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Transcript of 2. C1-Information Systems
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W H Y A N D W H A T ?
1
Chapter 1:Business Information Systems.
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WHAT are business information systems ?2
What is a “ business information system" ?
What is "information"
What is a "system"
What is an "information system"
Types of information systems
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Raw data with
no meaning.
Information is datathat has been givenmeaning by way of
relational
connection.
Knowledge is theappropriatecollection of
information, suchthat it‟s intent is to be useful. Know-
how!
Wisdom calls uponall the previous
levels of consciousness. It is
a uniquely humanstate; wisdom
requires one to havea soul.
Bron: “Russell Ackoff ”
The difference between
understanding andknowledge is the
difference between“learning” and“memorizing”!
2*2 = 41224*45=?
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Data versus Information9
Data raw observed facts of events like business transactions: “symbolic”
representation of facts. e.g. raw facts, symbols, numbers, documents…
Information processed data useful for the decision making process; data are the
building blocks of information; provides answers to “ who”, “ what”, “ where”, and “ when” questions.
Knowledge ability to perform certain tasks by combining data with own
information and experience. Knowledge and information are personal, one person‟s
information is merely data for another unless a meaningis put on it!
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Data versus Information11
Data: raw observed facts of events like businesstransactions
Information: processed data useful for the decision
making process
331 Soap1.29863 Coffee 4.69173 Milk 79
331 Soap 1.29663 Ham 3.29524 Mustard 1.49113 Beer .85…
Data
Sales Region: North westStore: Store #122
Item No. Description Items sold Turnover 331 Soap 7156 9231,24
Information
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Data versus Information12
Data: 50109
Information: 5/01/09 Date of exam
€50,109 The wage of an employee of KUL? 50109 Zip code of Granger, Iowa, USA
50109 Zip code of Alpartir, Spanje
Etc…
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$5.80
$6.00
$6.20
$6.40
$6.60
$6.80
$7.00
$7.20
$7.40
1 2 3 4 5 6 7 8 9 10
S t o c k
P r i c e
Last 10 Days
Data versus Information13
Data 6.34 6.45 6.39 6.62 6.80 6.85 6.71
7.10 7.12 7.28
InformationGoogle INC
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Types of information14
Hard versus soft information Hard information: quantitative, objective, verifiable,
e.g. a student with 75% on Business Information Systems
Soft information: qualitative, subjective, difficult to verify,e.g. a student with a ready pen, “culture”,…
Internal versus External information Internal information: exists within the company
External information: acquired from external sources
Meta(data) information
Data about the data, like the data format, the value range, the ownerof the data…
Operational/tactical/strategic information (cfr.infra)
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Example meta information15
Data „prodnr‟, data about this data:
The fact that prodnr is numerical;
The fact that the values of prodnr have a range between 1 and9999;
The fact that the production department assigns the productnumbers;
Etc…
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Metadata/Meta information16
Dublin Core
standard developed to describe electronic sources to improvethe traceability of documents.
Title, author, subject, description, publisher
Date, format, source, language, etc.
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Meta information in XML17
meta information is useful to search more efficiently (cfr. course 1st bach)
<?xml version="1.0"?>
</Book><Title>My Life and Times</Title><Author>Paul McCartney</Author><Date>1998</Date><ISBN>1-56592-235-2</ISBN><Publisher>McMillin Publishing</Publisher>
</Book>
Metadata: tagsData: content
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Metadata of a banana18
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Why is metadata so important?19
Metadata
Making information more comprehensible to humans andcomputers!
Find documents of the author “Manu De Backer”
Improve efficiency of search instructions
Increasing value of information
People can still use/understand information, also after theowner of the information leaves the company.
Improves sharing of information between peoples/companies Improves data security, the origin of information/data is
captured.
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WHAT are business information systems ?20
What is a “ business information system" ?
What is "information"
What is a "system“
Why do we consider something as a system? What is an "information system"
Types of information systems
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What is a system: Definition21
„ A system is a set of elements. These elements arerelated to each other and, possibly, to elements from
the universe of discourse and are joined for a specificpurpose.‟
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What is a system22
Elements
physical objects, energetical units, biological units…
Relations
relations with regard to distance and time, physical relations,logical relations, cause/effect relations,…
Purposes delivery of services, production of finished goods, obtaining
profits, stimulating employment, …
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Traffic systemElements:road infrastructure, vehicles, person as driver orpedestrian or traffic agent, legislation, traffic signs,… Relations: distances between cities, speed allowed in relation witha specific place, …
Purposes: optimizing traffic flow, maximizing security, …
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What is a system ?24
Traffic system Elements
road infrastructure, vehicles, person as driver or pedestrian ortraffic agent, legislation, traffic signs,…
Relations distances between cities, speed allowed in relation with a specific
place, …
Purposes
optimizing traffic flow, maximizing security, …
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What is a system ?
