CHAPTER 1 Introduction To Business Information System INTRODUCTION

CHAPTER 1 Introduction To Business Information System

INTRODUCTION What is Information Technology? A combination of hardware, software & telecommunication systems that’s supports; Operations Improve productivity Help managers make decisions. IT is becoming important business tool for all organizations, therefore: Vital to ensure that business gets the most out of any system it introduces. How? ? – Ensure that the IT system supports your business & adds value to it.

INTRODUCTION Key part of IT involves system analysis & design, which is the process of developing Information System that effectively uses o o o Hardware Software Data Process People To support the companies business objective.

INFORMATION SYSTEM DEFINITION What is Information System? An arrangement of people, data, process, information presentation, and information technology that interacts to support & improve day to day operations in a business. It also supports the problem solving and decision making needs of management and users.

INFORMATION SYSTEM Data is considered raw material. Information is a the data that have been processed / transformed. Processing is the task of changing the data into information. Data Input Process Information Output A system can be simple(ex, microwave) or complex (ex, NASA).

BUSINESS INFORMATION SYSTEM What is Business Information System? An information system within organization that supports one of the traditional functions of business such as marketing, finance or production. IT professionals must understand company’s business operations in order to design successful systems. WHY? – each business situation is different.

SYSTEM PROCESS Input Data Process The that flows into the system in some form action of manipulating the input into a more useful form. Output Presenting INPUT data the nformation in an user friendly way Hardware Software PROCESS OUTPUT information

BUSINESS PROCESS MODELING What is a Business Profile? Defines a company’s overall functions, processes, organizations, products, services, customers, suppliers, competitors, constraints & future direction. Why you need Business Profile? – to understand company’s operations, system analyst first develop a business profile & then creates a series of business model.

BUSINESS PROCESS MODELING Business Model Graphically represents business functions that consists of business process such as sales accounting & purchasing which performs specific tasks. Business Process Describes specific events, tasks &b desired results. A business model might consist of an event, sub-processes & results.

CATEGORIES OF COMPANIES There are 3 types; Production oriented companies Primarily manufacture and sell products such as the microchips. Service oriented companies Primarily offer information or services or sell goods produced by others. Internet-dependent firm Described as dot. company because its primary business is on a commercial website rather than using traditional business channel.

THE GROWTH OF E-COMMERCE Internet based commerce is known as E-commerce. Includes both B 2 C & B 2 B. To succeed in web based marketing, a company must offer an attractive user interface that is reliable, powerful & secure.

BUSINESS INFORMATION SYSTEMS COMPONENTS Information system has 5 components ; hardware software people Information System Processe s data

BUSINESS INFORMATION SYSTEMS COMPONENTS Hardware Refers to the physical layer of the information system. Includes ; computers, networks, communication equipments, scanner, printer, digital capture device, global positioning satellite (GPS) equipment & other technology based infrastructure.

BUSINESS INFORMATION SYSTEMS COMPONENTS Software Consists of system software & application software. System software – controls the hardware and software system environment & includes the operating system, communication software & utility programs that handles common functions such as; Sorting data Converting files into different formats Making backups. Also allows user to access LAN/WAN on internet. Application software – consists of program that process data to produce information needed by users.

BUSINESS INFORMATION SYSTEMS COMPONENTS Data are raw facts that describe people, object & events in an organization such as customer’s name. An important component for every system & will be processed & transformed into information and stored in a file in database.

BUSINESS INFORMATION SYSTEMS COMPONENTS Processes / Procedures Defines the task that must be performed by people who work with the system, including users, managers & information system staff. Procedures typically are described in written documentation manuals and online reference material.

BUSINESS INFORMATION SYSTEMS COMPONENTS People Refers to the users who use the information system. Also called as end-user includes employees, customers, vendors or others who directly interacts with the system

CHARACTERISTIC OF BUSINESS INFORMATION SYSTEM (BIS) BIS should have certain characteristics of valuable information such as; Accurate Complete Flexible Reliable Relevant Timely Secure Verifiable Simple Economical Accessible

HOW AN ANALYST LEARNS ABOUT AN INFORMATION SYSTEM How an analyst learns about information system? By asking questions about the system & how it supports business operation. Sample questions; Does this system interact with other systems? To determine the major business systems & communication links in a large company. What is the system’s boundary? Indicates where one system ends & another system begins. The boundary between 2 systems is not always a clear cut.

