Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

1. Term: 2009/2010Week 2ITU Management FacultyManagement Information SystemsN. YILDIRIM Information Systems in Business: Organizations, Management andNetworked Enterprise

2. Index – Information Systems in Business: Organizations, Management and the Networked Enterprise (1) INTRODUCTION TO INFORMATION SYSTEMS • Terminology for Information • Data • Valuable Information • Information System • Manegement Information Systems • Role of Information Systems in Change • MANAGEMENT INFORMATION SYSTEMS I) Information Systems in (Global) Business Today • Dimensions of and Influences on information systems • Content of Information Systems • Interrelations between BIS and Organisation • How Businesses Use Information Systems • Digital Economy, Digital Business and Business Models • Strategic business objectives of Information systems • Information Systems in Organizations and Strategy Making • IS Classifications by Functions and Organizational Structures of the Enterprise • Terminology for Information Systems • Information Systems in Social Concept • Contemporary Approaches • Information Society • Trends ITU Management Faculty – MIS

3. Working with Systems • Systems development • The activity of creating or modifying an existing business system • Systems investigation and analysis • Defines the problems and opportunities of an existing system • Systems design • Determine how a new system will work to meet business needs • Systems implementation • Creating and acquiring system components defined in the design • Systems maintenance and review • Checks and modifies the system so that it continues to meet changing business needs ITU Management Faculty – MIS

4. System Development Loop Systems development DEFINING THE PROBLEM : Understanding the current system or need for the system – Requirements List, “Contract”, What is the Gap? Systems analysis Corrective Actions Preventive Actions Revisions Modifications FINDING THE SOLUTION : Designing/Defining the “needed/required” system– Specifications, “How it should be?” Systems design Systems implementation IMPLEMENTING THE SOLUTION : Building, Project, Hands-on work, “Closing the Gap” Documentation Training Structural Change (+Revision) PERFORMANCE EVALUATION : Control, Check, “Measuring the Gap” Systems Review And Audit Systems maintenance and improvement ITU Management Faculty – MIS

5. System Development Project ITU Management Faculty – MIS

6. Terminology • Data • Streams of raw facts • Distinct pieces of information, usually formatted in a special way • Elementary description of things, events, activities, and transactions that are recorded, classified, and stored, but not organized to convey any specific meeting • Information • Data that has been, processed, organized and shaped so that they have meaning, use and value to the recipient • A collection of facts organized in such a way that they have additional value beyond the value of the facts themselves • Knowledge • Information that has been organized and processed to convey understanding, experience and expertise as they apply to a current problem or activity • An awareness and understanding of a set of information and how that information can be made useful to support a specific task • concepts, experience, and insight that provide a framework for creating, evaluating, and using information. • Knowledge base • The collection of data, rules, procedures, and relationships that must be followed to achieve value or the proper outcome • Wisdom • the collective and individual experience of applying knowledge to the solution of problems. ITU Management Faculty – MIS

7. System Development Project PROBLEM Measurement Data Processing Information Knowledge Analysis Decision Action First Outcomes Follow up ITU Management Faculty – MIS

8. System Development Project Population Census of Population Each citizen Computing Population Calculation of Population Growth Comparing with objectives High Population Growth Pop.Planning Public Training Minor Decrease in Pop. Population Records Nr. Of new TC Ids ITU Management Faculty – MIS

9. Terminology • Process • A set of logically related tasks performed to achieve a defined outcome • Process • (n) An executing program. The term is used loosely as a synonym of task. • (v) To perform some useful operations on data. ITU Management Faculty – MIS

10. Information Technology Definition: • the hardware and software a business uses to achieve its objectives. • any machine technology that is controlled by or uses information for operation Example: a programmable industrial robot receiving instructions from a computer-based database ITU Management Faculty – MIS

11. Data People Information Systems Telecommunications Hardware Software Information Systems Components: Data • The raw inputs for entry into information systems • Organized, processed and stored by an IS to support user information needs • Provides basis for qualitative/quantitative analysis ITU Management Faculty – MIS

