CIS 465 Fall ‘99 - IS OverviewPage 1 Information Systems: An Introduction and Overview or...

CIS 465 Fall ‘99 - IS Overview

Information Systems: An Introduction and Overview

or“What’s In A Name”


What is an Information System?

Let’s look at some different definitions and then explore the context of an IS in the organizational setting.

The contrasting definitions should provide a variety of different perspectives.


Historical Background The Data Processing Industry grew rapidly in the

1960’s, however, the “quantity” of output, most often, far outstripped the “quality” of output.

The growth of the 1960’s and 1970’s saw a shift from “computer” orientation, to “information” orientation.

The role of “information resource manager” in the organization offered an opportunity to migrate from the technocratic image of the past, and establish an image as a business manager, a general manager, an information manager. Today this is the role of the CIO - Chief Information Officer.


John Diebold (1979) wrote:

“Information, which in essence is the analysis and synthesis of data, will unquestionably be one of the most vital corporate resources in the 1980’s. It will be structured into models for planning and decision-making. It will be incorporated into measurements of performance and profitability. It will be integrated into product design and marketing methods. In other words, information will be recognized and treated as an asset.”


Davis and Olson: (1985)

A management information system is:

• an integrated user-machine system

• for providing information

• to support the operations, management, analysis, and decision-making functions in an organization.

• The system utilizes:

– computer hardware and software

– manual procedures

– models for analysis, planning, control, and decision-making

– a database


IFIP/BCS (1985)

An information system is a system which assembles, stores, processes, and delivers information relevant to an organization (or to society) in such a way that the information is accessible and useful to those who wish to use it, including managers, staff, clients, and citizens. An information system is a human activity (social) system which may or may not involve the use of computer systems.

International Federation for Information Processing/British Computing Society 1885 curriculum for information systems.


McNurlin and Sprague (1989 & 1999)

“The mission for information systems in organizations is to improve the performance of people in organizations through the use of information technology.”

The ultimate objective is performance improvement - a goal based on outcomes and results rather than a “go-through-the-steps process” goal.

The focus is the people who make up the organization. Improving organizational performance is by the people and groups that comprise the organization.

The resource for this improvement is information technology.


Turban (1990)

A management information system is a formal, computer-based (but need not be) system intended to retrieve, extract, and integrate data from various sources in order to provide timely information necessary for managerial decision-making.

An MIS is a business information system designed to provide past, present, and future information appropriate for planning, organizing, and controlling the operations of the organization.


Alter (1992)

An information system is a combination of • work practices

• information

• people, and

• information technologies

organized to accomplish goals in an organization.


Zwass (1992)

A Management Information System is an organized portfolio of formal systems for obtaining, processing, and delivering information in support of the business operations and management of an organization.


Laudon and Laudon (1995)

Information system - (definition) Interrelated components that collect, process, store, and disseminate information to support decision-making, control, analysis, and visualization in an organization.


Turban, McLean, Wetherbe (1996)

An information systems is a collection of components that collects, processes, stores, analyzes, and disseminates information for a specific purpose.

The major components of a computer-based information system (CBIS) can include (1) hardware, (2) software, (3) a database (4) a network (5 )procedures, and (6) people.

The system operates in a social context, and the software usually includes application programs which perform specific tasks for users.


Alter (1996)

An information system is a system that uses information technology to capture, transmit, store, retrieve, manipulate, or display information that is used in one or more business processes.

A business process is a related group of steps or activities that use people, information, and other resources to create value for internal or external customers. Business Processes consist of steps related in time and place, have a beginning and end, and have inputs and outputs.


Lucas (1997)

Information systems may be described by five of their key components:

• Decisions

• transactions and processing

• information and its flow

• individuals or functions involved

• communications and coordination


Zwass (1998)

Information System - An organized set of components for collecting, transmitting, storing, and processing data in order to deliver information for action.


Turban, McLean, Wetherbe (1999)

An information system is a physical process that supports an organizational system by providing information to achieve organizational goals.


Alter (1999)

A work system is a system that produces products for internal and external customers through a business process performed by human participants with the help of information technology.

An information system is a particular type of work system that uses information technology to capture transmit store, retrieve, manipulate, or display information, thereby supporting one or more other work systems.


Information Systems Today The early focus on IS was for the support of operations,

management, analysis and decision-making in organizations.

A significant emphasis was on models of planning and control.

