, form a few hours to a few days. This type of information is used by managers at the operational level. For example a warehouse manager might at the end of the day, conduct a stock take to determine whether to place an order for new stock.

18 INFORMATION SYSTEMS FOR BUSINESS TRANSACTIONS

19 Transaction Processing System (TPS) A transaction is an event that occurs in any of the primary activities of the company. A transaction processing system (TPS) is a firm s basic accounting and record-keeping system that keeps track of routine daily transactions necessary to conduct business. Transaction processing systems typically involve large amounts of data stored in large databases; they require high processing speeds to manipulate large volumes of data. A transaction processing system must ensure a high level of accuracy and security of the data.

20 Transaction Processing Cycle Transaction processing is a cyclical process with five steps: Entering the data. This involves online data entry or transcribing paper source documents. Data entry can also use electronic data interchange (EDI) to electronically exchange business transactions. Processing the data. Data can be processed in two ways: batch processing or real-time processing. Storing and updating the data. This step involves storing the transaction data in database files. Many large organisations use data warehousing software to create and maintain very large databases containing data on all aspects of the company. Document and report preparation. A transaction processing system produces several types of action documents and reports. An action document initiates an action by the recipient or verifies for the recipient that a transaction has occurred. User inquiry. Managers and other workers can use a database query language to ask questions and retrieve information about any transaction activity.

21 Enterprise Resource Planning Transaction processing systems exist in all functional areas of a business. Each subsystem is itself a transaction processing system. The subsystems exchange information; the output of one subsystem is the input to another subsystem. Organisations constantly look for ways to create cross-functional information systems by reengineering, or combining and integrating, two or more Transaction Processing Systems. This approach of creating information systems to support an organisation s operational business processes is referred to as enterprise resource planning (ERP).

22 WELL KNOWN ERPs

23 Enterprise Resource Planning

24 AUTOMATED INFORMATION SYSTEMS FOR DESIGN AND MANUFACTURING

25 Computer-Aided Design (CAD) Product designers and engineers use computer-aided design (CAD) with computer workstations and software to draw product or process designs on the screen.

26 Computer-Aided Manufacturing (CAM) Computers and other information technology are used to automate the manufacturing process with computeraided manufacturing (CAM). The software in a CAM system retrieves the design specifications of the product from the CAD database; controls specific tools, machines, and robots on the factory floor to manufacture the product; and monitors the overall physical process of manufacturing the product.

27 Computer-Integrated Manufacturing (CIM) Computer-integrated manufacturing (CIM) is a concept, or management philosophy, emphasising the coordination of CAD and CAM systems along with other information systems in the company. Reasons for CAD/CAM Development o Increased productivity due to less time consumption on analysis, data storage and retrieval. o Easy to modify the plans according to requirements. o Possibility of analysing a wide range of design attributes each more thoroughly before selecting the optimum one. o Common database. o Reduces construction costs as computer can generate 3D models at lower cost. o Quick response to customers by shortening the product development cycle. o Improves communication and efficiency between design and manufacturing departments.

28 SECTION 2 MANAGEMENT INFORMATION SYSTEMS

29 Management Information Systems A management information system (MIS) gives a manager the information he or she needs to make decisions, typically structured decisions, regarding the operational activities of the company An MIS provides three types of reports: o Detailed reports o Summary reports o Exception reports Examples of MIS o Sales by region by period o Employees age profile

30 Information Attributes of MIS Relevance: Information that is to be generated by the MIS has to be relevant to the tasks and output expected. Accuracy: Information should be as accurate as is required for the decision to be taken. Inaccuracy within limits may be perfectly acceptable, especially as the higher the accuracy, the more the higher the cost. Also another problem with accuracy is that the more accurate the information, tends to result in longer processing time. Timeliness: In the current competitive environment that business organisations find themselves in, it often expected that high level decisions be taken rapidly to ensure competitiveness. Therefore information generated by the MIS has to be presented to the user within an acceptable time- span. Time to market Fraud prevention Counter Terrorisms Intelligent policing

