Slide 2-1 Chapter 2 Information Systems in Organizations Introduction to Information Systems Judith C. Simon.

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Chapter 2Chapter 2

Information Systems in Organizations

Introduction to Information Systems

Judith C. Simon

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contained herein."contained herein."

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Chapter 2 Major TopicsChapter 2 Major Topics

Common types of information systemsCommon types of information systems Strategic and other managerial uses of information Strategic and other managerial uses of information

systemssystems Strategic decisions related to information systemsStrategic decisions related to information systems Functional uses of information systemsFunctional uses of information systems New concerns because of information technologyNew concerns because of information technology

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Transaction Processing System (TPS)Transaction Processing System (TPS)

Transaction: some business activity, such as the Transaction: some business activity, such as the sale of a product or servicesale of a product or service

TPS was one of the first types of business TPS was one of the first types of business information systems to be developedinformation systems to be developed

TPS maintains records of business transactions TPS maintains records of business transactions and analyzes the data to provide desired outputand analyzes the data to provide desired output

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Transaction Processing SystemsTransaction Processing Systems

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Batch ProcessingBatch Processing

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All transactions will be checked as a group without human interaction.

Transactions of mail-order purchases via credit card

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Online ProcessingOnline Processing

These transactions require human interaction.

Invalid credit card numbers are checked by clerks

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Information Reporting SystemInformation Reporting System

One of the first forms of One of the first forms of managementmanagement information information systemsystem

Developed initially to provide reports to Developed initially to provide reports to management based on transaction processing management based on transaction processing systemssystems Examples of reports: inventory quantities available for Examples of reports: inventory quantities available for

each product, processing costs, product sales per each product, processing costs, product sales per produce or per sales representative, exception reportsproduce or per sales representative, exception reports

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Information Reporting SystemsInformation Reporting Systems

Dear Sir:

This letter is to inform you of the Information Report Systems Exampthat where used are now

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Management Levels and Decision TypesManagement Levels and Decision Types

Top management:Top management: Makes “Makes “strategicstrategic” decisions; does long-term planning; ” decisions; does long-term planning;

typically uses more external data than other levelstypically uses more external data than other levels

Middle management:Middle management: Makes “Makes “tacticaltactical” decisions; does shorter-term planning ” decisions; does shorter-term planning

than top management; converts top management than top management; converts top management desires into action plansdesires into action plans

Lower management:Lower management: Makes “Makes “operationaloperational” decisions; uses more detailed ” decisions; uses more detailed

internal data than other levels; has more structured internal data than other levels; has more structured decisions than other levelsdecisions than other levels

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Managerial Uses of InformationManagerial Uses of Information

Top Management

Strategic Decisions

Middle ManagementTactical Decisions

Lower ManagementOperational Decisions

Information systems provide managers at different levels with decision-making information.

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Functional Uses of IS - Examples Functional Uses of IS - Examples

Human resources IS: handles pre-employment Human resources IS: handles pre-employment activities and employee dataactivities and employee data

Accounting/Financial IS: maintains transaction Accounting/Financial IS: maintains transaction records, e.g., for receivables and payables, as well as records, e.g., for receivables and payables, as well as data for budgeting and financial planning data for budgeting and financial planning

Marketing/Sales IS: used for such activities as Marketing/Sales IS: used for such activities as advertising decisions, order management, trends advertising decisions, order management, trends analysisanalysis

Production/Operations IS: handles creation of Production/Operations IS: handles creation of products and services and methods of providing these products and services and methods of providing these items to othersitems to others

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Human Resources ActivitiesHuman Resources Activities

Strategic

Check external databases for citybeing considered in expansion plansto determine skill levels of potential employees.

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Human Resources ActivitiesHuman Resources Activities

Tactical

Analyze database of performancerecords of current employees to assistin developing training program for thenext six months

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Human Resources ActivitiesHuman Resources Activities

Operational

Complete on-screen evaluation forms ofemployee performance

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Cross-Functional RelationshipsCross-Functional Relationships

Cross-functional relationships have become a Cross-functional relationships have become a major part of IS developments, with multiple major part of IS developments, with multiple functions working together to produce the best functions working together to produce the best resultresult

Supply chainSupply chain: sequence of processes and partners : sequence of processes and partners that deliver products and services to a customerthat deliver products and services to a customer

Demand chainDemand chain: handling customer product or : handling customer product or service demandsservice demands

Value chainValue chain: entire process from initial demand : entire process from initial demand through supplying of product or servicethrough supplying of product or service

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Global ConcernsGlobal Concerns

Businesses today must expect work and trade to Businesses today must expect work and trade to occur around the world and around the clock and occur around the world and around the clock and must plan and make strategic decisions must plan and make strategic decisions accordinglyaccordingly

Businesses must be knowledgeable about Businesses must be knowledgeable about technology issues in working with other countries technology issues in working with other countries to determine the best combinations of locationsto determine the best combinations of locations

Local businesses must realize that they are are Local businesses must realize that they are are competing globally even if they do not have competing globally even if they do not have physical facilities in other countriesphysical facilities in other countries

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A Global Concern is ...A Global Concern is ...

Businesses can now compete with your organization worldwide

regardless of their home location.

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Ethical IssuesEthical Issues

Business ethics refers to professional standards of Business ethics refers to professional standards of conduct.conduct.

Ethical issues includeEthical issues include Privacy, primarily concerned with keeping confidential Privacy, primarily concerned with keeping confidential

data confidentialdata confidential Security, including protection of data, hardware, and Security, including protection of data, hardware, and

softwaresoftware Accuracy, ensuring that data cannot be changed without Accuracy, ensuring that data cannot be changed without

authorizationauthorization Ownership, also referred to as intellectual property, Ownership, also referred to as intellectual property,

identifying clearly who has the rights to items developed identifying clearly who has the rights to items developed and protecting those rightsand protecting those rights

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An Ethical Concern is ...An Ethical Concern is ...

Technology’s rapid developments have outpaced the creation of laws

and guidelines for appropriate behavior in using and developing the

technology.

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Social IssuesSocial Issues

Social issues are related to maintaining or Social issues are related to maintaining or improving the quality of life.improving the quality of life.

Social issues related to computer use includeSocial issues related to computer use include working conditionsworking conditions educationeducation environmental protectionenvironmental protection health carehealth care public transportationpublic transportation

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A Social Concern is ...A Social Concern is ...

Technology can increase the capability of studying social issues but

can also cause new issues to arise, such as waste of natural resources.

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