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BUS237 Notes Ch1-9, 11-12 partial.docx

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Simon Fraser University
Business Administration
BUS 237
Peter Tingling

BUS237- Tingling- Information Systems in Business Experiencing MIS Chapter 1 Information Systems and You What is an Information System?  information system: a group of components that interact to produce information o Components:  five-component framework:  computer hardware: the physical hardware such as storage disks, keyboards, etc.  software: computer components that were not hardware; programs or applications  data  procedures  people o a.k.a. computer-based information system What is MIS?  MIS or Management Information Systems: the development and use of information systems that help businesses achieve their goals and objectives  Development and use of information systems o To have an IS that meets yours needs, you need to take an active role in that system’s development  Achieving Business Goals and Objectives o Businesses themselves don’t “do” anything o IS are created for a purpose How Does IS Differ from IT  Information technology (IT): refers to methods, inventions, standards, and products  IT is raw technology and is embedded into IS  It by itself will not help an organization achieve its goals and objectives How important are IS to Our Economy  Information and Communications Technologies (ICT) sect: industry sector most closely related to the use of information systems in Canada  Industry provides products and services that other industries, such as retail, manufacturing, insurance, or banking, rely on to get their work done  Jobs, workers in the ICT industry rising How Do Successful Business Professionals Use IS  Business professionals use numerous information systems  Project management software, collaborative systems, etc.  Business professionals need to consider IT and IS when they think about the problems and opportunities that confront a department or organization What is the Shape of Things to Come?  Moore’s Law: predicts that the number of transistors on a computer chop would double roughly every two years o One of few predictions in the area of IT that has really stood the test of time  IT is difficult to predict because it is all about innovation o Innovation brings unexpected results  Technology effects o How business professionals handle data and communication o When and how advertises allocate money What Is This Class About?  Learning to use tools such as Excel or Access to accomplish a business goal  Learn about hardware, software, content, and databases  How technology can be used to gain a competitive advantage  How IT departments how  Relationship of business processes and information systems Chapter 2 Business Processes, Information, and Decision Making “How Did This Stuff Get Here?”  Different processes successfully interacted to create/ get you stuff  Activity comes about through the interaction of business processes  Understanding business processes is critical to understanding the information systems that support them  Business processes are central to what every organization does What Is a Business Process?  Business process: a network of activities, resources, facilities, and information that interact to achieve some business objective o Examples: inventory-management processes, manufacturing processes, sales processes  Also sometimes referred to as a business system  Purchase order: lists the items orders and the quantity desired What Are the Components of a Business Process?  Activities: transform resources and information of one type into resources and information of another type. o Can consist or be made up of strictly manual activities, be automated or controlled by computers or be a combo of manual and automated activities.  Resources: items of values o Milk, a working person, cash, etc.  Facilities: structures used within the business process o Inventories, databases, factories, equipment, trucks, etc.  Information: the fourth element in the business process, used in activities to determine how to transform the inputs they receive into the outputs they produce  Business Process Modeling Notation: a standard set of terms and graphical notations for documenting business processes What is Information?  Information: knowledge derived from data; o Data: recorded facts or figures o Information is data presented with meaning  Meaningful CONTEXT o Or sometimes defined as processed data o A difference that makes a difference  Characteristics of Good Information o Accurate  Based on correct and complete data  Processed correctly o Timely  Produced in time for its intended use o Relevant  Both to the context and to the subject o Just Barely Sufficient  Enough for the purpose for which it is generated  Know what information to discard/ what is excess o Worth Its Cost  Appropriate cost for its value What Is the Role of Information in Business Processes?  Information is important o Lets us know when we need to make payments for goods or services received o Helps us keep track of what we have delivered and what has not been delivered  Keeps inventory up to date o Also beyond accounting: manage business processes  Business Process Management (BPM) o BPM: a field of management that promotes the development of effective and efficient processes through continuous  Integrating information technology into the business process.  Total Quality Management (TQM)  Six Sigma  Lean Production  Information about the process provides the ability to better manage the process itself  The better you are able to understand business processes, the better you will be able to successfully mange the process How Do Information Systems Support Business Processes?  IS are used by the activities in a business process  Sometimes several activities use one information system  What Does It Mean to Automate a Process Activity? o Automated system: work formerly done by people is now done by computers o Automation: Human Side Computer Side  Actors: Hardware, People  Computer Side: Hardware, Software  Instructions: Software, Procedures  Bridge: Data  Human Side: Procedures, People  An Information System to Support Counter Sales o Receives the customer’s payment, takes customers order, takes the items from inventory o Cashiers require less training because of this information system  An Information System to Support Payment o Payment generates an authorization and sends it to someone else, who cuts the cheque o Manual system: the information system that supports the payment activity  Manual because there are many different exceptions  An Information System to Support Purchasing o Balances the work between automation and manual activity o Counter sales, payments and purchasing How Do Information Systems support Decision Making?  Making decisions is central to managing organizations  Decisions Vary by Level o Operational decisions: concern day to day activities  Ex: How many widgets should we order from vendor A? Should we extend credit to vendor B? What invoices should we pay today?  Transaction processing systems (TPS): information systems that support operational decision making o Managerial decisions: concern the allocation and utilization of resources  Ex:  How much should we budget for computer hardware and programs for department A next year?  Show many engineers should we assign to project B?  