Chapter 2 Information Technologies

1. Chapter 2Information Technologies Concepts and Management

2. Case: Building an e-Business at Fed Ex • Problem • FedEx has kept looking ahead at every stage for opportunities to meet customers’ needs for fast, reliable, and affordable overnight deliveries. • Solution • In addition to e-Shipping Tools, FedEx is now providing integrated solutions to address the selling & supply chain needs of its customers. • Results • FedEx’s e-business model facilitates better communication and collaboration between the various parties along the supply chains. • It promotes efficiency gains by reducing costs & speeding up the order cycle. • It transforms organizations into high performance e-businesses.

3. Several different information systems can exist in one organization. A particular information systemmay be composed of several separate informationsystems. Information systems are connected by means of electronic networks. Interorganizational information systems involve information flow in two or more organizations. An enterprisewide system or interorganizational information system is composed of large & small computers & hardware connected by different types of networks. Characteristics of Information Systems

4. IS: Concepts &Definitions Source:Steven Alter, Information Systems: A Management Perspective, 3rd, Addison- Wesley

5. Data, Information & Knowledge • One of the primary goals of Information Systems is to economically process data into information or knowledge. • Data • elementary description of things, events, activities, and transactions that are recorded, classified, and stored, but not organized to convey any specific meaning. • Information • data that have been organized so that they have meaning and value to the recipient. • Knowledge • information that have been organized and processed to convey understanding, experience, accumulated learning, and expertise

6. Classification of IS • Organizational structure • Functional area • Support provided • System architecture • Information Architecture & Information Infrastructure • Activity supported

7. Organizational Structure • Department information systems • Enterprise information systems • While a departmental IS is usually related to a functional area, the collection of all departmental applications when combined with other functions’ applications comprises the enterprisewide information system • Inter-organizational systems (IOS) • Benefits • 結合採購商、供應商、合作夥伴，並重新設計主要商業流程，以提高生產力、品質、速度、彈性之功效 • 創新新的配銷管道，提供新的以資訊為基礎的產品和服務 • 提高進出市場的障礙，移轉了產業內的競爭勢態 • Types • 連接購買和供應商的行銷IOS或後勤IOS • 產業內的平台(industry platform) • 虛擬系統(virtual systems) • 電子市場(electronic market)

8. IS - Classification By Function (Department) An information system (IS) support each department in a corporation. • Operations • Accounting • Finance • Marketing • Human resources Point-of-Sale (POS) Transaction Processing Systems (TPS): Automates routine and repetitive tasks that are critical to the operation of the organization

9. IS - Classification By Function (Department) An information system (IS) support each department in a corporation.

10. Business processes and functional areas of business [Source:Steven Alter, Information Systems: A Management Perspective, 3rd, Addison- Wesley ]

11. Early 1950s Transaction processing system (TPS) 1960s Management information systems (MISs) Late 1960sOffice automation system (OAS) Early 1970sDecision support system (DSS) Early 1980sExecutive information systems Enterprise information systems (EISs) Group support systems (GSSs) Mid- 1980sExpert systems (ES) Knowledge management systems (KMS) 1990s Artificial neural networks (ANNs) Evolution of Support Systems

12. IS - Classification By Support Function • 5-year sales trend • Profit Planning • 5-year budget forecasting • Product development Executive Support System • Sales Management • Inventory Control • Annual budget • Production Scheduling • Cost Analysis • Pricing Analysis Management Information System Decision Support System Intelligent Support Systems • Simulation • Pgm coding • System support • Word Processing • Desktop Publishing Knowledge Management System Office Automation System • Order Processing • Fulfillment • Material Movement • A/R, A/P, GL • Payroll • POS Transaction Processing System

13. System Employees supported OAS, Word processing system, DMS, Desktop publishing system Officer workers CAD/CAM Engineers, draftsmen TPS, MIS, Communication & collaboration systems All employees GSS People working in groups DSS, Business Intelligence(BI) Decision makers, managers EIS Executives, top managers Knowledge workers, nonexperts ES Neural Networks, case-based reasoning Knowledge workers, professionals Knowledge workers, managers Data Warehouse Mobile computing systems Mobile employees Main types of IT supported systems (Table 2.1)

14. Transaction Processing System (TPS) • Supports the monitoring, collection, storage, processing, and dissemination of the organization’s basic business transactions • Automates routine and repetitive tasks that are critical to the operation of the organization, such as preparing a payroll, billing customers, POS and Warehouse operations • Data collected from this operation supports the MIS and DSS systems employed by Middle Management • Computerizes the primary and most of the secondary activities on the Value Chain. • Primary purpose to perform transactions and collect data.