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What is a system ?
26
Supplier
Customer
Design Production Sales Shipping Service
A company
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What is a system?27
Why do we consider something as asystem ? to describe and study something
the description of a system is dependent of the intended
purpose
The skeletonMuscles
Vascular systemBloodDigestion
NutrientsRespirationThe skinSensesNervous systemHormones
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Description dependent to the intended purpose: what do you want to study?
28
Company
As regarded by the
environment
Black Box
Product
Contract loan
Business
Organization
Corporate policy
Company as systemof components
Internal functioning
White Box
OperationsProcedures tocontract a loan
Policy
Interest ratesCreditworthiness
Information
systems
to support
Operations
Tactical
& Strategic
Policy
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What is a system ?29
Hierarchy of systems Each system is a part of a more organization-wide system
Systems can consist of elements that are systems
Traffic system: element: vehicle
But vehicle is also a system, composed of a number of elements
To study a system:
Importance of insights in the hierarchical structure of systems,the concept subsystem and system environment
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Hierarchy of system30
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What is a system ?32
Types of systems Physical systems and abstract systems
Car – design of a house
Open and closed systems
Chicken – egg
Static and dynamic systems
House – Garden
Formal and informal systems
Legislation - networking & lobbying
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What is a system ?33
Process
component
Managementcomponent
Environment
A system “works”,
“processes” something to
achieve a specific goal.
Input
component
Output
component
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Business systems34
The nature of business systems and the components of a business system.
ObjectivesIntentionsForecasts
Work
MaterialsFinanceData
Products
ServicesInformation
ProductionPurchase
DistributionSales
Info processing
Authority, consumers, customers, suppliers, subcontractors,
employees, trade unions, stakeholders, competitors, …
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WHAT are business information systems ?35
What is a “ business information system" ?
What is "information"
What is a "system“
Why do we consider something as a system? What is an "information system"
Types of information systems
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Information systems36
„ A system is a set of elements. These elements are relatedto each other and, possibly, to elements from theuniverse of discourse and are joined for a specificpurpose.‟
A business information system is a set of relatedcomponents to collect, search, process, store anddistribute information in order to support the
coordination and control of the decision makingprocess within an organization (company,government, non-profit organization…)
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Information systems37
The nature of information systems and the components of aninformation system.
Informationmanagement
Raw
data
Relevant
information
Data storage
and processing
Management component
Input component Process component Output component
Environment = Company
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Examples of data processing38
Registration Storage of new employee records
Classification Classifying emails as SPAM
Reorder/Sort
Sorting employees based on last name Aggregation
Calculating aggregate sales per region
Mathematical calculations Calculating wage of employee
Selection Selecting employees who live in Leuven
Reports Reporting monthly sales figure
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Information systems
39
Supplier
Customer
Design Production Sales Shipping Service
Information?
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Information systems vs organization40
Management
Input OutputProces-
sing
Environment
Informationmanagement
Raw
data
Relevant
Information
Data storage
andprocessing
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Socio-technical perspective42
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CASE: Daimler Chrysler group (L&L)43
Mercedes – Smart – Commercial Vehicles 104 offices, 37 countries 14 000 suppliers, 13 000 points of sale in 200 countries Studied process: starting from car design until after sales service
and repair:
no silo approach !
Streamline & Integrate : Integrated Volume Planning
Sales records production planning suppliers
Global Supplier Portal
Interactions with suppliers (6000 registered) Internal to pass information to business unit
Powerway Quality control for components BEFORE production lines
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CASE: Daimler Chrysler group44
Organization
Technology
Production andsupply processesredesign
SupportingInformation systems:
Powerway
Global Supplier
Integrated VolumePlanning
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CASE: Daimler Chrysler groep45
Organization
Technology:
Software
databasehardware
network
Production and
supply processes
redesign
Supporting
Information systems:
Powerway
Global Supplier
IntegratedVolume Planning
Strong mutualDependency:
Design throughInformation systems
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WHAT are business information systems ?46
What is a “ business information system" ?
What is "information"
What is a "system“
Why do we consider something as a system? What is an "information system"
Types of information systems
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Support
Strategies
Support
BusinessDecision Making
Support BusinessProcesses & operations
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Types of business systems48
By functional domain: accountancy, personnel, production, logistics, ....
By Management Level Operational Business system
Managing performance at detail level E.g. payment of wages, purchase of goods and materials
Tactical Business system Determining how the activities on operational level should be done, at which
moment and with which resources Determining the order levels, the credit limits and creating the weekly
planning
Strategic Business system Determining long term purposes of the company Launching a new product
As the Management level increases, the degree of complexity increases!
