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IS312 Information Systems for Business

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IS312 Information Systems for Business Lecture 2 Information Systems for Value Driven Business [ Ch. 2 ] * Virtual Reality - Examples: games, cargo transport systems ... – PowerPoint PPT presentation

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Title: IS312 Information Systems for Business


1
IS312 Information Systems for Business
  • Lecture 2
  • Information Systems
  • for Value Driven Business
  • Ch. 2

2
LEARNING OBJECTIVES
  • How business make profit (Value Chain)
  • How IS create added value
  • How business make decision (Organizational
    Pyramid)
  • How IS help in decision making process

3
How Business Survive/Make ProfitValue Chain
Model
     
VALUE
FIRM INFRASTRUCTURE
HUMAN RESOURCE MANAGEMENT
TECHNOLOGY DEVELOPMENT
                                             
PROCUREMENT
INBOUND LOGISTICS
OPERATIONS
OUTBOUND LOGISTIC
MARKETING SALES LOGISTIC
SERVICE
MARGIN
COST
4
How Business Survive/Make ProfitValue Chain
Model . . .
5
Value-Added Activities
  • Customer-Value-Added Activity (maximize)
  • a business process that a customer is willing to
    pay for
  • Business-Value-Added Activity (minimize)
  • a business process that is essential to managing
    an organization
  • Non-Value-Added Activity (eliminate)
  • customer will not pay for business value will
    not be increased
  • Goals of a business system effective(do right
    thing), efficient(do thing right), competitive
    (do thing differently).

6
How Information Systems Add Values ?
  • Automating doing things faster/cheaper
  • Organizational Learning doing things better way
    (from lessons learned)
  • Supporting Strategy doing things smarter than
    competitors to meet customers needs.

7
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8
What IT/IS can do
  • IT/IS improves or innovates the use of knowledge
    in operations of the value chain and value system
  • IT/IS improves products or services by increasing
    quality, reducing costs, or adding desirable
    features
  • IT/IS provides timely and reliable information to
    enhance the decision-making process
  • IT/IS improves communication between internal as
    well as external business entities to increase
    efficiency in production and distribution

9
Value Chain Five Forces Model Revisited
10
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11
Whats in a Name . . .
  • Computer Engineering Hardware ( Chemistry)
  • Computer Science Software ( Pharmacy)
  • Information Systems ( Medicine)
  • IS Specialist ( Physician)
  • YOU, YOUR BUSINESS (Patient)
  • Systems (over counter vs. prescribed drugs)
  • Business failures ( DEATH !!!)

12
IT vs. IS
Combinations of hardware, software, and telecom
networks that people build and use to collect,
create, and distribute useful data in
organizations (for decision making)
  • Combinations of hardware, software, and telecom
    networks use to process data

13
Information Systems
  • Combination of
  • Hardware
  • Software
  • Data
  • Telecommunications networks
  • People
  • Procedures (business rules)

14
Decision-Making Levels of an Organization
15
Decision-Making Levels of an Organization
  • Executive level
  • Long-term decisions (Strategies)
  • Unstructured decisions
  • Managerial level
  • Decisions covering weeks and months (Tactics)
  • Semi-structured decisions
  • Operational level
  • Day-to-day decisions (Operations)
  • Structured decisions

16
Operational Level
17
IS Architecture
18
Managerial Level
19
IS Architecture
20
MANAGERIAL SUPPORT SYSTEMS
  • Interaction Between a TPS and DSS

21
MANAGERIAL SUPPORT SYSTEMS
  • Four quantitative models used by DSSs include
  • What-if analysis assess impact of a change in a
    variable/assumption on the model
  • Sensitivity analysis assess impact on other
    variables when one variable is changed repeatedly
  • Goal-seeking analysis find necessary inputs for
    a desired level of output
  • Optimization analysis find optimum value for
    output when other inputs are changed repeatedly

22
Executive Level
23
IS Architecture
24
STRATEGIC SUPPORT SYSTEMS
  • Executive information system (EIS) A
    specialized DSS that supports senior level
    executives within the organization
  • Granularity level of details in the
    model/process
  • Visualization graphical display of
    patterns/relationships of large amount of data
  • Digital dashboard visual summary for tracking
    critical success factors and key performance
    indicators

25
STRATEGIC SUPPORT SYSTEMS
  • Interaction Between a TPS and EIS

26
STRATEGIC SUPPORT SYSTEMS
  • Most EISs offering the following capabilities
  • Consolidation aggregation of data
  • Drill-down ability to view details of data at
    different levels of aggregation
  • Slice-and-dice ability to look at information at
    different perspectives.

27
Enhancing Decision Making With Information Systems
28
Information Systems that Span Organizational
Boundaries
29
Information Systems Supporting the Functional
Areas
30
Functional Area Information Systems
31
Information Systems inside Organizations
32
Functional Area Information Systems
33
Information Technology outside Organization
34
Capabilities of Information Systems
  • Perform high-speed, high-volume numerical
    computations
  • Provide fast, accurate communication and
    collaboration within and among organizations
  • Store huge amounts of information in small space
  • Allow quick, inexpensive access to vast amounts
    of information worldwide
  • Interpret vast amounts of data quickly and
    efficiently
  • Increase effectiveness and efficiency of people
    working in groups in one place or around the
    world
  • Automate semiautomatic business process and
    manual tasks

35
Why Information Systems Important to
Organizations Society ?
  • IT will reduce the number of middle managers.
  • IT will change the managers job.
  • IT impacts employees at work.
  • IT provides quality-of-life improvements.

