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.

1. Paper 2.1
Information Systems
Abdisalam Issa-Salwe
Faculty of Professional Studies
Thames Valley University

2. Part 1: Managing information systems
Part 2: Designing information systems
Part 3: Evaluating information systems
Abdisalam Issa-Salwe, Thames Valley University
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3. Content 1: Managing information systems
Align information systems with business
¡
objectives,
Identify business opportunities provided by
¡
information systems,
Organise and structure information systems
¡
delivery, account for information systems
delivery,
Define the costs and benefits of information
¡
systems development, establish security and
recovery plans.
Abdisalam Issa-Salwe, Thames Valley University
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4. Content 2: Designing information systems
Define the systems development
¡
process,
Plan information systems development,
¡
Identify and record user requirements,
¡
Define and specify user requirements,
¡
Acquire information systems solutions to
¡
meet user requirements,
Implement information systems to meet
¡
user requirements.
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5. Content 3: Designing information systems
Test and install information systems,
¡
Evaluate information systems delivery,
¡
Monitor information systems development,
¡
Review and report on information systems
¡
performance,
Rectify and improve information systems
¡
performance,
Establish legal and other implications of
¡
information systems
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6. Learning Objectives (Paper 2.1)
On completion of this paper candidates should
be able to:
Explain how to effectively use information systems and
¡
information systems resources in an organisation
Identify and apply methods of accounting for information
¡
systems delivery and projects
Participate in the definition and specification of user
¡
requirements
Describe how an appropriate solution to specified user
¡
requirements should be selected
Explain how an information systems project may be
¡
planned, monitored and controlled
Describe the systems development process and its
¡
implications
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7. Lecture 1
Part 1:
Managing Information Systems
Information Systems
and
Business Strategy
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8. Learning aim
Explain an approach that an organisation
¡
may follow to formulate its strategic
business objectives
Discuss how information systems may be
¡
used to assist in achieving these
objectives
Distinguish between a business strategy
¡
and an information systems strategy
Identify responsibility for the ownership of
¡
the IS strategy
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9. Information System (IS)
A system is a set of interacting components
¡
that operate together to accomplish a 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.
Information Systems (IS) consist of technology
¡
tools and systems that help to acquire, sustain,
and proliferate information.
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10. Definition of Informati on Systems
An organised method of transforming data into
¡
information that can be used for decision making.
(wps.prenhall.com/ca_ph_ebert_busess_3/0,6518
,224378-,00.html)
The general term for computer systems in an
¡
organisation that provide information about its
business operations.
(www.iib.qld.gov.au/itcareers/talk.asp)
A structured, interacting, complex of persons,
¡
machines, and procedures designed to produce
information which is collected from both internal
and external sources for use as a basis for
decision-making in specific contract/procurement
activities.
(www.projectauditors.com/Dictionary/I.html).
Abdisalam Issa-Salwe, Thames Valley University
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11. Definition of Information Systems (cont )
The function within a business
¡
organisation that facilitates data
processing and enables the resulting
information to be made available to
employees who need it. Also known as
information technology.
(www.minnesotamutual.com/news/glossa
ry_pages/glossary_i.html)
the entire infrastructure, organisation,
¡
personnel, and components that collect,
process, store, transmit, display,
disseminate, and act on information
(www.155.217.58.58/cgi-
bin/atdl.dll/fm/100-6/glossary.htm)
Abdisalam Issa-Salwe, Thames Valley University
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12. Why IS is important to organisations?
Understand the role and relevance
¡
of an information system aids
decision making.
Identifying and evaluating
¡
appropriate information systems.
Managing the process of
¡
information gathering, processing,
storage and retrieval
Managers make decisions using the
¡
information available to them at the
time.
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13. Life-blood of the organi sation
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14. Organisational Information Requirement
Organisations require
information for various
purposes:
Information for planning
¡
Information for controlling
¡
Information for recording
¡
transactions
Information for performance
¡
measurement
Information for decision making
¡
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15. Organisational Information Requirement (cont )
Planning: Planning requires a
¡
knowledge of the available
resources, possible time-scales and
the likely outcome under
alternative scenarios.
¡ Controlling: Information is required
to assess whether it is proceeding
as planned or whether there is
some unexpected deviation from
the plan. It may consequently be
necessary to take some form of
corrective action.
Abdisalam Issa-Salwe, Thames Valley University
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16. Organisational Information Requirement (cont )
Recording Transactions: Information
¡
about each transaction or event is
required, i.e. (a) for documentation of
transactions, (b) record transactions,
for example for accounting, audit and
Tax purposes, and (c) permit the
necessary controlling action to be taken.
Performance measurement:
¡
Comparisons against budget or the
business plan are able to be
undertaken.