15. TPS (transaction processing system) [Source:Steven Alter, Information Systems: A Management Perspective, 3rd, Addison- Wesley ]

16. Management Information Systems (MIS) • Purposes • access, organize, summarize, and displayed information for supporting routinedecision making in the functional areas • Decisions supported are more structured • Primary purpose - process data into information • characterized mainly by their ability to produce periodic reports • range from the repetitive to ad hoc • Topics: operational efficiency, effectiveness, and productivity • Examples: a daily list of employees and the hours they work, or a monthly report of expenses as compared to a budget • Others • Used for planning, monitoring, and control • in Replenishment, Pricing Analysis (Markdowns) and Sales Management • constructed in whole or in part by end-users • geared toward middle managers

17. Functional MISs Sales forecast by region generated by marketing MIS.

18. DSS & ISS • Decision Support Systems (DSS) - support complex non-routine decisions • Typically employed by tactical level management whose decisions and what-if analysis are less structured • present the results + expand the information with alternatives • Some DSS methodologies • Mathematical Modeling, Simulation, Queries, What-If (OLAP-Cubes) & Data mining • Intelligent Support Systems (ISS) • Artificial intelligence (AI) these systems perform intelligent problem solving • Expert systems (ESs) - One application of AI • provide the stored knowledge of experts to nonexperts, so the latter can solve difficult or time-consuming problems • The difference • DSS => users make their decisions according to the information generated from the systems • ES => the system makes recommended decisions for the users based on the built-in expertise and knowledge

19. Executive Support Systems (ESS) • ESS systems or Enterprise Information Systems (EIS) • originally implemented to support Senior management • These systems have been expanded to support other managers within the enterprise. • At the senior management level they support Strategic activities which deal with situations that significantly may change the manner in which business is done.

20. Office Automation Systems (OAS) • OAS • Two aspects • Electronic communication • word processing systems, document management systems and desktop publishing systems. • predominantly used by clerical workerswho support managers at all levels • data workers • Among clerical workers, those who use, manipulate, or disseminate information

21. Knowledge Management Systems (KMS) • KM • Supported for professional people • An additional level of staff support now exists between top and middle management • Example: financial and marketing analysts • act as advisors and assistants to both top and middle management • responsible for finding or developing new knowledge (External Content) for the organization and integrating it with existing knowledge (Internal Content) • support these knowledge workers range from Internet search engines and expert systems, to Web-based computer-aided design and sophisticated data management systems

22. Interrelated supported systems

23. Operational, Managerial & Strategic Systems • Classification by the activity supported • Operational systems - Day-to-day operations of an organization • Managerial(tactical) systems - Middle-management activities such as short-term planning, organizing, and control • Statistical summaries • Exception reports • Periodic and ad hoc reports • Comparative analysis • Projections • Early detection of problem • Routine decisions • Connections • Strategic systems - Decisions that significantly change the manner in which business is being done • Long-range planning • Strategic response systems & Innovative strategic systems

24. New Strategic Systems • Electronic commerce (EC) has become a new way of conducting business in the last decade or so. • In this new model, business transactions take place via telecommunications networks, primarily the Internet. • e-Commerce provides organizations with innovative and strategic advantages, such as; • Increased market share • Better ability to negotiate with suppliers • Better ability to prevent competitors from entering into their territory

25. Relationship Between People & IS • Knowledge workers- Create information and knowledge • Data workers - Use, manipulate, or disseminate information

26. IS related to Mintzberg’s management roles [Source:Steven Alter, Information Systems: A Management Perspective, 3rd, Addison- Wesley ]

