Chapter 2

IT Support Systems: Concepts and Management

1

Learning objectives

• Define information system

• Types of Information System

• Describe and contrast Transaction Processing

System and Functional Information System

• Identify major enterprise internal support

systems and relate them to managerial functions

2

• Describe support of IT along the supply chain in using

ERP and CRM

• Discuss information infrastructure and architecture

• Compare client server architecture, mainframe based

legacy systems and P2P architecture

• Describe different types of web based information

systems and their functionalities

3

• Describe Software-as-a-service (SaaS) and

software oriented architecture (SOA)

environments

• describe how Information resources are

managed

• Describe roles of ISD and end users

4

Information System: concept and definition

• IS- one that collects, processes, stores analyzes and

disseminates data and information for a specific purpose

• Components:

– Hardware

– Software

– Data

– People

– Procedure

– Application Program

• Collection of application programs in a single department is

usually considered as a departmental Information System 5

Data, Information and Knowledge

• Data

– elementary description of things, events, activities and

transactions that are recorded, classified and stored

– Not organized to convey any specific meaning

• Information

– organized data so that they have meaning and value to

the recipient

6

• Knowledge

– organized and processed data to convey

understanding, experience, accumulated learning and

expertise as they apply to the current problem and

activity

7

Classification and types of IS

By type of support provided

Classification of Information System

By Organizational Levels

8

Classification by organizational levels

• Can be stand alone but usually they are interconnected

Levels of Information systems 9

• Personal and productivity systems

– Small systems built to support many individuals

– Known as Personal Information Management (PIM)

– Intend to support the activities of individuals to ease their

work or life

– Through acquisition, organization, maintenance, retrieval

and sharing of information

10

– E.g. PDA, calculator

– Designed to increase our productivity and satisfaction

– Abundant in organizations, inexpensive and have

fairly standard capabilities

11

• Transaction Processing System

– Supports repetitive information processing tasks such

as

– Periodic financial, accounting and other routine

business activities

– Supports the monitoring, collection, storage,

processing and dissemination of the organization’s

basic business transactions

12

– Provides input to other IS

– Critical to success of any organization since they

support core operations

– collects data periodically or in real time

13

• E.g. of TPS

– In retail stores, data flows from Point of Sale

to database

– Reduces the level of inventory

– Increases the revenue in company’s cash

position

14

• Functional & Management Information Systems

– cover some repetitive and some occasional

activities

– Major functional information systems are

• Accounting

• Finance

• Production/operation

• Marketing &sales

• Human resource management 15

– FIS ensure that business strategies come to fruition in an

efficient manner

– Provides periodic reports on operational efficiency,

effectiveness and productivity

– Two types of functional Information Systems:

• Those support managers (MIS)

– By providing periodic reports, summaries, comparisons

– Helps to make better decisions

• Those support other employees (analysts, other staff) in

functional areas16

• Enterprise Information Systems

– EIS support business processes that are performed by

two or more departments

– Business process is a collection of activities performed to

accomplish a clearly defined goal and may cross

departmental / organizational boundaries

– EIS follows such processes and usually integrate tasks

done in different departments

– E.g. Enterprise Resource Planning (ERP)17

Process A: Typical TPS

Process B: Procurement

Process C: Customer Services

Process D: Order taking n fulfilling

18

• Interorganizational systems

– Connect two or more organizations

– E.g. worldwide airline reservation system

– Most common are those that connect buyers

and sellers

19

Departmental, enterprise and inter-organizational information systems

20

• Global Information Systems

– IOS that connect companies located in two or more

countries

– E.g. many e-commerce systems

• Very large and special systems

– Include many subsystems of the previous levels

– Industry specific systems

21

Classification based on the type of support provided

• MIS

– Middle managers

– Provides routine information for planning, organizing,

and controlling operations in functional areas

• Office Automation System (OAS)

