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Information Technology that converts
data to information Success! ?
Use of information.
Businessmodels.
Businessprocesses.
ITSuccessfactors
include:
Information Technology that converts
data to information Success! ?
Use of information.Businessmodels.
Businessprocesses.
ITSuccess
factorsinclude: OperationsManagement
OperationsManagement?
OperationsManagement dealswith the design and
management ofproducts,
processes, servicesand supply chains
Information and
Communication in Business
Information and Operations
Management
Kroenke chapter 1, 2, 7, and a bit of chapter 8
What do we mean by data?
What do we mean by information?
What do we mean by knowledge?
Are they different?
Measures of information quality
What sorts of features makeinformation worth having, i.e. useful?
accuracy
accessibility
timeliness
organisation
relevance
cost effectiveness
decision oriented
completeness
verifiability
reliability
simplicity
security
surprise value
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Information?
Data the actual values recorded in a system
Information the meaning of those values asunderstood by some user of the system
DataData TransformationProcess
TransformationProcess
InformationInformation
Medical Record
Same data;different transformation;
different information.
Doctors infoDoctorreads
Nurses infoNursereads
Patients infoPatientreads
The aim of Information Systems is to
convert data to useful information, is that
the end of the story??
Peter Senge believes that there is much more to it
than just this; he suggests the progression:
Data- facts
Information - meaning
Knowledge produce outcomes
Insight understand why
Wisdom do good
We have a long way to go!!
A grain of wisdom isA grain of wisdom isA grain of wisdom isA grain of wisdom is
worth an ounce ofworth an ounce ofworth an ounce ofworth an ounce of
knowledge, which is worthknowledge, which is worthknowledge, which is worthknowledge, which is worth
a ton of data.a ton of data.a ton of data.a ton of data.
-------- Neil LarsonNeil LarsonNeil LarsonNeil Larson
Knowledge
Information is data made more useful by
application of knowledge
knowing what info is required for a task or
decision
knowing what data is required to get theinformation
knowing how and where to get the relevant data
knowing how to transform the data intoinformation
understanding the meaning of the information
Information Technology that converts
data to information Success! ?
Use of information.
Businessmodels.
Businessprocesses.
ITSuccessfactors
include:
Knowledge management:
Capturing the expertise of an organisation from
every possible source - peoples heads, paper
documents, computer systems - and making it
available to others in the organisation who need it.
tacit knowledge
explicit knowledge
Difficulties:
people problems
technical problems
A Business Model
a summary of how a business will
generate revenue, identifying
the products it will offer
its value-added services
its revenue sources
its target customers
an architecture for flow of products,
services, and information
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Business processes:
how organisations operate
the sequences of activities that must be
performed to transform inputs into outputs
Stair & Reynolds
Adding the e has changed business
process for many organisations:
Organisations are systems:
A system is
a collection of interrelated parts . . .
that work together for a common goal . . .
by accepting inputs . . .
and producing outputs . . .through an organised transformation process.
Systems consist of subsystems, and are part of
larger systems
Business processes depend onorganisational structure
Organizational structure: Organizational
subunits and the way they are related to the
overall organization
Hierarchical organizational structure
Series of levels
Those at high levels have more power andauthority within an organization
Executive
Managers
Mid-Level Managers
Technical and Supervisors
Professional Workers
Clerical Workers
A hierarchical organisational structure
Project organizational structure
a structure centred on major products or services
B. Woods,
ChairmanOff the Planet Inc.
T. White,Director,
Aircraft Division
W. Butler,Director,
Aerospace Division
G. Searle, Director,Communications &
Satellite Division
Director,Finance
Director,
Marketing
Director,
Production
Director,
Finance
Director,
Marketing
Director,
Production
Director,
Sales
Director,
Finance
Director,
Marketing
Director,
Production
Director,
SalesDirec
Sal
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Traditional Hierarchical
Organizational Structure
U. Grant,
Chief ExecutiveOfficer
B. Lee,
Director ofAccounting
C. Gregg,
Chief InformationOfficer
R. Haines,
Director ofMarketing
G. Lincoln,
Chief Engineer
B. Mann,
Director, HumanResources
S. SamuelDirectorAircraft Production
L. SmithDirectorSatellite and Communications
- organised by
business function
Multidimensional Organizational Structure
Director,
Marketing
Director,
Production
Director,
Finance
Publisher,
Tertiary Division
Marketing
Group
Production
Group
Finance
Group
Publisher,Retail Division MarketingGroup ProductionGroup FinanceGroup
Publisher,
High School
Division
Marketing
Group
Production
Group
Finance
Group
a structure that may incorporate severalstructures at the same time
Team organizational structure
An organizational structure centred on work
teams or groups, often transitory
Flat organizational structure
An organizational structure with a reduced
number of layers of management
Empowerment: giving employees and theirmanagers more power, responsibility, and
authority to make decisions, take certainactions, and have more control over their jobs
input:input: data the values physically recorded in thesystem
output:output: information the meaning of those values asunderstood by some user
process:process: a set of logically related tasks performed toachieve a defined outcome
environment:environment: the world outside the system
objective:objective: to further the goals of the organisationwithin which it functions, e.g. by transforming data intoinformation that is useful to the organisation, or byproviding support for business processes
Business processes need support
from Information Systems
Boundary (Scope)
Environment
Storage
Processing
Internal
Feedback
External
Feedback
DataInformation
Objective?