Abdisalam Issa-Salwe, Thames Valley University
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17. Organisational Information Requirement (cont )
Decision making: Just as decision
¡
making can be analysed into three
levels, so information necessary to
make decisions within an
organisation can be analysed in
the same way.
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18. About Business Strateg y
Organisation has a limited set of
¡
resources (e.g. time, people, money,
physical resources) and they must
decide how to use those resources.
Strategy is deciding what the
¡
organisation is going to do and how
it will use its resources
A business system is a collection of
¡
people, machines and methods
organised to accomplish a set of
specific functions.
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19. About Business Strategy? (cont )
Contributing to the establishment of the
¡
organisation's long term business objectives e.g.
identifying and evaluating external factors which
may impact on the organisation
Identifying and appraising the organisation's skills
¡
and resources
Identifying and defining business options; evaluating
¡
these options, performing risk assessments and
recommending strategies for adoption
Analyzing market and competitive developments in
¡
relation to marketing strategy
Advising managers on critical economic and financial
¡
developments
(CIMA Practical Experience Guidelines from January
2003)
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20. Examples of Strategies
Strategy 1: Manufacture equipment with
¡
the money and use the building and the
people to manufacture widgets.
Strategy 2: Outsource the production of
¡
widgets and use the people and building to
be widget distributor - or perhaps a widget
store.
Strategy 3: Sell the patent to a larger firm,
¡
sell the building, fire the employees and
retire!
Abdisalam Issa-Salwe, Thames Valley University
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21. Computer-Based Information Systems (cont )
Telecommunications:
¡
Electronic transmission of signals for
¡
communications, and enables organisations to link
computer systems into effective networks
Networks: Used to connect computers and computer
¡
equipment
Internet:
¡
The world s largest
¡
Intranet:
¡
A network of networks that uses Internet technology
¡
within an organisation
People:
¡
The most important elements in most Computer-Based
¡
Information Systems
Procedures:
¡
Strategies, policies, methods, and rules for using
¡
Computer-Based Information Systems
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22. Definitions of information
Data that has been interpreted,
¡
translated, or transformed to reveal the
underlying meaning;
(www.nrcan.gc.ca/cfs-
scf/science/prodserv/kmglossary_e.html)
Data that have been processed and
¡
presented in a form suitable for human
interpretation, often with the purpose of
revealing trends or patterns.
(www.gtscompanies.com/glosscomp.html
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23. The making of information
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24. Implications of information management in organisations
It has the potential to contribute to
¡
the achievements of organisations
It has different purposes in different
¡
organisations. These purposes will be
influenced by the organisation's goals
as well as by its culture and its stance
on information.
It is practiced in a political, social and
¡
cultural context which shapes both
what information management does
and how it does it.
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25. Developing IS/IT strategy
Once key strategic issues have been
¡
identified, they feed into business
objectives, particularly marketing
objectives.
SWOT analysis can be used in
¡
conjunction with other tools for audit
and analysis, such as PEST analysis and
Porter's Five-Forces analysis.
Abdisalam Issa-Salwe, Thames Valley University
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26. Strategic Information Systems
Strategic information systems
¡
computer systems at any level of an
l
organisation that change the goals, processes,
products, services, or environmental
relationships to help the organisation gain a
competitive advantage
Information considered as a resource,
¡
much like capital and labor
IT-critical competitive strategies:
¡
Customer lock-in, customer lock-out, new
business entry
Abdisalam Issa-Salwe, Thames Valley University
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27. Strategic Information Systems (cont )
What do managers need to know about
¡
organisations in order to build and use
information systems successfully?
What impact do information systems have
¡
on organisations?
How do information systems support the
¡
activities of managers in organisations?
How can businesses use information
¡
systems for competitive advantage?
Why is it so difficult to build successful
¡
information systems, including systems
that promote competitive advantage?
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28. SWOT Anal ysis
SWOT analysis is an important tool for
¡
auditing the overall strategic position of
a business and its environment.
SWOT is an abbreviation for Strengths,
¡
Weaknesses, Opportunities and Threats
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29. SWOT Anal ysis (Cont )
Strengths and weaknesses are Internal
¡
factors:
For example, a strength could be your specialist
¡
marketing expertise. A weakness could be the lack
of a new product.
Opportunities and threats are external
¡
factors.
For example, an opportunity could be a developing
¡
distribution channel such as the Internet, or
changing consumer lifestyles that potentially
increase demand for a company's products. A threat
could be a new competitor in an important existing
market or a technological change that makes
existing products potentially obsolete
Abdisalam Issa-Salwe, Thames Valley University
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30. Abdisalam Issa-Salwe, Thames Valley University
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31. SWOT Anal ysis (cont )
Strength
¡ your specialist marketing expertise.
¡ a new, innovative product or service
¡ location of your business
¡ quality processes and procedures
¡ any other aspect of your business that adds
value to your product or service.