The late 1980’s and early 1990’s saw IS expand from the support not only of decision-making, but but for improved communication support as well. Social impacts began to be recognized.

The explosion of the Web has added the important characteristic of providing information access.

Today the emphasis in organizations is on the support of business processes.


Terminology In many textbooks and contexts, the terms

Management Information Systems (or MIS) and Information Systems (IS) are used interchangeably.

However, in other contexts, Management Information Systems are considered as a subset of the more general Information Systems. MIS are considered to be information systems which provides information specifically for managing an organization generally at a tactical or middle management level. Information Systems would be a more general term that can include other systems (e.g. group communication systems). We will generally follow this convention.


Types of Information Systems

Transaction Processing Systems (TPS). Management Information Systems (MIS). Decision Support Systems (DSS). Expert Systems (ES). Executive Information Systems (EIS). Office Automation Systems (including document

management systems). GroupWare, Computer-Supported Cooperative

Work (CSCW), and other communication systems. and much more ….


The Early History of IS with other disciplines

IS and Managerial Accounting IS and Operations Research IS and Management and Organization Theory IS and Computer Science IS and Cognitive Psychology


Information Systems vs. Computer Science

Computer Science has its concentration in the study of algorithms, computation, software, and data structures.

Information Systems is an extension of management and organization theory that applies technical capabilities and solutions initially developed by computer science, to tasks in organizations.


Information Technology

Information Technology (IT) sometimes refers to the technology component of an information system.

However, the concept is often used by many to describe the collection of all information systems in organization.


Putting Things in Context - I

Information Technology - the hardware, software, and networks that make Information Systems possible.

Information System - a system that uses information technology to capture, transmit, store, retrieve, manipulate, and display information.

Business process - a related group of steps or activities that use people, information, and other resources, to create value for internal or external customers.


Putting Things in Context - II

Firm (or organization) - consists of a large number of interdependent business processes that work together to generate products of services in a business environment.

Business environment - includes the firm and everything else that affects its success, such as competitors, suppliers, customers, regulatory agencies, and demographic, social, and economic conditions.


Frameworks for Understanding IS

A framework is a brief set of ideas for organizing a thought process about a particular type of thing or situation. Any useful framework helps make sense of the world’s complexity by identifying topics that should be considered and showing how these topics are related.

We will consider two such frameworks:

• The Gorry Scott-Morton Framework for MIS

• The Work-Centered Analysis (WCA) Framework by Alter.


The Gorry and Scott-Morton Framework for Management

Information Systems

Note: This framework was first discussed in 1971. The term Management Information Systems refers to the broad category we now refer to simply as Information Systems.


The Gorry and Scott-Morton Framework for MIS

At the time, (1971), the framework provided a much needed perspective on the role of MIS in organizations.

It is more a framework on managerial activities and a way of looking at decisions in an organizations. The framework helps us understand the role of MIS in organizations.

Focuses on the nature and characteristics of managerial decisions made at different levels in an organization.

Also Focuses on the characteristics of information that pertains to the decisions made at these levels.


Structural Outline

Combines the works of Robert Anthony and Herbert Simon

Robert Anthony’s taxonomy for Managerial Activity (1965).

Herbert Simon’s Categorization of Decision Types (1960).

The works of Anthony and Simon are important foundations of Organizational Theory today.


Robert Anthony’s Taxonomy for Managerial Activity

You can divide the entire management hierarchy along the following levels:

• Operations Control

• Management Control

• Strategic Planning

Organizational Members

Operational Control

Management Control

StrategicPlanning

,

Anthony’s Management

Hierarchy


Operational Control

concerned with carrying out the tasks necessary and that need to be performed

lower level of the organizational hierarchy performed by supervisors of small work units

concerned with planning and control of short-term (a week to six months) budgets and schedules.


Management Control/Tactical Management

concerned with the utilization and management of resources to achieve organizational objectives.

concerned with effective and efficient performance. Performed by middle managers (e.g. department

heads, plant managers). set out for one to three years.


Strategic Planning Level

focuses on decisions on the objectives for the organization as a whole and also on the way to achieving them

typically involves a small number of high level people

Carried out by top corporate executives and corporate boards responsible for setting and monitoring long-term directions for the organization three or more years into the future


Information Requirements

Gorry and Scott Morton were concerned with the information requirements at the these three levels

They noted that the requirements for information at these levels were very different.