31 Information Attributes of MIS Target: The information must be compiled and directed at the target audience, for example think of a financial manager, his or her information needs are vastly different from a debtors clerk, the financial manager is not Interested in each individual transaction, but requires information that will enable him or her to see the overall financial picture of the organisation, hence the need for financial statements. Format: The format that the final information is presented in is important in that format and effectiveness of the information go together. Traditional attention to clear report formats can now be supplemented by graphical output such as bar charts and pie graphs. Interactive Nature: Information is provided currently on an interactive basis. The underlying reason is that this allows the presenter to formulate and select relevant pieces of information and to present the information in a sequential manner. Control: Information, especially in the corporate world is often sensitive that is tightly controlled, and much of corporate information is provided on a need to know basis. Without control measures in place, such as user accounts and passwords all of a business organisations data will be available to anyone.

32 INFORMATION TECHNOLOGY TO SUPPORT MANAGERIAL COMMUNICATIONS

33 Collaborative Work A workgroup can be a committee, a single social unit to perform some task. Groupware is software that allows groups of users to share calendars, send messages, access data, and work on documents simultaneously. Many of these applications focus on the concept of work flow the path of information as it flows through a workgroup. However, the advent of the World Wide Web changed the workgroup landscape. Corporations are installing intranets using Hypertext Mark-up Language (HTML), Web browsers, and other Internet technologies that enable managers and employees to access and share the company s internal data and to collaborate on projects easily. Because these intranets are built on standardized protocols like TCP/IP, corporations can open up their intranets to strategic partners and customers, creating extranets.

34 Collaborative Work examples of tools Microsoft Sharepoint Server Microsoft Team Foundation Server IBM Lotus Domino Novell Groupwise Microsoft Project Server Basecamp

35 Distributed Computing In the age of networks, the challenge for a company s chief information officer (CIO) and other information systems managers is to integrate all kinds of computers into a single, seamless system. This approach, often called distributed computing, allows PCs, workstations, networks computers, and mainframes to coexist peacefully and complement each other. Many organisations are adding thin clients network computers, Internet appliances, and similar devices to the mix.

36 The Automated Office An automated office enables individuals, workgroups, and organisations to acquire, process, store, and distribute information electronically using computers and telecommunication networks. Computer conferencing, voice teleconferencing, and video teleconferencing fall under the general category of electronic meeting technologies; they enable members of a workgroup to conduct meetings even when participants are scattered around the world.

37 Inter - organisational Information Systems Another way a company can automate communications and reduce paper flow between itself and its suppliers, customers, and other organisations is through an inter - organisational information system. Such systems use networking and telecommunication technologies that enable a company to share business data and exchange transactions with other companies electronically. Now with cloud computing and prevalence of internet this has been made easier

38 Electronic Data Interchange (EDI) Electronic data interchange (EDI) is the direct, computer-to-computer exchange of standardized, common business transaction documents, such as purchase orders and invoices, between business partners, suppliers, and customers. EDI systems have been developed for particular business partners in specific industries for several decades. Benefits of EDI Speed Data can move directly out of one computer system and into another with little to no delay. Accuracy Errors are reduced because data is not being re-keyed. Error rates from entering data are between.5 3%. On large volumes of transactions, the possibility for the introduction of errors is enormous. Simplicity EDI standards specify how data will be formatted and where it can be found. Security Much less likely to lose information transmitted through EDI than information sent via mail. EDI can be accessed only by authorized users, and then there are audit trails and archives of data. EDI data cannot be easily changed by unauthorized users. It is also not subject to viruses.