12. “Data” as an Information System Component (1) Distinct pieces of information, usually formatted in a specialway. All software is divided into two general categories: data and programs. Programs are collections of instructions for manipulatingdata. Data can exist in a variety of forms -- as numbers or text on piecesof paper, as bits and bytes stored in electronic memory, or as factsstored in a person's mind. Data is the plural of datum, a single piece ofinformation.In practice, however, people use data as both the singular and plural form of the word. ITU Management Faculty – MIS

13. “Data”as an Information System Component (2) The term data is often used to distinguish binarymachine-readable information from textual human-readableinformation. Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data). (3) In database management systems, data files are the files that store the database information, whereas other files, such as index files and data dictionaries, store administrative information, knownas metadata. ITU Management Faculty – MIS

14. Types of Data ITU Management Faculty – MIS

15. Data  Information Data Transformation Information Processed Shaped meaningful data Raw Facts ITU Management Faculty – MIS

16. Characteristics of Valuable Information • Characteristics • Accurate • Complete • Economical • Flexible • Reliable • Relevant • Simple • Timely • Verifiable • Accessible • Secure ITU Management Faculty – MIS

17. Information System – Definition andPurpose • Aninformation systemconsists of components that support decision making and control, and helpwith analysis, visualization, and product creation. • An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose “Application”. • Or Collects data, processes it into information then converts information into knowledge for a specific purpose. • A set of interrelated elements or components that collect (input), manipulate (process), and disseminate (output) data and information and provide a feedback mechanism to meet an objective. ITU Management Faculty – MIS

18. Information Systems Procedures - A combination of technical components - Built and used by people to collect, create, and distribute useful data - Used typically in organizational settings but are evolving for personal use ITU Management Faculty – MIS

19. What is an Information System? • An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose. • Like any other system, an information system includes inputs(data, instructions) and outputs (reports, calculations). It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation. Feedback Input Processing Output Model of an information system ITU Management Faculty – MIS

20. Information System Is A System ITU Management Faculty – MIS

21. Input, Processing, Output, • Input • The activity of gathering and capturing data • Whatever goes into the computer • Processing • Converting or transforming data into useful outputs • Output • Useful information, usually in the form of documents and/or reports • Anything that comes out of a computer ITU Management Faculty – MIS

22. Input (n) Whatever goes into the computer. Input can take a variety of forms, from commands you enter on a keyboard to data from another computer or device. A device that feeds data into a computer, such as a keyboard or mouse, is called an input device. (v) The act of entering data into a computer ITU Management Faculty – MIS

23. Output (n) Anything that comes out of a computer. Output can be meaningful information or gibberish, and it can appear in a variety of forms -- as binary numbers, as characters, as pictures, and as printed pages. Output devices include display screens, loudspeakers, and printers. (v) To give out. For example, display screens output images, printers output print, and loudspeakers output sounds. ITU Management Faculty – MIS

24. Feedback • Feedback • Output that is used to make changes to input or processing activities • Feedforward • A proactive approach to feedback • Use for estimating future sales or inventory needs ITU Management Faculty – MIS

25. Data  Information Data Transformation Information Information System Processed Shaped meaningful data Raw Facts 331 Coca Cola 1lt 1,45 521 Lipton Ice Tea 1lt 1,20 332 Rodeo Bar 40gr 0,40 185 Vernel 3lt 5,25 Sales Region: Atasehir Store : BIM Item NoDescriptionUnits Sold 331 Coca Cola 1lt 1 Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory. ITU Management Faculty – MIS

26. Management Information Systems • MIS is an organized collection of ; • People, • Processes, • Hardware - Devices • Software, • Databases, That are used to provide “information” todecision makers in all levels. • The vast majority of information systems are developed for and used by people in functional areas (e.g., manufacturing, human resources, accounting, finance and marketing). • To develop information systems that address the needs of the organization, MIS professionals must possess a solid mix of business and technical knowledge. They must understand; • organizational structures, • objectives, • operations (including processes and the flows of data between processes) • and the financial implications related to these factors. * MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems. ITU Management Faculty – MIS

