IS312: INFORMATION SYSTEMS THEORY AND APPLICATIONS LECTURE 2: INFORMATION SYSTEMS AND ORGANIZATIONAL SYSTEMS Information Systems Department.

IS312: INFORMATION SYSTEMS THEORY AND

APPLICATIONS

LECTURE 2: INFORMATION SYSTEMS AND ORGANIZATIONAL SYSTEMS

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OUTLINES

Difference between IS & IT.What is Information Systems (IS)?Components of IS and their relationships.IS and Organizational systemThe importance of IS in Business (effectiveness, efficiency).

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Difference between IS & IT

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Difference between IS & ITInformation Technology usually refers to the underlying hardware and networks used to provide data where and when necessary.

Information Systems usually refers specifically to the process used to transform raw data into information from which decisions may be based.

An information system is designed to collect, process, store and distribute information. Although information systems need not be computerized

NOTES

IS do not need to be computerized

Most IS nowadays are IT-based (IS rely on IT as its core)

Because modern IT enables efficient operations and effective management

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Difference between IS & IT

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What is an IS?

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IS = SOCIO-TECHNICAL SYSTEM

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What is an IS?

An Information System is a socio-technical system comprised of two sub-systems: a technical sub-system and a social sub-system.

• The technical sub-system encompasses the

technology and process components, while the social sub-system encompasses the people and structure components.

• The goal of IS is to provide useful DATA to users.

- IS can be local or global, organizational or enterprise-wide.

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IS four components

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Technical sub-system

3

Technology

4

Process

Social

sub-system

1

People

2Structure

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1 -PEOPLEAll individuals who directly involved in the system include:

• The managers who define the goals of the system• The usersIS specialists: who develop and operate information systems.E.g. System Analysts - Software Developers - System OperatorsOut side vendors: contractors to help in development projects.

Individuals come with a set of skills, attitudes, interests, and bias which need to be considered when designing an IS

System might fail if resisted by the intended user because:

• Individuals feel threatened by the new system.• Resistance to change.• People do not have enough skills.• People have a negative attitude.

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Therefore: users need to get enough

training and get used to the system in order to have a positive attitude

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2 -STRUCTURE

Also called (organizational structure)

It refers to the relationship among the individuals It plays a critical role in IS, Why!! The nature of organizations determines their

activities, the information support they need, and the type of information systems they use.

can be located in one place

or in several place:

global or multinational

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Organizational structure

departmental functional structure» specialize in the delivery of a certain function» typical departments in an organization:

» Accounting» Finance» Marketing and Sales» Production or Operations Management (POM)» Human Resources Management (HRM)» Information Systems and Technology

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IS support at different organizational levels

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Information Infrastructure and TPS

The information systems support of people in organizations

Office Automation and Communication Systems Clerical Staff

Operation Systems Line Managers, Operators

Managerial Systems Middle Managers

Staff SupportKnowledge Workers, Professionals

StrategicSystems

Top Managers

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IS and organizational system

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3 -Technology Definition

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Technology: include hardware, software and telecommunication equipment that is used to capture, process, store and distribute information.

Hardware is the physical equipment—such as a personal computer, a laptop, a portable computing device, and even a modern cell phone—used to process information.

Software is the set of coded instructions (programs) that direct the hardware to perform the required tasks. A typical example is Google Docs—a word processing program designed to instruct a computer to create text documents.

Telecommunication systems are the networking equipment enabling users and devices to communicate. ex: a telephone network, two callers to interact by voice over a distance.

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4 -process

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A process: is the set of steps employed to carry out a specific business or organizational activity.

It maps the set of actions, that must be enacted by staff or organization, to complete an activity.

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4- PROCESS

Consider the job of a grocery store manager and the process he engages in when restocking an inventory of goods for sale. The store manager must:

Check & Identify

Call for Quotations &

Delivery Date

Compare prices and

Dates

Select one or more

Call & Place orders

Receive, Check,

Pay

1. check the inventory of goods for sale and identify the needed items2. call individual suppliers for quotations and possible delivery dates3. compare prices and delivery dates quoted among several 4. suppliers for the same goods5. select one or more suppliers for each of the needed items based on the

terms of the agreement (e.g. availability, quality, delivery)6. call these suppliers and place the orders7. receive the goods upon delivery, checking the accuracy and quality of the

shipped items; pay the suppliers

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4- PROCESS

Note: • There are multiple viable processes that an organization can

design to complete the same activity• The design of the process must fit with the other components

of IS and be adjusted when changes occur. (see next example)

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4- Process

For example, Imagine the grocery store manager purchasing a new software program that enables her to get quotations from all of the suppliers in the nearby regions and place orders . Clearly the preceding process would need to change dramatically, the store manager would need to be trained in the use of the new software program—in other words, changes would also affect the people component.