39 Electronic Data Interchange (EDI) Electronic data interchange (EDI) is the direct, computer-to-computer exchange of standardized, common business transaction documents, such as purchase orders and invoices, between business partners, suppliers, and customers. EDI systems have been developed for particular business partners in specific industries for several decades. Benefits of EDI Speed Data can move directly out of one computer system and into another with little to no delay. Accuracy Errors are reduced because data is not being re-keyed. Error rates from entering data are between.5 3%. On large volumes of transactions, the possibility for the introduction of errors is enormous. Simplicity EDI standards specify how data will be formatted and where it can be found. Security Much less likely to lose information transmitted through EDI than information sent via mail. EDI can be accessed only by authorized users, and then there are audit trails and archives of data. EDI data cannot be easily changed by unauthorized users. It is also not subject to viruses.

40 Business Alliances A business alliance is a cooperative arrangement between two or more businesses with complementary capabilities. According to the business dictionary ( a business alliance is an arrangement or relationship among independent businesses with corresponding goals, established for a specific purpose and often for reducing costs and Improving customer service. The following are the five basic types: 1. Sales alliance: an agreement to sell products or services that complement one another 2. Solution-specific: an agreement to develop and sell a particular business solution together 3. Geographic-specific: an agreement to market products and services in a particular geographic area together 4. Investment: an agreement to combine funds for shared investment 5. Joint venture: an agreement to share control, profit, and loss in a particular economic undertaking

41 International Information Systems Information technology, especially networks, telecommunications, and the Internet, have made it economically feasible for a company to do business internationally and conduct its business processes virtually anytime and anywhere. Any information system that supports international business activities is called an international information system. What are the challenges posed by developing and deploying international information systems? Language Time zones Alphabetic different Literacy levels Cultural Nuances Different regulations

42 INFORMATION TECHNOLOGY TO SUPPORT MANAGERIAL DECISION MAKING

43 Decision-Making Concepts Decision making is a process that includes four phases: intelligence, design, choice, and implementation. In Intelligence phase, the decision maker examines reality, identifies and defines the problem. In the design phase, a model that represents the system is constructed. This is done by making assumptions that simplify reality and writing down the relationships among all the variables. The model is then validated and criteria are determined in a principle of choice for evaluation of the alternative courses of action that are identified. Often the process of model development identifies alternative solutions and vice versa. The choice phase includes selection of a proposed solution to the model (not necessarily to the problem it represents This solution is tested to determine its viability. When the proposed solution seems reasonable, we are ready for the last phase, implementation of the decision

44 Decision Support Systems A decision support system is an information system application that assists in decision making. These systems are used in planning, analysing alternatives and trial and error search for solutions. DSS incorporate a variety of decision models and are capable of performing What if analysis? DSS differs from traditional information systems in that each decision support system is distinct from the other information system and is customised for every manager. Although decision support systems are created and used by managers they do form part of the firms overall MIS (Management Information System). Decision support systems tend to be designed primarily to serve at the management control level and the strategic planning level. The elements of a decision support system comprise of a database, model base and software providing interactive dialogue.

45 Executive Information Systems An executive information system (EIS) combines features of MIS and DSS to support unstructured decision making by top managers. An EIS has similar design components to a DSS. The EIS data management component provides interactive access to the company s important information, and the model management component provides access to data on the company s critical success factors. An EIS enables the executive to drill down through the available information to the level of detail needed. This ability to access both internal and external information makes an EIS a powerful tool during the intelligence phase of decision making.

46 Expert Systems An expert system (ES) supports decision making by providing managers with access to computerized expert knowledge. An ES is designed to replicate the decision-making process of a human expert. Today s expert systems are based on years of artificial intelligence (AI) research devoted to replicating elusive human cognitive abilities in machines. A knowledge base is similar to the database component in an MIS or a DSS. In addition to facts, a knowledge base contains a system of rules for determining and changing the relationship between those facts. Along with the knowledge base, an ES includes a user interface and an inference engine. The inference engine combines the user input with the knowledge base, applies logical principles, and produces the requested expert advice. Expert systems are difficult to build. To simplify the process, many software companies sell expert system shells generic expert systems containing human interfaces and inference engines. These shells do not include the difficult-to-create knowledge base. Examples in Health Sector

47 Management Information Systems in Perspective Information systems rarely fall cleanly into just one of the categories of MIS, DSS, EIS, or ES. Any specific system can have a mix of their features. Which design features to incorporate into an information system should be chosen based on the communication and decision-making requirements of the managerial users. Poorly designed information systems can hamper a manager s ability to make quality decisions. Some managers complain that these systems provide too much information.