– Office workers

– Increases productivity of office workers

22

• CAD/CAM

– Engineers and drafts people

– Allows engineers to design and test prototypes

– Transfers specifications to manufacturing facilities

• Communication and collaboration systems

– All employees

– Enables employees, partners and customers to

interact and work together efficiently23

• Desktop publishing systems

– Office workers

– Combines text, photos, graphics to produce

professional quality documents

• Decision support systems (DSS)

– Decision makers, managers

– Combines models and data to solve semi structured

problems with extensive user involvements24

• Document management systems

– Office workers

– Automates flow of electronic documents

• Group Support Systems (GSS)

– Supports working processes of groups of people

25

• Expert systems (ES)

– Knowledge workers, nonexperts

– Provide stored knowledge of experts to non-experts

and decision recommendations based on built-in

expertise

• Knowledge work systems (KWS)

– Managers, knowledge workers

– Supports the gathering, organizing and use of

organizational knowledge26

• Neural networks, Data mining

– Knowledge workers, professionals

– Learn from historical cases, even with vague or

incomplete information

• Business Intelligence (BI)

– Decision makers, managers, knowledge workers

– Gathers and uses large amount of data for analysis

by business analytics & intelligent systems

27

• Mobile computing systems

– Mobile employees

– Supports working outside the physical boundaries of

organization

• Automated Decision Support Systems (ADS)

– Frontline employees, middle managers

– Supports customer care employees and sales people

to make quick real time decisions28

Relationship between IS

• Each IS has sufficiently unique characteristics

• There is information flow among these entities and

systems

• E.g. MIS extracts information from TPS and BI

receives information from Data warehouse and MIS

• As the technology changes, interrelationship and

coordination among the different types of systems

continue to evolve29

Interrelated Support Systems

30

How IT supports people and organizational activities

• Organizational activities

– Operational

• Deal with day-to-day activities of an organization

• E.g. assigning task to employees and recording their

working hours

• Short term in nature

• Supporting IS are TPS, MIS and mobile systems

• Used by supervisors, operators and clerical employees

31

– Managerial

• Also called tactical activities

• Deal with middle management activities such as

short term planning, organizing and control

• Middle managers can get quick answers to queries

from such systems using BI reporting and query

capabilities

32

33

– strategic

• Activities or decisions that deal with situations that may

significantly change the manner in which business is

done

• Involve long-range planning

• E.g. introducing new product, expanding business by

acquiring supporting businesses, Moving operations to

the foreign countries

• From such long range planning, companies derive their

short range plans, budgeting and resource allocation

34

• Strategic activities help organization in other two

ways:

– Strategic response activities

• React quickly to a major competitor’s action or to

any other significant change in the enterprise’s

environment

• e.g. Kodak could beat Japanese company in

developing the disposable camera

35

– Innovative strategy (initiator of change)

• Instead of waiting for a competitor to introduce a

major change or innovation, an organization can

be the initiator of change

36

Who performs what activities and how IT supports them?

37

• Executives and Managers

– Responsible for strategic decisions

– Support systems:

• BI (Business Intelligence)

• Corporate Performance Management (CPM)

38

• Middle Managers

– Tactical decisions

– Support systems:

• Functional Information systems

• MIS

39

• Staff Support

– Advisors and assistants to top and middle level managers

– Knowledge workers

– Create information and knowledge as a part of their work

and integrate it into business

– E.g. financial and marketing analysts, production

planners, lawyers, accountants

– Support systems:

• Search engines

• Expert systems

40

• Lower level managers, frontline employees

– Operational decisions

– Support systes:

• ADS

• Functional IS

• MIS

41

• Clerical staff

– Use, manipulate or disseminate information

– Data workers

– E.g. bookkeepers, secretaries

– Support systems:

• Office automation

• Communication systems

• Document management42

How IT supports supply chain and enterprise systems?