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IS Components Relationship

Each of the components can affect the success of an IS:

• What if users reject the system and fail to adopt it? (little software results)

• People involved must be trained to make sure that they can carry out the processes (or a different individuals is brought in)

• Existing process must be adjusted with the new IS or develop a new ones

• Designers must evaluate the organizational structure needs to be managed,

• ensuring that appropriate incentives and a reward structure is put in place

• Create or eliminate jobs

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Example 1- case studypayroll system for manufacturing company

• A manufacturing company with 1,200 employees used to pay the employees by checks.

• HR staff check monthly how much each employee should be paid and cut 1,200 checks

• Employee would bring their employee identification cards to HR staff to collect their salary.

• Note that, it is completely manual payroll system.

• One day an ill-advised employee brought a fake identification card and obtains the check which does not belong to him.

• As a result, the company suffers a loss—having to compensate the employee whose check was stolen.

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CONT.- CASE STUDY QUESTIONS

An information system is designed to collect, process, store and distribute information, How these four functions apply to the Payroll system for manufacturing company ?

Is the information systems in the Payroll system for manufacturing company computerized?

No

HR collects working hours, process salary calculations / deductions ,store data of the employees and distribute checks.

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Which IS components are presented in the case study?

1- the automated payroll system, the people component of the system includes:

• the human resources director who wants to enhance an efficient and effective payroll process,

• the human resources staff who maintain the correct employee account information,

• the employees whose salaries will be deposited directly into their account.

CONT.- CASE STUDY QUESTIONS

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2-The organization structure of the HR in the manufacturing company itself.

3- The process of preparing and verifying checks and salaries.

Which IS components are presented in the case study?

CONT.- CASE STUDY QUESTIONS

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• Reacting to this event, the director of HR considers installing a

system that automates the end of month payment process.

• The information of employees’ bank accounts will be stored in the

system and their pay will be directly deposited into their bank

accounts at the end of every month.

• Few months later, the HR director finds out that the payroll system is

still done manually (In other words, the new technology is not being

used)

• After initial investigation, a manager found that there is nothing

wrong with the system.

CONT- CASE STUDY

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• When an employee’s account number is input, the system

will notify the bank to deposit the salary into that account on

every pay day.

• However, upon further investigation, the director discovers

several possible causes for the system’s failure.

• First,the employees are reluctant to provide their bank account information for various reasons, such as not feeling comfortable with releasing their personal information.

CONT- CASE STUDY

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Was the idea of installing a system that automates the end of month payment process good for the information system in the manufacturing company ? How?

Yes, improve efficiency-saves time in preparing and verifying checks & improve effectiveness – by reducing the possibility of lost checks)=> (System’s Objectives), by adding technology component to the system of the automated payroll system mentioned in the first example include:1- hardware : computers and printers2-software: the accounting software application designed to keep track of the salaries and the staff scheduling system designed to keep track of hours worked and how much each employees should be paid

3-telecommunication systems : local and inter-organizational channels of communication and routing equipment designed to connect the company to the bank for automatic money transfers.

Cont.- Case study questions

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Was the new IS implementation successful? Why?

The system fails to achieve its objectives due to the failure of other components (people).

CONT.- CASE STUDY QUESTIONS

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Problems for system failure

Employees

Are reluctant to provide their

account information

When wrong account is entered,

no body in HR is responsible for

rectify the mistakeDo not feel

comfortable with releasing

personal account This discredits the new system, and employees who encounter this

problem no longer want their salaries directly deposited.

Cont.- Case Study

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In our example the IT component seems to be working quite well,

•Hardware: computers and printers

•Software: accounting software & scheduling system for hourly wages

• telecommunication systems: local and inter-organizational channels of communication and routing equipments

yet the organization is not reaping the benefits of the time saved by human resources staff and employees.

Cont.- Case Study Analysis

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TO UNDERSTAND FASTER!!!

Refer to Book_2, chapter (2), p.(23-30) for further

reading

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QUESTIONS ..

Thank you for listening

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