27. Information Systems: Turn Data into Information Suppliers Customers ENVIRONMENT ORGANIZATION Data Information FEEDBACK Stockholders Competitors • Raw material • Unformatted information • Generally has no context Classify Arrange Calculate • Processed material • Formatted information • Data given context ITU Management Faculty – MIS

28. Dimensions of information systems • Organizations – The key elements of an organization are its: • People • Structure • Business processes • Politics • Culture • 􀂃 Management • 􀂃 Technology • It isn’t just a technology: A Business perspective on information systems • Complementary assets: Organizational capital and the right business ITU Management Faculty – MIS

29. Application Hardware Software Data People Computer Based Information System • Hardware • Software • Data/Bases • Network/Telecom • Procedures • People More than hardware and software Together they are configured to collect, manipulate, store, and process data into information ITU Management Faculty – MIS

30. Influences on Information System • IS on the core – Building the Links Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment. ITU Management Faculty – MIS

31. Influences on Information System • IS on the core – Building the Links ITU Management Faculty – MIS

32. Content of Information System • Widening Scope and Evolution of Information Systems • There is a growing interdependence between a firm’s information systems and its business capabilities. • Changes in strategy, rules, and business processesincreasingly require changes in hardware, software,databases, and telecommunications. Often, what theorganization would like to do depends on what itssystems will permit it to do. ITU Management Faculty – MIS

33. Business Processes Supply Chain Management Enterprise Management Customer Management Knowledge Management Firm Profitability And Strategic Position Data Collection and Storage Transformation Into Business Systems Dissemination Modelling and Decision Making Planning Coordinating Controlling Information Processing Activities Management Activities Business Value Content of Information Systems • A Business Perspective on Information Systems – The business Information Value Chain ITU Management Faculty – MIS

34. Content of Information Systems – Extended Enterprise • As IT continue to deploy multiple complex, mobile and distributed systems, the processing and managing of information in enterprises becomes costly and complicated. ITU Management Faculty – MIS

35. Business Information Systems • The interactive relationships between the information systems and organizations, both technically and socially, and the business opportunities and challenges brought about by the BIS. • This describes information systems used to support the functional areas of business. “ Since the advent of the mainframe in the 1950s, companies have dreamed of “using computers to manage their businesses”. But early efforts came up short, with technology that was too costly or too clunky. Now, thanks to the Net and dashboards, those dreams are starting to come true. Forrester Research Inc. estimates that 40% of the 2,000 largest companies use the technology.” ITU Management Faculty – MIS

36. Mediating Factors Environment Culture Structure Business Processes Politics MANAGEMENT DECISIONS Interrelations between BIS and Organisation Impact of Information Systems on Organizations • Economic impacts • Organizational and behavioral impacts • IT flattens organizations • Postindustrial organizations • Understanding organizational resistance to change • The Internet and organizations • Implications for the design and understanding of information systems This complex two-way relationship is mediated by many factors. ITU Management Faculty – MIS

37. INTERDEPENDENCE HARDWARE BUSINESS Strategy Rules Procedures SOFTWARE DATABASE TELE-COMMUNICATIONS ORGANIZATION INFORMATION SYSTEM Interrelations between BIS and Organisation ITU Management Faculty – MIS

38. Digital Economy – “New” Economy • E-Business: The use of electronic technologies to transact business. • Collaboration: People and Organizations interact, communicate, collaborate and search for information • Information Exchange: Storing, processing and transmission of information. ITU Management Faculty – MIS

39. Digital Business Telecommunications Networks Field Sales Internet In-office Consumer ITU Management Faculty – MIS

40. The Old Economy – Taking Photo’s • Buy film in a store • Load your camera • Take pictures • Take roll of film to store for processing • Pickup the film when ready • Select specific photos for enlargement • Mail to family and friends ITU Management Faculty – MIS

