2. C1-Information Systems

7/31/2019 2. C1-Information Systems

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W H Y A N D W H A T ?

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Chapter 1:Business Information Systems.



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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4



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8

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=?



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: 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




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…



$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 6.34 6.45 6.39 6.62 6.80 6.85 6.71

7.10 7.12 7.28

InformationGoogle INC



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)



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…



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.



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



Metadata of a banana18



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.






What is a "system“

Why do we consider something as a system? What is an "information system"




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.‟



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, …



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, …



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 ?



What is a system ?

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Supplier

Customer

Design Production Sales Shipping Service

A company



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



Description dependent to the intended purpose: what do you want to study?

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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




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



Hierarchy of system30




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




Process

component

Managementcomponent

Environment

A system “works”,

“processes” something to

achieve a specific goal.

Input

component

Output

component



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, …



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…)



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



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



Information systems

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Supplier

Customer

Design Production Sales Shipping Service

Information?



Information systems vs organization40

Management

Input OutputProces-

sing

Environment

Informationmanagement

Raw

data

Relevant

Information

Data storage

andprocessing



Socio-technical perspective42



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



CASE: Daimler Chrysler group44

Organization

Technology

Production andsupply processesredesign

SupportingInformation systems:

Powerway

Global Supplier

Integrated VolumePlanning



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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Support

Strategies

Support

BusinessDecision Making

Support BusinessProcesses & operations



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!



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



Types of business systems50

planning

controlOPERATIONAL

STRATEGIC

TACTICAL



Types of Information systems51



Most important types of IS52




By functional domain: Sales and Marketing

order processing

pricing

forecasts

Production & logistics

process control

planning

opening a new production unit



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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




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.




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



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), …




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



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



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



MIS Example67

(Source: Laudon & Laudon, p.47)

MIS E l



MIS Example68

Example report:



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D i i S t S t



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



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



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



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



Model of a typical ESS76

(Source: Laudon & Laudon, p.49)



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Mutual relations between systems



Mutual relations between systems78

Other types of IS



Other types of IS79

Additional types of IS



Additional types of IS80

Office AutomationSystems (OAS)

Knowledge WorkSystems (KWS)

(Source: Laudon & Laudon, Management Information Systems 8, chapter 2)

Additional types of IS



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, ...

2. C1-Information Systems

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