27. Supply Chain • A supply chain is a concept describing the flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers • Components of the Supply Chain • Upstream supply chain • includes the organization’s first-tier suppliers and their suppliers • Internal supply chain • includes all the processes used by an organization in transforming the inputs of the suppliers to outputs • Downstream supply chain • includes all the processes involved in delivering the products to final customers

28. A supply chain for a manufacture Components of the Supply Chain

29. Inter-Organizational Systems (IOS) • IOS - systems that connect two or more organizations • These systems are common among business partners and play a major role in EC, as well as in SCM support • EDI (electronic data interchange) • developed in the 1980s • Web-based systems (many using XML) • deliver business applications via the Internet • Using browsers and the Internet, people in different organizations communicate, collaborate, access vast amounts of information, and run most of the organization’s tasks and processes

30. Electronic Data Interchange (EDI) • Overview • to improve communications with business partners • involved computer-to-computer direct communication of standard business documents (ex. purchase orders, bills, and order confirmations) between business partners • In the past • run on expensive value-added networks (VANs) • These are private, data-only wide area networks used by multiple organization to provide high capacity, security, and economies in the cost of network service. • The cost of VANS limited EDI to large business partners • Now - the emergence of Internet-based EDI

31. Information Infrastructure & Information Architecture • Infrastructure • consists of the physical facilities, services, and management that support all computing resources in an organization. • IT Architecture • is a high-level map or plan of the information requirements of the organization in an organization • New architectures • Client/server • Enterprisewide computing • Intranets • Internet • Extranets

32. Information Systems Function Information Infrastructure

33. Architecture of an online travel agency Two or more organizations

34. Information architecture model • Information Architecture • a conceptual framework for the organizational IT infrastructure • It is a plan for the structure and integration of the information resources in the organization.

35. Information Architecture – Classified by HW • Classified by computing paradigms, which are the core of the architecture • Mainframe Environment - Centralized computing environment • Powerful storage and computational capabilities • NC (Network computers) • PC Environment • PC-LAN Environment • Standalone PC =>Small- to medium-size (SME) organizations • Distributed computing - Distributed processing divides the processing work between two or more computers • Cooperative processing • Client/server architecture • Enterprisewide computing • Legacy systems • Peer-to-peer (P2P) architecture –file sharing

36. Client/Server Architecture • A client/server architecture divides networked computing units into 2 major categories • A client is a computer such as a PC or a workstation attached to a network, which is used to access shared network resources. • A server is a machine that is attached to this same network and provides clients with these services. • The purpose of client/server architecture is to maximize the use of computer resources. • Client/server architecture gives a company as many access points to data as there are PCs on the network.

37. Web-based systems refer to those applications or services that are resident on a server that is accessible from anywhere via the WWW. The only client-side software needed to access and execute Web-based applications is a Web browser environment. 2 important features of Web-based functionality The generated content/data is updated in real time. They are universally accessible via the Web to users (dependent on defined user-access rights). Web-based Systems • The Internet • Intranets • Extranets • Corporate Portals • E-commerce Systems • Electronic Storefronts • Electronic Markets • Electronic Exchanges • M-Commerce • Enterprise Web

38. The Internet & Intranet • The Internet - Sometimes called simply “the Net,” • A worldwide system of computer networks—anetwork of networks • The Internet uses a portion of the total resources of the currently existing public telecommunication networks • its use of a set of protocols called TCP/IP • Intranet - typically a complete LAN, or several intra-connected LANs • the use of Web technologies to create a private network, usually within one enterprise • used for • work-group activities • the distributed sharing of projects within the enterprise • Controlled access to company financial documents • use of knowledge management, research materials, online training, and other information that requires distribution within the enterprise

39. Extranets & Corporate Portals • Extranets • Connect several intranets via the Internet, by adding a security mechanism and some additional functionalities • form a larger virtual network that allows remote users (such as business partners or mobile employees) to securely connect over the Internet to the enterprise’s main intranet • also employed by two or more enterprises (suppliers & buyers) to share information in a controlled fashion => play a major role in the development of B2B EC and Supply Chain systems • Corporate portals • Web sites that provide the gateway to corporate information from a single point of access • also used to personalize information for individual customers and for employees • Intranets and Extranets are usually combined with and accessed via a corporate portal