HOW AN ANALYST LEARNS ABOUT AN INFORMATION SYSTEM Will the system handle specialized business needs? Many firms require specialized system for information management that is unique to their company or industry. What is the size of the company, & what growth is forecasted? Large & small companies in the same industry have different information system requirements.

BASIC TYPES OF BUSINESS INFORMATION SYSTEM Types of information systems in a large company Business Information System Enterprise Computing System Transaction Processing System Business Support Systems Knowledge Management Systems User Productivity System Information System Integration

ENTERPRISE COMPUTING SYSTEM Refers to information systems that supports companywide data management requirements. Ex : airline reservation system, credit card billing systems. It can improve data security and liability by imposing a company-wide framework for data access & storage. Many hardware & software vendor targets the enterprise computing market & offers a wide array of products & services.

TRANSACTION PROCESSING SYSTEM Transaction Processing (TP) system & online transaction processing (OLTP) system are called operational system because they process data generated by day-to-day business operations. Ex : customer billing, accounts receivable & warranty claim processing. TP captures necessary data & triggers a set of updates when a specific transaction occurs, such as sales order.

BUSINESS SUPPORT SYSTEM Provides job related information support to users at all levels of a company. The system can; Analyze transactional data Generate information needed to manage & control business processes. Provide information that leads to better decision making.

BUSINESS SUPPORT SYSTEM Roles of Business Support Systems in a service provider covers 4 areas; Product management Customer management Require a single view of the customer & regularly need to support complex hierarchies across customer-facing applications. Revenue management Supports the sales & management of products, offers & bundles to businesses & mass-market customers. Focuses on billing, charging & settlement that can handle any combination of OSS services, products & offers. Fulfillment management Normally associated with operational support system through BSS are often the business driver for fulfillment management

KNOWLEDGE MANAGEMENT SYSTEM Also called expert systems because they simulate human reasoning by combining a knowledge base & interference rules that determine how the knowledge is applied. Knowledge Management could be any of the following; Document based – any technology that permits creation/management/sharing of formatted documents. Ontology based – similar to document technologies in the sense that systems of terminologies are used to summarize the document Based on AI technologies – uses customized representation scheme to represent the problem domain, provide network maps showing the flow of communication.

USER PRODUCTIVITY SYSTEM Provide employees at all organizational levels with a wide array of tools that can improve quality & job performance. User productivity is enhanced by using; LAN/WAN, email, voicemail, fax, video conferencing, word processing, automated calendars, database management, spreadsheet, desktop publishing, presentation graphic, intranet and internet

INFORMATION SYSTEMS INTEGRATION Most large companies requires systems that combine enterprise computing, transaction processing, business support, knowledge management & user productivity features.

ORGANIZATIONAL STRUCTURE Due to downsizing & business process re-engineering, many companies reduced the management levels & delegated responsibilities to operational personnel. Top management CEO, President, Vice President Middle management Director, managers Lower management Supervisor, team leader, coordinator Operational employees Tech support, team member, production worker

TOP MANAGEMENT Task? – develop long range strategic plans that defines the company’s overall mission & goals. To carry the task out, they ask questions such as; How much should the company invest in IT How much will internet sales grow in the next 5 years? Should the company build new factories / contract out the production functions.

MIDDLE MANAGEMENT Responsible to monitor activities of subordinates & to generate reports for upper management. They need more detailed information than top managers, BUT less information than lower management personnels.

LOWER MANAGEMENT Responsible to coordinate operational tasks, make necessary decisions & ensure that the right tools, materials & training are available. They have to oversea operational employees & carry out day-to-day operational plans. Consists of supervisors, team leaders & coordinators.

OPERATIONAL EMPLOYEES Uses Transaction Processing System to enter & receive data they need, to perform their jobs. In many companies, operational employees also need information to handle tasks & make decisions that were assigned previously to supervisors. This trend is called empowerment & it gives employees more responsibility & accountability.

INFORMATION TECHNOLOGY DEPARTMENT Develops & maintains a company’s information system. Small firm may require only one person to handle all computer support activities & services, BUT in large corporation, many people with specialized skill required. IT group provides technical support, which includes 6 main functions; Application development System support Database administration Network administration User support Web support