• Supply chain – concept describing the flow of

– materials,

– information,

– money and

– services

from raw material suppliers through factories and

warehouses to the end customers

43

A simple supply chain

44

• Supply chain is difficult to manage since it needs to

coordinate

– Several business partners

– Internal corporate departments

– Numerous business processes

– Many customers

45

• IT support of supply chains is divided according to three

segments of supply chain

– Support of internal supply chain

– Support of upstream supply chain

– Support of downstream supply chain

46

Support of internal supply chain

• Involves TPS & other enterprise information

systems & functional information systems

• Special SCM softwares are available

– E.g. inventory management, production scheduling

47

Support of upstream supply chain

• To improve procurement activities and relationships with

suppliers

Support of downstream supply chain

•Supports downstream supply chain in two areas

•Customer relationships

•Order taking and shipments to customers

48

Information systems infrastructure & architecture

• Information infrastructure

– Consists of

• the physical facilities, services and management that support

all shared computing resources in organization

• Their integration, operation, documentation, maintenance &

management

49

– 5 major components

• Computer hardware

• Software

• Network & communication facilities

• Databases and data workers

• Information management personnel

50

Information technology architecture

• A high level map or plan of information assets in an

organization including the physical design of the building

that holds the hardware

• On the web, IT architecture includes the content and

organization of the site and the interface to support

browsing and search capabilities

51

• Guide for current operations and blueprint for future

directions

• Creating IT infrastructure is a cyclic process which is

driven by business architecture which describes

organizational plans, visions, objectives and problems

and the information required to support them

52

Emerging computing environments: SaaS

• SaaS (Software as a Service)

• Popular enterprise model in which computing resources

are made available to the user when they are needed

• Also referred to as SaaS, On demand computing, Utility

computing or hosted services

• Instead of buying and installing expensive and annoying

packaged enterprise applications, user can access them

over a network with a browser

53

• No need to buy h/w or s/w

• Paid for through a fixed subscription fees or payable per

an actual usage fee

• Offer standardized, componentized, common & lower

cost s/w services which can be sourced at will from

some type of service provider

54

Why SaaS was needed?

• Enterprises are challenged of being able to meet

fluctuating demands efficiently to become an adaptive

enterprise

• To overcome this challenge, SaaS like models were

developed

• enterprise’s demand on computing resources can vary

drastically from time to time

• Maintaining sufficient resources to meet peak

requirements can be costly55

• If enterprises cut the cost by maintaining only minimal

computing resources, there will not be sufficient

resources to meet the peak requirements

• So to balance the increasing requirements & cost of

resources, SaaS is developed

56

Who should be the provider of these services?

• Either a s/w developer/host such IBM or Oracle

or

• Third party intermediary such as an application

service provider

57

Implementing SaaS- a utility computing concept

• Utility computing is computing that have– Computing resources available on demand from

virtual utilities around the globe– Always on and highly available– Secure– Efficiently metered– Priced in a pay-as-you-use basis– Dynamically scaled– Self healing– Easy to manage

58

• If utility computing becomes successful, all s/ws will become

a service and be sold as a utility one day

• Limitations

– Cost (can be advantage or disadvantage)

– what the client needs and what the provider offers aren't in alignment

– Reliability

• utility computing company is in financial trouble or goes out of business

– Hard to do in heterogeneous data centers

– Works better for some applications than for others

– Needs extra security (attractive targets for hackers)

– Distribution of software is different from distribution of utilities

59

Grid computing

• Conventional networks are designed to provide communication

among devices

• The same n/ws can be used to support the concept of grid

computing in which– Unused processing cycles of all computers in a given network can be

harnessed to create powerful computing capabilities

• Grid computing coordinates the use of a large no. of servers &

storage, acting as one computer

• Saves money and resources

• Candidates for grid computing– Companies doing multi-hour-long processing jobs– Making complex scientific & mathematical computations 60