Abdisalam Issa-Salwe, Thames Valley University
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32. SWOT Anal ysis (cont )
Weakness could be:
¡ lack of marketing expertise
¡ undifferentiated products and service (i.e. in
relation to your competitors)
¡ location of your business
¡ poor quality goods or services
¡ damaged reputation
Abdisalam Issa-Salwe, Thames Valley University
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33. SWOT Anal ysis (cont )
Opportunity could be:
¡ a developing market such as the Internet.
¡ mergers, joint ventures or strategic alliances
¡ moving into new market segments that offer
improved profits
¡ a new international market
¡ a market vacated by an ineffective competitor
Abdisalam Issa-Salwe, Thames Valley University
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34. SWOT Anal ysis (cont )
Threat could be:
¡ a new competitor in your home market
¡ price wars with competitors
¡ a competitor has a new, innovative product or
service
¡ competitors have superior access to channels
of distribution
¡ taxation is introduced on your product or
service
Abdisalam Issa-Salwe, Thames Valley University
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35. Critical Success Factors (CSF)
A small number of easily identifiable
¡
operational goals
Shaped by industry, manager,
¡
environment
Believed to assure firm s success
¡
Used to determine organization s
¡
information requirements
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36. CSF example
Example Goals CSF
Profit concern Earnings per share Automotive industry:
¡ ¡
¡ Return on lstyling
investment dealer system
lquality
control
¡ Market share lcost
Energy standards
¡ New product ¡
Not for profit Excellent health Regional integration
¡ ¡
care ¡ Improved monitoring of
regulations
¡ Efficient use of resources
Abdisalam Issa-Salwe, Thames Valley University
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37. Process of Decisi on Making
Strategic Decision Making:
¡
Determines long-term objectives,
resources, and policies
Management Control: Monitors
¡
effective or efficient usage of
resources and performance of
operational units
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38. Process of Decision Making (cont )
Operational control: Determines
¡
how to perform specific tasks set by
strategic and middle-management
decision makers
Knowledge-level decision making:
¡
Evaluates new ideas for products,
services, ways to communicate new
knowledge, ways to distribute
information
Abdisalam Issa-Salwe, Thames Valley University
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39. Decisions
Types of management decision:
¡
¡Structured:
l Repetitive, routine, procedure have been
agreed to deal with them.
¡Unstructured:
l Judgement, insight and evaluation is
necessary to deal with them.
They are usually important
¡
decisions that affect the future of
the organisation, there are no set
procedures.
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40. Structured or Un structured
In which town will the new branch
¡
be located?
How many extra staff do we hire for
¡
the Xmas period?
What can be done about an
¡
employee who has had too many
sick days off after being warned
about their attendance.
Should the stores adopt their own
¡
store card?
Abdisalam Issa-Salwe, Thames Valley University
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41. Types of information
Recognised by Robert
Anthony in the 1960 s
Strategic
Planning
Management Control
Operational Control
Transaction Processing
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42. Types of information (cont )
Strategic information: Strategic information is
¡
concerned with the whole organisation and is relevant
to the long term operational success.
It is derived from both internal and external sources and
¡
is summarised at a high level.
Tactical information: Tactical information is concerned
¡
with activities or departments and is relevant to the
short and medium term.
It is primarily generated internally (but may have a
¡
limited external component)...Tactical information data is
based upon quantitative measures and is prepared
routinely and regularly.
Operational information: Operational information is
¡
concerned with specific tasks and is relevant to the
immediate term.
It is derived from internal sources and is largely
¡
quantitative, detailed since it involves the processing of
raw data) and is prepared very frequently.
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43. Qualities of Informati on
Obtaining more information about what is
¡
likely to happen may reduce the
uncertainty about the future outcome
from taking a decision. Information can
be categorised upon its prediction
reliability.
perfect information is information that is
¡
guaranteed to predict the future with
100% accuracy.
Imperfect information is information
¡
which cannot be guaranteed to be
completely accurate: Almost all
information is therefore imperfect - but
may still be very useful.
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44. Qualities of Informati on (cont )
Accurate: figures should add up, the degree of
¡
Accurate rounding should be appropriate, there should
¡
be no typing errors, items should be allocated
to the correct category, assumptions should
be stated for uncertain information.
Complete
¡
Complete: the information should include
¡
everything it needs to include.
Cost-beneficial Cost-beneficial: i.e. benefits from using the
¡ ¡
data should outweigh the costs of obtaining it.
User-targeted: i.e. senior managers need
¡
User-targeted summaries, junior managers need more detail.
¡
Relevant: i.e. omit any data which is irrelevant
Relevant ¡
¡
for a decision.
Authoritative: i.e. sources of information
¡
should be a reliable.
