1. What is IS? P. Pete Chong Martel Corp Prof of CIS University of Houston-Downtown

2. What is Information? • Supports Decision • Anything that does not support decision is only data • What is Decision? Why Decision?

3. Must Come Out Ahead • Profit = Revenue - Cost • Profit = Benefit - Cost • The goal is to increase profit, not just to decrease cost or increase benefit

4. Rational Decisions • For Profit > 0, Benefit/Cost > 1 • This ratio makes a RATIOnal decision • Decision can then be reduced to: IF (B/C > 1) THEN Do ELSE Don’t Do ENDIF

5. Wrong Decisions? • IF (Value > Threshold) THEN… • Use wrong decision criteria • False assessment of values • IF(B/C > 1) THEN… • Benefit = SS Bij P(Bij) • Cost = SS Cij P(Cij)

6. Information System IS Decision Support System • Management: Allocation of Resources • Information: Data Analysis • Systems: Information Technology (narrow), Organization Restructure (broad)

7. Pete’s Pet Rules • The 70% Rule • The 5% Rule • Modular Combination • The 80/20 Rule

8. The 70% Rule Benefit to self comes from benefit to clients – customer-centered approach

9. The 5% Rule Things are processed only 5% of time – increase productivity by reduce waiting time

10. Modular Combination Any solution is a combination of existing solutions

11. The 80/20 Rule Significant Few vs. Trivial Many

12. System Development Life Cycle (SDLC) • Enterprise View • Requirements Analysis • Logical Design • Physical Design • Implementation/Testing

13. Enterprise View Define goals

14. Requirements Analysis • What does it take? • Identify Critical Success Factors from interview, and study documents and forms.

15. Logical Design • Organize by relevance and usage • Create a “system on paper” • Assume “prefect technology”

16. Physical Design • Find the “right” tools • Modify LD result to fit reality

17. Implementation and Testing • Coding and testing

18. Benefits of Using SDLC • Separation of Managerial Issues from Technological Issues • Results of Logical Design is stable (change little over time) and portable (may be implemented using many different tools)

19. Effectiveness vs. Efficiency • Goal definition and factor identification are effectiveness issues • ORGANization is an efficiency issue

20. IS Impact: Value Chain View • Inbound Logistic • Process • Outbound Logistic • Marketing and Sales • Customer Service

21. IS Impact: SDLC View • Automation • Rationalization • Reengineering • Paradigm Shift

22. Automation • Standard Operation Procedures • Quick and measurable benefit

23. Rationalization • Streamlining the process • Remove unnecessary steps • With automation and increased reliability, the elimination of monitoring system (source of security problems?)

24. Reengineering • Accomplish the same goal with different means • Replace qualitative decision criteria with quantitative ones

25. Paradigm Shift Changing goals, either contract or expand