Does an information system
require a computer?
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A computer-based information
system
Computer-based information systemComputer-based information system
hardwarehardware softwaresoftware
proceduresproceduresdatadata
CPUdiskkeyboardmousemonitor
printernetwork
manualcomputerised
peoplepeople
managers
usersanalystsprogrammerstechnologists
computer systemcomputer system
systemsoftwareapplication
software
manualcomputerised
A set of hardware, software, data, people, and
procedures that work together to produce
information
Information Systems provide. . .
Transaction processing
Collaboration tools, and office automation
Process control
Information for managers
Support for decision making
AI applications in business
Transaction Processing
Transaction:
any business related exchange
Some of Together Weddingstransactions:
Signing up a new client
Recording consultation
hours with clients
Hiring a new Wedding
planner
Booking a venue
Overview of transaction
processing
Data Collection
process of gathering all necessary data
ideally captured at source
bar code scanning at supermarket
on-line tutorial registration can be used to measure employee
performance
Basic Steps of transaction
processing
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Basic Steps of transaction
processing
DocumentProduction
Storage
DataManipulationData
Correction
Data Edit
DataCollection
correct
incorrect
TPS reports
How would I prevent errors when
transactions are recorded in an Excel
spreadsheet?
you cant!
BUT you canprevent some.
Data/Validation
Data Editing
as the data is captured it is checked for validity
and completeness
Data Correction
system should provide some means of correcting
invalid input.
Basic Steps of transactionprocessing
Document Production
payslips
transaction receipts
delivery dockets
invoices
reports
items on order from a supplier
current inventory
Basic Steps of transaction
processing
Data Manipulation
could involve classifying the data, sorting it,calculating values, and summarising results
Data Storage
data is stored in one or more databases. The
data can then be used for further processing byother systems
Basic Steps of transaction
processingMethods of Transaction
Processing batch
transactions are accumulated over a period of timeand prepared for processing as a single unit or batch.
online transaction processing (OLTP) each transaction is processed immediately and theaffected records are updated
used for e-commerce applications
online entry with delayed processing transactions are entered into the system as they occur,
but they are not processed immediately
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The business processes that
involve transaction
processing are so critical to
the businesss operation that
they are sometimes referredto as the
lifeblood of the
organisation
Control and Management Issues Business Continuity Planning
the process of anticipating, preventing, and
providing for recovery from problems
implementing backup procedures
Focus:
maintaining the integrity of corporate information
keeping key information systems running
Disaster Recovery
implementing the business resumption plan
after a disaster
Causes of Problems / Disasters
Malicious damage
Deliberate
Accidental Equipment failure
Telecommunications,LAN failure
Equipment breakdowns
Physical security
Equipment
Building Natural disaster
Flood
Electrical storm
Fire
But prevention is better than cure . . .
Redundancy
Critical hardware /software components
Computers
Communications
Backup
Full
Incremental
Testing by restoring
Off-site storage of
backup data
Security
Unauthorised access to system Software controlled
Physical access control
Preventative measures Camera
Security personnel
Virus Protection
Scanning for viruses
Updating virus software
Staff awareness and motivation
How do businesses exchange
transactions with each other?
Electronic Data Interchange
(EDI) computer to computer exchange of
transactions
from standard business
documents
in standard data formats
replaces paper
but the basic business processes remain the same
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What does that zig-zag line represent? Information Systems provide. . .
Transaction processing
Collaboration tools, and office automation
Process control
Information for managers
Support for decision making
AI applications in business
Collaboration tools, and office
automation Project management
Personal productivity tools
Collaboration technologies
Information Systems provide. . .
Transaction processing
Collaboration tools, and office automation
Process control
Information for managers
Support for decision making
AI applications in business
TEAM DYNAMICS
e-Mail, Electronic Bulletin Boards
Electronic Meeting Support
Group Scheduling Software
Videoconferencing Software
Whiteboard Software
Workflow Systems
DOCUMENTMANAGEMENT
A database that stores andorganises documents for a group
and manages access to them
Collaboration
Technologies Process Control- control of machinery and production processes
computers control
lathes, mills, robots,
entire production lines
outside our scope
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Information Systems provide. . .