The next slide shows these differing requirements

Information Requirements by Management Level

Characteristicsof Information

OperationalControl

ManagementControl

StrategicPlanning

Source Largely Internal Internal andLargely External

Scope Well defined,narrow

Very wide

Level ofAggregation

Detailed Aggregate

Time Horizon Historical Future

Currency Highly current Need not be up tothe minute

RequiredAccuracy

High Lower, Estimatesare acceptable

Frequency of Use Very frequent Infrequent, ad-hoc


Simon’s Categorization

concerned with the manner in which humans solve problems in an organization

differentiated between programmed and nonprogrammed decisions


Simon’s Programmed Decisions

they are repetitive and routine follow a preset definite procedure each time they

occur programmable is a better concept Gorry and Scott Morton call it structured


Simon’s Nonprogrammed Decisions

they are novel, unstructured no cut-and-dried method for handling the problem

exists calls for intelligent, adaptive, problem-oriented

action nonprogrammable is a better concept Gorry and Scott Morton call it unstructured


Structured vs. Unstructured

They are not bipolar concepts decisions range in a continuum from structured to

unstructured ..… In between you might have decisions called semi-

structured.


Combined = A Framework

Gorry and Scott Morton combined the two concepts of Simon’s Decision Making with Anthony’s Decision Making Levels and provide the following Framework for Decision-Making

(See next slide)

A FRAMEWORK FOR DECISION MAKING

Type ofDecision/Task

OperationalControl

ManagementControl

Strategic Planning Support Needed

Structured1Inventory reordering

2Budget Analysis,short-term forecasting,Make or Buy Analysis

3Plant Location,FinancialManagement(investment),Distribution Systems.

Clerical, MIS, ORModels, TransactionProcessing Systems

Semi-structured

4Bond trading,Production Scheduling

5Credit Evaluation,Budget Preparation,Plant Layout, ProjectScheduling, RewardSystems Design

6Building New Plant,Mergers &Acquisitions, NewProduct Planning,CompensationPlanning, QualityAssurance Planning

Decision SupportSystems

Unstructured

7Selecting a Cover for aMagazine, ApprovingLoans, Buying Software

8Negotiating, RecruitingExecutives, Lobbying

9R & D Planning,New TechnologyDevelopment, SocialResponsibilityPlanning

Human Intuition,Expert Systems,Executive Support Systems

A FRAMEWORK FOR DECISION MAKING

Type ofDecision/Task

Operational Control ManagementControl

Strategic Planning Support Needed

Structured1Inventory reordering

2Budget Analysis,short-termforecasting, Makeor Buy Analysis

3Plant Location,FinancialManagement(investment),DistributionSystems.

Clerical, MIS, ORModels, TransactionProcessing Systems

Semi-structured4Bond trading, ProductionScheduling

5Credit Evaluation,BudgetPreparation, PlantLayout, ProjectScheduling,Reward SystemsDesign

6Building NewPlant, Mergers &Acquisitions, NewProduct Planning,CompensationPlanning, QualityAssurancePlanning

Decision Support Systems

Unstructured7Selecting a Cover for aMagazine, ApprovingLoans, Buying Software

8Negotiating,RecruitingExecutives,Lobbying

9R & D Planning,New TechnologyDevelopment,SocialResponsibilityPlanning

Human Intuition,Expert Systems,ExecutiveInformation/SupportSystems

Support Needed MISManagement ScienceOR Models

ManagementScienceDSS,EIS, ES

EIS,Neural Networks,Executive MentalModels


Framework Comments

The original framework has been augmented with the right-most column and bottom row showing some typical support systems available. These are meant be be illustrative and not inclusive.

The framework shows the need for information systems to support all cells.

The figure as well as the characteristics of systems shows that the information requirements vary considerably from among management levels in an organization.

The information requirements are also diverse.


Implications: Total MIS is a myth Gorry and Scott Morton showed that the prevalent

concept (at that time, 1971) of a “totally-integrated-management-information-system” was a myth.

Since we can not have a single “total MIS”, we need the concept of what David and Olsen called a federation of integrated information systems.

Today technology provides appropriate tools which gives the appearance of information being totally integrated.

This is the basic reasoning for the separation of today’s data warehouses from systems to support current operations.


Information Systems for Operational Control

Operational Control: process of ensuring operational activities are carried out effectively and efficiently.