36
MAKING BUSINESS DECISIONS
  • Managerial decision-making challenges
  • Analyze large amounts of information
  • Apply sophisticated analysis techniques
  • Make decisions quickly

37
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38
DECISION-MAKING PROCESS
  • The six-step decision-making process
  • Problem identification
  • Data collection
  • Solution generation
  • Solution test
  • Solution selection
  • Solution implementation

39
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40
METRICS MEASURING SUCCESS
  • Critical success factors (CSFs) The crucial
    steps companies make to perform to achieve their
    goals and objectives and implement strategies
  • Create high-quality products
  • Retain competitive advantages
  • Reduce product costs
  • Increase customer satisfaction
  • Hire and retain the best professionals

41
METRICS MEASURING SUCCESS . . .
  • Key performance indicators (KPIs) The
    quantifiable metrics a company uses to evaluate
    progress toward critical success factors
  • Turnover rates of employees
  • Number of product returns
  • Number of new customers
  • Average customer spending
  • External (e.g., market share) vs. Internal KPI
    (e.g., ROI)

42
Efficiency and Effectiveness Metrics
  • Efficiency MIS metrics Measure the performance
    of MIS itself, such as throughput, transaction
    speed, and system availability
  • Effectiveness MIS metrics Measures the impact
    MIS has on business processes and activities,
    including customer satisfaction and customer
    conversation rates

43
The Interrelationship Between Efficiency And
Effectiveness Metrics
  • Ideal operation occurs in the upper right corner

44
The Interrelationship Between Efficiency And
Effectiveness Metrics
  • Benchmark Baseline values the system seeks to
    attain
  • Benchmarking A process of continuously
    measuring system results, comparing those results
    to optimal system performance (benchmark values),
    and identifying steps and procedures to improve
    system performance

45
SUPPORT ENHANCING DECISION MAKING WITH IS
  • Model A simplified representation or
    abstraction of reality that helps managers to
  • Calculate risks
  • Understand uncertainty
  • Change variables
  • Manipulate time to make decisions

46
THE FUTURE ARTIFICIAL INTELLIGENCE (AI)
  • Artificial intelligence (AI) Simulates human
    intelligence such as the ability to reason and
    learn
  • Intelligent system Various commercial
    applications of artificial intelligence

47
ARTIFICIAL INTELLIGENCE (AI)
  • 1. Expert system Computerized advisory
    programs that imitate the reasoning processes of
    experts in solving difficult problems
  • 2. Neural Network Attempts to emulate the way
    the human brain works
  • Fuzzy logic A mathematical method of handling
    imprecise or subjective information

48
ARTIFICIAL INTELLIGENCE (AI)
  • 3. Genetic algorithm An artificial intelligent
    system that mimics the evolutionary,
    survival-of-the-fittest process to generate
    increasingly better solutions to a problem
  • - Shopping bot Software that will search
    several retailer websites and provide a
    comparison of each retailers offerings including
    price and availability

49
ARTIFICIAL INTELLIGENCE (AI)
  • 4. Intelligent agent Special-purpose
    knowledge-based information system that
    accomplishes specific tasks on behalf of its
    users
  • 5. Virtual reality - A computer-simulated
    environment that can be a simulation of the real
    world or an imaginary world

50
EVALUATING BUSINESS PROCESS
  • Businesses gain a competitive edge when they
    minimize costs and streamline business processes
  • Customer facing (front-office) process
  • Business facing (back-office) process

51
EVALUATING BUSINESS PROCESS
  • The Order-to-Delivery Process

52
MODELS MEASURING PERFORMANCE
  • Workflow Includes the tasks, activities, and
    responsibilities required to execute each step in
    a business process
  • Business process modeling (or mapping) - The
    activity of creating a detailed flow chart or
    process map of a work process showing its inputs,
    tasks, and activities, in a structured sequence
  • Business process model - A graphic description of
    a process, showing the sequence of process tasks,
    which is developed for a specific
  • As-is vs. to-be process model

53
MODELS MEASURING PERFORMANCE
54
IMPROVING OPERATIONAL BUSINESS PROCESSES -
AUTOMATION
  • Steps in Business Process Improvement

55
SUPPORT CHANGING BUSINESS PROCESSES WITH IS
56
IMPROVING OPERATIONAL BUSINESS PROCESSES -
AUTOMATION
  • Business process improvement Attempts to
    understand and measure the current process and
    make performance improvements accordingly
  • Automation The process of computerizing manual
    tasks

57
IMPROVING MANAGERIAL BUSINESS PROCESSES -
STREAMLINING
  • Streamlining Improves business process
    efficiencies by simplifying or eliminating
    unnecessary steps
  • Bottleneck Occur when resources reach full
    capacity and cannot handle any additional demands
  • Redundancy Occurs when a task or activity is
    unnecessarily repeated

58
IMPROVING STRATEGIC BUSINESS PROCESSES -
REENGINEERING
  • Business process management (BPM) Focuses on
    evaluating and improving processes that include
    both person-to-person workflow and
    system-to-system communications
  • Business process reengineering (BPR) - Analysis
    and redesign of workflow within and between
    enterprises
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