Transaction processing
Collaboration tools, and office automation
Process control
Information for managers
Support for decision making
AI applications in business
Good management is becoming
more complex . . . globalisation
the advent of a global economy, in whichproducts and services flow relatively freelyaround the globe
expanding markets
more intense competition
shorter product life cycle
more complex government regulation
the information revolution
ecommerce
What does management do?
Plan
Control
Direct
Organise
objectives,strategies and
tactics
money, people,material and
management
structurecommunicate,
instruct and motivate
measure performance /
take correctiveaction.
What do each of the management tasks (planning,
organising, directing and controlling) at any
management level have in common?
To make good decisions, managers need
access to quality information.
Decision making
Information for managers
Summarized reports: predefined reports thataggregate information e.g
Key-indicator reports
summarize the previous days critical activities
typically available at the beginning of each workday
Comparative reports show two or more sets of similar information to
illustrate a relationship
Summarized reports may be
Periodic: produced periodically on a schedule (daily,weekly, monthly)
Ad hoc: generated only when a manager requests them
Sample reports
for managers
[Figure 9.2]
continued...
(a) Periodic Report
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Information for managers
Exception reports
Automatically produced when a situation isunusual or requires management action
e.g a report produced to show any project thatis more than $10,000 over budget
trigger points need to be carefully set!
Sample reports
for managers
[Figure 9.2 continued]
(c) Ad hoc Report
Case Study Part 2 Information Systems provide. . .
Transaction processing
Collaboration tools, and office automation
Process control
Information for managers
Support for decision making
AI applications in business
You will be creating a simple system to
support Together Weddings business
operations
Transaction Processing:
Employing a new wedding planner
Signing up a new client
Changing a clients details
Recording consultation details
Information for managers: Average number of guests catered for at events
Summary of events in each calendar year
An alternative way to classifyinformation systems - by business
function:
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Traditional Hierarchical
Organizational Structure
U. Grant,
Chief ExecutiveOfficer
B. Lee,
Director ofAccounting
C. Gregg,
Chief InformationOfficer
R. Haines,
Director ofMarketing
G. Lincoln,
Chief Engineer
B. Mann,
Director, HumanResources
S. Samuel
DirectorAircraft Production
L. Smith
DirectorSatellite and Communications
- organised by
business function
An alternative way to classify information
systems - by business function:
Production /Manufacturing
Sales /Marketing
Human ResourceManagement
OperationsAccounting /Finance
Functional
BusinessSystems
Kroenke Fig 7-4
Functions of a Salesand MarketingSystem:
Lead-generation
Lead-tracking
Customer
management
Sales forecasting
Product and brand
management
Adapted from: Kroenke Fig 7-6
Functions of an
OperationsInformation
System
order entry
ordermanagement
finished-goods
inventorymanagement
customer
service
Adapted from Kroenke Fig 7-7
Functions of a
manufacturing
information system
inventory
manufacturing planning
manufacturing
scheduling
MRP
MRP II
manufacturing operations
Adapted from Kroenke Fig 7-12
Functions of a combined accounting and finance
information system
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Adapted from Kroenke Fig 7-11
Functions of a
Human Resources
Information System
recruiting
assessment
planning
compensation
development andtraining
Kroenke Fig 7-13 Major Problems of IsolatedFunctional Systems
Functional information systems
dont integrate business processes
and datathroughout an organization
Problem!
Todays trend:
a strategic
approach
to
business
systems . . .
Customer relationship management
Enterprise resource planning
Enterprise application integration
Cross-functional systems . . .
Remember that organisations
are systems, and
Systems consist of subsystems
Subsystems interact with and affect each
other
So it makes sense that
Information systems that support anorganisations subsystems should interact
with each other
Customer Relationship
Management Systems (CRM)
use information about customers to gain
insights into their needs, wants, and
behaviours in order to serve them better
may include sales force automation customer service and support
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Customer relationship management
crosses functional boundaries . . .
Sales and Marketing
Human Resources
Accounting and FinanceOperations
Adapted from Kroenke Fig 7-18
Major components of a typical Customer
Relationship Management (CRM) system
A collection of software modules that together
integrate ALL the organisations transaction
processing using a common database
Enterprise Resource Planning
(ERP) Systems
Some characteristics:
ERP systems . . .
Some benefits:
When an ERP system is inappropriate for an
organization, it can still integrate its existingsystems by creating special software to connectsystems together.
Enterprise application integration enables a
businesss existing applications to communicateand share data, providing many of the benefitsof a cross-functional system without some ofthe disadvantages.
Enterprise application integration(EAI)
Lower costs to implement thana full ERP.
Less disruption to operationsand employees.
Integration of selected parts ofthe organization.
A step-wise implementationprocess that allows thebusiness eventually to achievethe full benefits of an ERP.
Enterprise application integration . . .
Some benefits:
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Enterprise application integration
systems
act as an intermediary to enable existing
functional systems to automatically
exchange data
take data from the sending system andconvert it into a format suitable for the
receiving system to process
combine data from several systems