48 INFORMATION TECHNOLOGY TO SUPPORT BUSINESS STRATEGY

49 Strategy Concepts

50 Using Information Systems to achieve competitive advantage Traditional competitors All firms share market space with competitors who are continuously devising new products, services, efficiencies, and switching costs. New market entrants Some industries have high barriers to entry, for example- infrastructure intense business or regulated industry such as healthcare New companies have new equipment, younger workers, but little brand recognition. Substitute products and services Substitutes customers might use if your prices become too high, for example, itunes substitutes for CDs Customers Can customers easily switch to competitor s products? Can they force businesses to compete on price alone in transparent marketplace? Suppliers - Market power of suppliers when firm cannot raise prices as fast as suppliers

51 Strategy Concepts Managers use five strategies to achieve competitive advantage: A cost leadership strategy focuses on providing high-quality products and services at the lowest cost in the industry. A firm can also find ways to help its suppliers or customers reduce their costs or to increase costs of their competitors. A differentiation strategy focuses on providing products and services that are particularly valued and are perceived by customers as uniquely different from the competition. This allows a firm to focus its products or services to give it an advantage in particular segments or niches of market. An innovation strategy emphasizes finding new ways to restructure business processes for producing or distributing products and services or developing unique products and services. A Growth Strategy focuses on expanding a business s capacity to produce goods and services, expanding into global markets, diversifying into new products and services. An Alliance strategy focuses on establishing new business linkages and alliances with customers, suppliers, competitors, consultants and other companies. These linkages may include mergers, acquisitions, joint ventures, forming of virtual companies or other marketing, manufacturing or distribution agreements between a business and its trading partners.

52 Strategy Concepts - Use of IT Lower Costs Use IT to substantially reduce the cost of business processes Use IT to lower costs of customers or suppliers Differentiate Develop new IT features to differentiate products and services. Use IT features to reduce the differentiation advantage of competitors. Use IT features to focus products and services at selected market niche.

53 Innovate Strategy Concepts - Use of IT Create new products and services that include IT components. Develop unique new markets with help of IT Make radical changes to business processes with IT that dramatically cut cots, improve quality, efficiency or customer services or shorten time to market. Promote Growth Use IT to manage regional and global expansion Use IT to diversify and integrate into other products and services

54 Strategy Concepts - Use of IT Develop Alliances Use IT to create virtual organisations of business partners. Develop inter enterprise information systems linked by Internet and extranets that support business relationships with customers, suppliers, and others

55 The Value Chain and Strategic Information Systems The value chain views a firm as a series, chain or network of basic activities that add value to its products and services and thus add a margin of value to the firm. There are five primary activities in the value chain: Inbound logistics receives and stores supplies and materials from the firm s environment and distributes them when and where they are needed in the organisation. Operations use the supplies and materials to create or manufacture the organisation s products and services. Outbound logistics delivers the products and services when and where needed by customers. Marketing and sales investigates customer needs and promotes the value of and sells the products and services in the environment (marketplace). Service maintains and enhances the product or service usefulness to customers through, for example, training and maintenance.

56 The Value Chain and Strategic Information Systems

57 Value Chain Competing on efficiency and effectiveness Efficiency is how primary and support activities produce desired output with less work or lower costs. Effectiveness is how customers evaluate the quality of the output products and services of the value chain. The ways to use information technology to improve efficiency are: Empowering people. Eliminating waste. Using the best-known way to do the work. Automating work. Integrating across functions and organisations.