Mobile computing & mobile commerce

• Computing paradigm designed for mobile employees and

others who wish to have a real-time connection from anywhere

between a mobile device and other computing environments

• M-commerce is a commerce in a wireless environment such

as through wireless devices like cellular phones & PDAs

• Enables users to access internet without needing to find a

place to plug-in

– E.g. smart phones

• Emerging mobile technology: pervasive computing

61

• In pervasive computing, computation becomes

part of environment

• Computation will be embedded in things, not in

computers

• Improves efficiency in work & living tasks

• Enriches the quality of life through art, design &

entertainment62

Service Oriented Architecture (SOA)

• Enterprises need to be

– adaptive and

– respond more quickly to consumer demands & at the same time

– ensure security, data integrity & regulatory compliance

• Current architecture & infrastructure may not support the

level of flexibility needed in rapidly changing business

environment

63

• Solution: don’t form a monolithic rigid solution,

• systems are developed as federation or composite

applications which are tied together only at the point of

execution

• This enables alternative s/w components to be

substituted between each use of a system allowing much

greater flexibility

64

• Thus the basic idea behind the SOA is to reuse &

reconnect existing IT assets/ services rather than more

time consuming & costly developments of new systems

• In SO environment, organizations make resources

available to participants via a n/w as independent

services that can be accessed in a standardized way

using web services

• SaaS at its highest level, must be delivered as a SOA &

must embody web services65

• Advantages of SOA

– Reduced integration cost

– Improved business/IT alignment

– Extension & leveraging of existing IT investments

– Faster time to assemble new applications

– Lower IT maintenance cost

66

Web services

• Self-contained, self-describing business & consumer

modular applications

• Delivered over internet

• User can select and combine through any device (from

PC to mobile phones)

• By using set of shared protocols & standards these

applications share data & services without requiring

human beings to translate the conversion

67

• Results in real time links among the online processes of

different systems & companies

• Fosters new interactions among businesses & create

more user friendly web for consumers

• Provide inexpensive & rapid solutions for application

integration, access to information & application

development

68

Components of web services

69

• Service

– Means by which the needs of consumer are fulfilled with the

capabilities of s/w provided

• Consumer

– Function that consumes the result of a service provided by provider

• Provider

– Function that performs a service in response to a request by a

consumer

• Registry (directory)

– Contains all the information regarding registered services including

detailed descriptions

70

Working of web services

• Step 1: providers of services publish (register) their

services in the registry

• Step 2: consumers search them in registry either private

or public

• Step 3: once consumer finds a match

• Step 4: he sends a request to the service provider to get

the specific programmed service

• Step 5: provider provides the services to the customer

71

Virtualization

• Separates business applications & data from h/w

resources

• This allows companies to pool hardware resources

& assign them to applications as needed

• Types of virtualization

– Storage virtualization

– N/w virtualization

– H/w virtualization

72

Storage virtualization

• Pooling of physical storage from multiple

n/w storage devices into a single storage

device

• Which is then managed from a central

console

73

N/w virtualization

• Combines the available resources in a n/w by

splitting the n/w load into manageable parts

• Each of these parts can be assigned to a

particular server on network

74

h/w virtualization

• Use of s/w to emulate h/w or a total computer

environment other than the one in which s/w is

actually running

• It allows a piece of h/w to run multiple OS

images at once

• Sometimes called as virtual machine

75

Advantages of virtualization

• Increases the flexibility of IT assets

• Allows companies to merge IT infrastructure

• Reduce maintenance & administration cost

• Prepares for strategic IT initiatives such as grid,

utility computing and SOA

76

Managerial Issues

• Which IT resources are managed by whom?

– Responsibility of Information resource management is

divided between two entities

– Information System Department (ISD)

• Responsible for corporate level shared resources

– End users

• Responsible for departmental resources

• The role of the IS Department

– Changing from purely technical to managerial and strategic

77

Managerial Issues (contd..)

• The transition to a digital enterprise

• How to deal with the outsourcing and utility

computing trends

• Ethical issues

78