40. EC Systems • Web-based systems that enable business transactions to be conducted seamlessly 24 hours a day, 7 days a week • Some classifications of EC systems • B2C (Business to Consumer) • B2B (Business to Business) • B2E (Business to Employee) • The major components of Web-based EC • Electronic storefronts - Web-equivalents of a physical store • Common features and functions • an E-catalog • a shopping cart • a checkout mechanism • a payment processing feature • a back office order fulfillment system • Electronic markets • Mobile commerce

41. Electronic Markets • Electronic markets • a web-based network of interactions and relationships over which information, products, services, and payments are exchanged • The principal participants in marketplaces • transaction handlers, buyers, brokers, and sellers • Private marketplaces • markets can reside in one company, where there is either one seller and many buyers, or one buyer and many sellers

42. Electronic Exchanges • Electronic exchanges -A special form of electronic markets • Web-based public marketplaces where many buyers and many sellers interact dynamically • Originally set as trading places for commodities, electronic exchanges have emerged for all kinds of products and services • The classification • Vertical exchanges • position themselves as the hub for all buying, selling, and related services in a single market category • Horizontal exchanges • focus on a specific function or need applicable to many different industries

43. Mobile-Commerce • Mobile commerce or M-commerce • the buying and selling of goods and services through wireless handheld devices such as cellular telephone and personal digital assistants • Known as “next-generation EC,” m-commerce enables users to access the Internet without a place to plug in to • Wireless Application Protocol (WAP) is the emerging technology behind m-commerce • Using Bluetooth technology, WAP-enabled smart phones offer fax, e-mail, and phone capabilities all in one. • As this wireless environment expands, a pervasive computing environment will develop, employed by mobile employees and others, will change the way business is transacted.

44. Enterprise Web • Is an open environment for managing and delivering Web applications. It combines services from different vendors in a technology layer that spans rival platforms and business systems, creating a foundation for building applications at a lower cost. • Applications, including business integration, collaboration, content management, identity management, and search, which work together via integrating technologies. • The result is an environment that spans the entire enterprise.

45. Emerging Computing Environments(I) • Utility Computing • computing that is as available, reliable, and secure as electricity, water services, and telephony • to have computing resources flow like electricity on demand from virtual utilities around the globe—always on and highly available, secure, efficiently metered, priced on a pay-as-you-use basis, dynamically scaled, self-healing, and easy to manage • Subscription Computing - a form of utility computing • that puts the pieces of a computing platform together as services, rather than as a collection of separately purchased components • Pervasive Computing • a future in which computation becomes part of the environment. Computation will be embedded in things, not in computers

46. Emerging Computing Environments(II) • Grid Computing • employs networked systems to harness the unused processing cycles of all computers in that given network thus creating powerful computing capabilities • already in limited use • Example: project SETI (Search for Extraterrestrial Intelligence) @Home project • PC users worldwide donate unused processor cycles to help the search for signs of extraterrestrial life by analyzing signals coming from outer space • Web services • self-contained, self-describing business and consumer modular applications, delivered via the Internet, that users can select and combine through almost any device, ranging from PC to mobile phones

47. Managing Information Resources • The responsibility for the management of information resources is divided between two organizational entities • The information systems department (ISD) - a corporate entity. • The end-users - who are scattered throughout the organization. • This division of responsibility raises important questions: • Which resources are managed by whom? • HW/SW, Databases, Networks, Procedures, Security, Physical buildings • the size/ nature of the organization, the amount/ type of IT resources • The ISD is responsible for corporate-level and shared resources, while the end users are responsible for departmental resources. • What is the role of the Information Systems Department (ISD)? • Managing relationships with end users • Managerial issues • Transition to networked computing, From legacy systems to client/server systems, How much infrastructure?

48. Role of the IS Department

49. What is the Role of the ISD? • The role of the ISD is changing from purely technical to more managerial and strategic. • As a result, the position of the ISD within the organization tends to be elevated from a unit reporting to a functional department, to a unit reporting to a senior vice president of administration or to the CEO. • The role of the director of the ISD is changing from a technical manager to a senior executive. • The ISD can be centralized or decentralized or a combination of the two. • The ISD must work closely with external organizations such as vendors, business partners, etc.