Introduction to Business

Information Systems

Business Information Systems

Co-
Learning Objectives:

• Introduction to Business Information

Systems;
• Components of a Business;
• Types of Business Information Systems;
• Systems That Span the Enterprise.

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Introduction
Major reasons for spending on information technology
by companies:
•Achieve operational excellence through higher levels of
efficiency, quality, and productivity;
•Create new products, services, and business models;
•Raise revenue and profits while lowering costs by increasing
customer and supplier intimacy;
•Improve decision making for managers and employees;
•Increase competitive advantages;
•Insure survival caused by business environment changes

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Perspectives on Information Systems and
Information Technology
Information technology (IT) infrastructures
include:
•Hardware;
•Software;
•Data management;
•Telecommunications;
•Networking technologies.

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Dimensions of Information Systems

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Dimensions of Information Systems

Bottom Line: Information literacy is more than just

clicking a mouse, pounding the computer
keyboard, or surfing the Web.
Organizations, technology, and people, are integral
dimensions of information systems. The Internet
has led many businesses to restructure
themselves and take advantage of extranets,
intranets, and the World Wide Web distribution
channels.

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Components of a Business
Organizing a Business: Basic Business Functions

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Types of Business Information
Systems
Systems from a Functional Perspective
Sales and Marketing Systems
Examples of Sales Marketing and Information Systems

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Types of Business Information
Systems – Cont.
Systems from a Functional Perspective
Manufacturing and Production Systems
Examples of Manufacturing and Production
Information Systems

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Types of Business Information
Systems – Cont.
Systems from a Functional Perspective
Finance and Accounting Systems
Examples of Finance and Accounting Information
Systems

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Types of Business Information
Systems – Cont.
Systems from a Functional Perspective
Human Resources Systems
Examples of Human Resources Systems
Information Systems

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Systems from a Constituency
Perspective
Types of Decisions
There are generally three classifications of decisions:
• Unstructured: requires judgment, evaluation, and
insight into non-routine situations.
Usually made at senior levels of management
• Structured: repetitive, routine, with definite (clear-cut)
procedures for making the decision.
Usually made at the lowest organizational levels
• Semistructured: A combination of the two.
Usually made by middle managers.

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Pyramid Diagram of Organizational levels
and information requirements

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Transaction Processing Systems

The information systems used in this level of the

organization are transaction processing
systems (TPS).
Characteristics of TPS:
•Record the routine transactions that take place in
everyday operations.
•Very rich with data and the data is very detailed.
•Typically helps with structured decisions.
•Relies heavily on Data Management Technology
(database technology).

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Management Information Systems and
Decision-Support Systems
Management information systems (MIS) require
information on a periodic basis instead of on a daily
recurring basis like those using a transaction
processing system.

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How Management Information Systems Obtain
Their Data from the Organization’s TPS

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Characteristics of MIS
1. Answers structured questions
2. Produces routine reports. The term routine refers to: (1)
scheduled (e.g., monthly or quarterly, but not daily like
TPS), and (2) has predefined contents and format.
3. Helps middle managers in monitoring and controlling
their units. Monitoring refers to the ability to see
information about the performance of their units and
controlling refers to the manager ability to correct
problems by making decisions based on the comparing
the actual performance and the desired performance.
4. MIS works typically by summarizing and aggregating
the data collected by TPS.
5. MIS, compared to DSS, is more general in terms of
type of problems and scope of the organization.

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Decision-support systems (DSS)
Decision-support systems (DSS) also serve the
management level of an organization, but in a
somewhat different way from an MIS.

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Characteristics of DSS
1. Helps managers in semi-structured decisions
2. Produces ad-hoc reports (ad hoc is Latin for “to this”, in other
words for a specific purpose)
3. Interactive. That is, there is a dialog between the manager and the
DSS
4. A DSS has analytical capabilities. For instance, it provide what-if
analysis and goal seeking analysis. An advanced DSS might even
utilize data mining or artificial intelligence.
5. Relies on management science models (e.g., formulas) to help in
solving the structured part of the problem.
6. Typically, the output of a DSS is graphical. A class of DSS referred
to as Geographical Information Systems (GIS) utilizes maps in
producing output.
7. Usually relies on external data
8. Specific. DSS usually is designed to address domain-specific
problems. That is, the problems in a specific field.

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Executive Support Systems
Executive support systems (ESS) are used at
the very upper echelons of management.
Model of an Executive Support System

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Characteristics of ESS

1. Helps top managers with unstructured

problems
2. Typically the interface is dashboard that is
imbedded in a personalized web portal.
3. Relies heavily on data from outside the
organization along with current and historical
data from within the organizations.

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Interrelationships Among Systems

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Systems That Span the Enterprise
Enterprise Applications

Enterprise systems (also known as enterprise

resource planning (ERP) ) aim to correct the
problem.
The main goal of enterprise resource planning
(ERP) systems is to bridge the communication
gap between all departments and all users of
information within a company.

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Systems That Span the Enterprise
Enterprise Application Architecture

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Supply Chain Management
Systems
Supply chain management systems offer new
opportunities for companies to address the
business objective of supplier intimacy by
integrating information systems with suppliers and
customers and lowering costs for everyone.
Supply chain management system, a form of
interorganizational systems (IOS), create a
cohesive network for buying the raw materials,
creating the candy bars, and getting the packaged
goods to the retail outlets.

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Lists the benefits of using a supply chain
management system to get the right product in the
correct quantity to the right place with the least cost
How Information Systems Facilitate Supply Chain
Management

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Customer Relationship
Management Systems
Customer Relationship Management (CRM)
systems involve business processes in all the
functional areas and every management level of a
firm.
The ideal CRM system provides end-to-end
customer care from receipt of order through
product delivery and addresses the business
objective of customer intimacy.

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Knowledge Management Systems
Knowledge management systems (KMS) help a
business meet the objectives of new products and
services and improved decision making.

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