Processing support:

• Transaction processing

• Report processing

• Inquiry processing


Information Systems for Management Control

Management Control: Information that is required by managers of departments, profit centers, etc. to measure performance, decide on control actions, formulate new decision rules to be applied by the operational personnel and allocate resources.

Processing support:• Planning and budget models to assist managers in finding

problems and preparing plans and budgets.

• Variance reporting programs; Exception Reports

• Problem analysis models

• Decision models to analyze a problem situation and provide solutions

• Inquiry models to assist in responding to queries.


Information Systems for Strategic Planning

Systems that are designed to help managers perform the strategic planning function

This function has the responsibility of developing strategies to achieve objectives and goals

Such systems might have to provide information on:

• economic outlook

• political environment

• competitive environment

• impact analysis of alternative strategies, etc.


A Short Sidebar….

Transaction Processing Systems

vs.

Management Information Systems

presented now since this is an important distinction, so let’s get it right early!


Transaction Processing Systems

A transaction is an elementary activity conducted during business operations (e.g. merchandise sale).

Earliest Information Systems in organizations. Support the monitoring, collection, storage,

processing, and dissemination of the organization’s basic business transactions.

Provides backbone for many other applications involving other support systems.

On-line systems called OLTP vs. batch Routine, repetitive tasks.


Business Transactions in a Factory

Payroll: employee time cards, employee pay and deductions, payroll checks.

Purchasing: purchase orders, deliveries, payments (accounts payable)

Sales: sales records, invoices and billing, accounts receivable, sales returns, shipping

Manufacturing: production reports, quality-control reports

Finance and Accounting: financial statements, tax records, expense accounts

Inventory management: materials usage, inventory levels


Transaction Processing Systems - 3

In addition to processing the routine critical organizational activities, transaction processing systems also provide the source data for many other type of information systems used at the tactical and strategic levels in the organization.

Recall that tactical and strategic levels use aggregated data, over multiple time periods. TPS are often the source of this information. TPS often populate data warehouses which provide on-line analytical processing (OLAP).

TPS Data Entry Screen


Management Information Systems Systems that convert TPS data into information for

monitoring performance and managing an organization.

The MIS provides periodic information to functional (operational) and mid-level (tactical) managers on routine matters such as operational efficiency, effectiveness, and productivity.

Example: An HRIS can provide the HR manager with percentages of people who are on vacation or call in sick. It can compare actual to forecasted values, or to an industry average.

MIS are used for planning, monitoring, and control.

Sample MIS Management Report


The Work Centered Analysis (WCA) Framework


The Work Centered Analysis (WCA) Framework

The Work-Centered Analysis (WCA) is a framework for thinking about business processes and the information systems that support them. It focuses on the work being done.

Work is the application of human and physical resources such as people, equipment, time, effort, and money to generate outputs used by internal or external customers.

It ideas from several prominent management theories including Total Quality Management, business process reengineering, and systems theory.


Alter’s (1995) Definition of an Information System

An information system is a system that uses information technology to capture, transmit, store, retrieve, manipulate, or display information that is used in one or more business processes.

A business process is a related group of steps or activities that use people, information, and other resources to create value for internal or external customers. Business Processes consist of steps related in time and place, have a beginning and end, and have inputs and outputs.


Examples of Information Systems Supporting Business Processes

Bar-code scanners and computers identify items sold and calculate the bill (Performing customer checkout).

Airline reservation system keeps track of flights and accepts reservations for customers (making airline reservations).

System that identifies people by scanning and analyzing voice prints (preventing unauthorized access to restricted areas).

Word processing system for typing and revising book chapters (Writing a book).


Elements of the Work-Centered Analysis (WCA) Framework:

The internal or external customers of the business process

The products (or services) generated by the business process.

The steps in the business process. The participants in the business process. The information the business process uses or

creates. The technology the business process uses.


CUSTOMERS

PRODUCTS

BUSINESS PROCESS

PARTICIPANTS INFORMATION TECHNOLOGY

The WCA Framework


The WCA Framework

The WCA framework implies that although people sometimes speak of computers as systems, the system business professionals should focus on is the system performing the work.

The system performing the work is much broader than the technology. It includes the business processes, the participants, any information used, and any technology used.

The links are two-way, implying that the elements should be in balance. Also, changes in one place may result in changes in other elements.

CIS 465 Fall ‘99 - IS OverviewPage 1 Information Systems: An Introduction and Overview or...

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