Authoritative
¡
Timely: i.e. the information should be available
¡
Timely when it is needed
¡
Easy to use: i.e. information should be
¡
concise, clearly presented and sent using the
Easy to use correct medium and communication.
¡
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45. Types of information systems
Transaction processing system
¡
(TPS):
Office automation system (OAS)
¡
Management information system
¡
(MIS)
Executive information system (EIS):
¡
Decision support system (DSS):
¡
Knowledge Work Systems (KWS):
¡
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46. Transaction processing syst em (TPS):
A TPS collects and stores information about
¡
transactions, and controls some aspects of
transactions. A transaction is an event of interest
to the organisation. It is a basic business system.
¡ Serves the most elementary day-to-day
activities of an organisation;
¡ Supplies data for higher-level management
decisions.
¡ Can have strategic consequences (i.e.
airline reservation system)
¡ Usually has high volumes of input and
output
Abdisalam Issa-Salwe, Thames Valley University
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47. Office automati on system (OAS)
OAS provides individuals effective ways to
¡
process personal and organisational data,
perform calculations, and create
documents.
e.g. word processing, spreadsheets, file
managers, personal calendars,
presentation packages
used for increasing personal productivity.
¡
They reduce quot;paper warfarequot;.
OAS software tools are often integrated
¡
(e.g. Word processor can import a graph
from a spreadsheet) and designed for
easy operation.
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48. Management i nformation system (MIS)
converts TPS data into information
¡
for monitoring performance and
managing an organisation.
Transactions recorded in a TPS are
analysed and reported by an MIS.
They have large quantities of input
data and they produce summary
reports as output. Used by middle
managers. An example is an annual
budgeting system.
Abdisalam Issa-Salwe, Thames Valley University
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49. Executive information system (EI S)
Also known as an Executive Support System
¡
(ESS), it provides executives information in
a readily accessible, interactive format. They
are an MIS for executive use. An EIS/ESS
usually allows summary over the entire
organisation and also allows drilling down to
specific levels of detail.
Used by top level (strategic) management.
¡
They are designed to the individual. They let
the CEO of an organisation tie in to all levels
of the organisation. They are very expensive
to run and require extensive staff support to
operate.
Abdisalam Issa-Salwe, Thames Valley University
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50. Decision support syst em (DSS)
Helps strategic management staff (often
¡
senior managers) make decisions by
providing information, models, or analysis
tools. For support of semi-structured and
unstructured decisions (structured decisions
can be automated).
Used for analytical work, rather than
¡
general office support.
They are flexible, adaptable and quick.
¡
Their inputs are aggregate data, and they
¡
produce projections.
Abdisalam Issa-Salwe, Thames Valley University
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51. Knowledge Work Systems (KWS)
KWS are used by technical staff.
¡
KWS use modelling functions to
convert design specifications into
graphical designs.
They may include computer-aided
¡
design/manufacture (CAD/CAM).
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52. Operational-level Systems
Support operational managers by
¡
keeping track of the elementary
activities and transactions of the
organisation. The principle purpose
of systems at this level is to answer
routine questions and track the flow
of transactions through the
organisation. Covers things such as
sales, receipts, cash deposits,
payroll, credit decisions, flow of
materials.
Abdisalam Issa-Salwe, Thames Valley University
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53. Knowledge-level Systems
Support knowledge and data workers in
l
an organisation. The purpose of these
systems is to help the organisation
discover, organise and integrate new
and existing knowledge into the
business, and to help control the flow
of paperwork. These systems, specially
in the form of collaboration tools,
workstations, and office systems, are
the fastest growing applications in
business today.
Abdisalam Issa-Salwe, Thames Valley University
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54. Management -level Systems
Designed to serve the the monitoring,
l
controlling, decision-making, and
administrative activities of middle managers.
These typically provide periodic reports rather
than instant information on operations. Some
of these systems support non-routine decision-
making, focusing on less-structured decisions
for which information requirements are not
always clear. This will often require information
from out with the organisation, as well as from
normal operational-level data.
Abdisalam Issa-Salwe, Thames Valley University
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55. Strategic-level Systems
Help senior management tackle and
¡
address strategic issues and long-
term trends, both within the
organisation and in the external
environment. Principal concern is
matching organisational capability
to changes, and opportunities,
occurring in the medium to long
term (i.e. 5 - 10 years) in the
external environment.
Abdisalam Issa-Salwe, Thames Valley University
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56. Abdisalam Issa-Salwe, Thames Valley University
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57. Abdisalam Issa-Salwe, Thames Valley University
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58. Reference
BPP, Information Systems, Study Text, Paper 2.1,
¡
BPP Professional Education, United Kingdom.
Lachlan M. MacKinnon, Information: Types of
¡
Information System Systems,
http://www.macs.hw.ac.uk/~lachlan/dbislectures/le
ctures/types.ppt,
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