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Business systems49
Daily operations and decision, based on structured information,immediate results
OPERATIONAL
Mid long term decisions, identify execution plans for groupdecisions, project management
TACTICAL
Long term decisions, on group level, often based on unstructuredinformation, what if analysis
STRATEGIC
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Types of business systems50
planning
controlOPERATIONAL
STRATEGIC
TACTICAL
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Types of Information systems51
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Most important types of IS52
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Types of Information systems53
By functional domain: Sales and Marketing
order processing
pricing
forecasts
Production & logistics
process control
planning
opening a new production unit
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Types of Information systems56
By Functional Domain Accountancy
registration financial transactions
short term budgeting
long term planning
Personnel registration recruitments and dismissal
distribution of pay scales
planning personnel needs
... If there is a separation between functional domains,
they are called “isolated silos”.
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Mutual relation ?58
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Types of Information systems59
The operational information system provides information of the operational processes of a
company.
These processes are well structured, unambiguous and
routinely. Operational decisions regard the short term, occur relatively
often, and contain little uncertainties.
The required information on this level is: easy to determine,
independent of the individual, well structured, and occursparticularly within the organization.
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Types of Information systems60
The operational information system input: transactions, events
processing: register, search, improve, list, sort, …
output: detail records of 1 business object (customer, order,
product, …), list, summary, planning, … who: executive personnel
Informatics:
Transaction processing systems
( OLTP = On-line Transaction Processing)
ERP
Transaction processing
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Transaction processingInformation system: example
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ERP Systems63
Enterprise Resource Planning (ERP) systems: Single information system for organisation-wide
coordination and integration of many business processes
“
Off-the-shelf ”
modules basedon best practices
“Plain vanilla” ERP vs. customisation
Vendors: SAP,Oracle/PeopleSoft,Sage Group (UK), …
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Types of Information systems64
Operating system/business system: provides information of operating processes of the company
Information used on both tactical and strategic level
Tactical middle management and executives
MIS
DSS
Strategic upper level management
ESS
f l l l
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Information systems on tactical level65
Decisions concerning mid long term, less often, less routinely, more
uncertainties or risks.
Required information less easy to determine, dependent of individual and moment,
less well structured, need for external information increases.
Informatics
Information from operational level + Data warehouses
Reporting and analysis tools
f i
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Management Information Systems66
Management Information Systems (MIS): Management level: reporting and access to business
information
input: transaction records, data warehouses, simple models
processing: routine reporting, simple models, low-levelanalysis
output: summary, exception reports
users: Middle managers
l
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MIS Example67
(Source: Laudon & Laudon, p.47)
MIS E l
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MIS Example68
Example report:
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D i i S t S t
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Decision Support Systems71
Decision Support Systems (DSS): Management level: data analysis for decision making
input: data – low volume and data warehouses, analyticalmodels, data analysis tools
processing: interactive, simulation output: special reports, decision analysis, answers to specific
queries
users: professionals, staff managers
DSS E l
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DSS Example72
Voyage-estimating DSS:Designed to support assignment of cargoes to freight ships in orderto meet customer delivery schedule at minimum cost, optimise loadingpattern, …
• Given c, how to set x to optimise y?
• What if problem params (e.g. price of fuel) change?
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I f ti t St t i l l
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Information systems on Strategic level74
Decisions concerning long term, rather incidental and irregular
character, much uncertainty and/or risk.
Required information very hard to determine, strongly dependent of individual,
highly less structured and occurs particularly in the company ‟senvironment.
Informatics Data warehousing, OLAP, data mining, web mining, ...
E ti S t S t
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Executive Support Systems75
Executive Support Systems (ESS): communication and calculations on strategic level
input: external and internal aggregated data
processing: graphical, simulation, interactive
output: projections, answer to queries
users: Senior managers
M d l f t i l ESS
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Model of a typical ESS76
(Source: Laudon & Laudon, p.49)
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Mutual relations between systems
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Mutual relations between systems78
Other types of IS
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Other types of IS79
Additional types of IS
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Additional types of IS80
Office AutomationSystems (OAS)
Knowledge WorkSystems (KWS)
(Source: Laudon & Laudon, Management Information Systems 8, chapter 2)
Additional types of IS
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Additional types of IS81
Office Automation Systems (OAS) Office automation
text processing, voicemail, e-mail, video conferencing,scheduling systems, …
Knowledge Work Systems (KWS): specialized systems for scientists, engineers, financial analysts,
… and other knowledge workers to obtain new knowledge (e.g.creation or improvement of products)
Computer-aided design (CAD), virtual reality systems, stability calculations, ...