41. The New Economy – Taking Photo’s • 1st Generation Digital Photography • Old economy except 6 and 7 were replaced by using a scanner and emailing • 2nd Generation Digital Photography • Use a Digital Camera, no film, no processing. • 3rd Generation Digital Photography • Your Digital Camera is now your mobile phone, in your binoculars or a palmtop computer. ITU Management Faculty – MIS

42. Business Models • A business model is a method of doing business by which a company can generate revenue to sustain itself. The model spells out how the company adds value to create a product or service. (Value Chain) • Nokia makes and sells cell phones • A TV station provides free broadcasting. Its survival depends on a complex model involving advertisers and content providers. • Internet portals, such as Yahoo, also use a complex business model. ITU Management Faculty – MIS

43. Digital Age Business Models • Name-Your-Own Price • Reverse Auctions • Affiliate Marketing • E-Marketplaces and Exchanges • Electronic aggregation (buying groups) ITU Management Faculty – MIS

44. Drivers Forcing Changes In Business Models Business Pressures • Environmental, organizational, and technological factors are creating a highly competitive business environment these factors or forces can change quickly, sometimes in an unpredictable manner. • Therefore, companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment. A response can be a reaction to a pressure already in existence, an initiative intended to defend an organization against future pressures, or an activity that exploits an opportunity created by changing conditions. Business Critical Response Activities ITU Management Faculty – MIS

45. Business Pressures on an Organization that force change. ITU Management Faculty – MIS

46. IT – enabled Organizational Responsesto Business Pressures • Strategic Management & Systems • Continuous Improvement – Operational Efficiency • Restructuring business processes • Manufacturer to order, Mass-Customization • Customer Focus Strategy • Electronic business • Business Alliances ITU Management Faculty – MIS

47. Strategic business objectives ofinformation systems • Operational excellence: Achieve operational excellencethrough higher levels of efficiency and productivity • New products, services, and business models: Create newproducts, services, and business models • Customer and supplier intimacy: Raise revenue andprofitswhile lowering costs by increasing customer and supplierintimacy • Improved decision making: Improve decision making formanagers andemployees • Competitive advantage: Increase competitiveadvantages • Survival: Insure survival caused bybusinessenvironmentchanges ITU Management Faculty – MIS

48. Strategic business objectives of information systems • Operational excellence: Achieve operational excellencethrough higher levels of efficiency and productivity • Improved efficiency results in higher profitability • Information systems and technologies help to improve higher levels of efficiency and productivity Case Study: Wal-Mart • the champion of combining information systems and best business practices to achieve operational efficiency—and $285 billion in sales in 2005 • the most efficient store in the world as a result of digital links between its suppliers and stores ITU Management Faculty – MIS

49. Strategic business objectives of information systems • Operational excellence:Case Study: Wal-Mart • It is all-purpose chain store all around America. They sell many products such as: electronics, movies, music, books, toys, jewelry, sporting goods, home appliances, garden and patio accessories, video games, apparel, gifts, pharmacy, and home craft/furniture. • uses on time shipments.  They don’t keep high inventory in their back rooms, saving on storage.  When inventory in the store starts running out, the system notifies them to order more stock.  Another business process that they use is sales.  • They save money with their inventory, faster customer service, using self check, and eliminating baggers saves on labor cost. Technology also helps the cashiering with better computer systems there will be fewer errors. • The Information Systems Division (ISD) supports the world’s largest non-governmental database ITU Management Faculty – MIS

50. Strategic business objectives ofinformation systems • New products, services, and business models: Create newproducts, services, and business models • Information systems and technologies enable firms to create new products, services, and business models • A business model includes how a company produces, delivers, and sells its products and services • Case Studies: • The music industry has seen drastic changes in business models in recent years • Apple has been very successful at introducing new products and adopting a new business model ITU Management Faculty – MIS