Management information systems (MIS): information systems that support managerial decision making  MIS can be used in TWO ways: broadly- to mean the subjects in this entire book, or narrowly- to mean information systems that support managerial decision making o Strategic decisions: concern broader organizational issues  Ex:  Should we start a new product line?  Should we open a centralized warehouse in Calgary?  Should we acquire company A?  Executive information systems (EIS): information systems that support strategic decision making o Operational: short term (this week, next week) o Managerial: longer time frames (next quarter, next year) o Strategic: long term (not realized for years)  Decisions Vary by Structure o Structured decisions: one for which there is an understood and accepted method for making the decision  Ex:  A standard method for allocating furniture  A formula for computing the reorder quantity of an item in inventory o Unstructured decisions: one for which there is no agreed upon decision making method  Ex:  Assessing how well suited an employee is for performing a particular job  Predicting the future direction of the econing or the stock market  Supporting Decision Making o Intelligence gathering: the stage in which decision makers determine what is to be decided, what the criteria for the decision will be, and what date is available o Alternatives formulation: the stage in which decision makers lay out various alternatives o Choice: when the decision makers analyze choices against criteria using data o Implementation: the stage in which they “make it so!” or implement their decision o Review: the step during which decision makers evaluate the results of the decision, and if necessary, repeat process to correct and adapt What Is Your Role?  You are part of every information system you use Chapter 3 Strategy, Information Systems, and Competitive Advantage What Is the Productivity Paradox?  The Productivity Paradox: The lack of evidence of an increase in worker productivity associated with the massive increase in investment in information technology o Productivity: how IT can be used to created business value  Business value: tangible benefits for organizations through either more efficient use of resources or more effective delivery of their services to customers. Can Information Systems Improve Productivity?  Efficiency: means that business processes can be accomplished either more quickly or with fewer resources, facilities and information to accomplish activities  Effectiveness: “doing the right things”  Value chain: a network of activities that improve the effectiveness (or value) of a good or service  Margin: the difference between the price the customer is willing to pay and the cost the company incurs in moving the goods or services through the value chain  Primary activities: activities in which value is added directly to the product  Support activities: activities which do not add value directly to the product, but support primary activities How are Organizational Strategy and Industry Structure Related?  A company’s information systems strategy should support, or be aligned with, the overall company strategy.  Organizational strategy begins with an assessment of the fundamental characteristics and structure of an industry.  One model used to assess an industry structure is Porter’s Five Forces Model. The five forces determine industry profitability: o Bargaining power of customers o Threat of new entrants o Rivalry among existing firms o Threat of substitutions o Bargaining power of suppliers  Competitive strategy: the strategy an organization chooses as the way it will succeed in its industry. According to Porter, there are four fundamental competitive strategies: cost leadership across an industry or within a particular industry segment, and product differentiation across an industry or within a particular industry segment  In order to be effective, the organization’s goals, objectives, culture, and activities must be consistent with the organization’s strategy What is the Relationship between Innovation and Information Technology?  Sustaining technologies: changes in technology that maintain the rate of improvement in customer value  Disruptive technologies: introduce a very new package of attributes to the accepted mainstream products  Diffusion of innovation: defined by Everett Rogers as “process by which an innovation is communicated through certain channels over time among the members of a social system.” o Knowledge o Persuasion o Decision o Implementation o Confirmation How Do Information Systems Provide Competitive Advantage?  Organizations gain a competitive advantage by creating new products or services, by enhancing existing products or services, and by differentiating their products and services from those of their competitors  Principles of competitive advantage: o Product Implementations:  Create a new product or service  Enhance products or services  Differentiate products or services o System Implementations:  Lock in customers and buyers  Lock in suppliers  Raise barriers to market entry  Establish alliances  Reduce costs  Switching costs: locking in customers by making it difficult or expensive for them to switch to another product Can Competitive Advantage through Information Systems Be Sustained?  Sustained competitive advantage: the development of people and procedures that are well supported by the underlying technology Chapter 4 Hardware and Software Why Do You Need to Know about Information Technology?  When considering technology and how we use it, it is important to understand not only where we are, but also where we have come from  Knowing a small bit about information technology, including hardware and software, makes us more knowledgeable consumers of technology Where Did All This Information Technology Stuff Come From?  The history of information technology is rich and recent.  Early Computers: 1939-1952 o First patent on a digital computer was filed by Presper Eckert and John Mauchly, who developed the ENIAC computer o Early computers were expensive and complex  Mainframes: 1952-Present o The first commercial digital computers were large, room-sized devices called mainframes.  Were mainly used by business and government o First generation mainframes were based on now obsolete vacuum tube technology o Second generation were smaller, easier to maintain, and more reliable o Third generation included operating systems and multiprocessing o Mainframes are designed for fast processing and massive storage and for this reason they are likely to continue to be used far into the future as our need for information continues to grow.  Microcomputers: 1975-Present o Microcomputers used microprocessors as a critical piece in its development  People wanted something smaller  Early microcomputers, often had no display screen or monitor  Later, as hardware technology developed, companies such as Microsoft wrote programming languages (BASIC) and operating systems (DOS) that could be used  These had monitors, keyboards, portable floppy disks, word processors, spreadsheets and other software  Were largely stand-alone  Sharing data across two computers required saving data on a “floppy” drive and transferring the drive to another machine  Networking Personal Computers: 1985-Present o Local Area Network (LAN)  Ethernet  Allowed the connection of many personal computers together o Wide Area Network (WAN) o Internet  Summary o Price and performance advances o Small is powerful o The network is a thing What Does a Manager Need to Know about Computer Hardware?  Hardware: consists of electronic components and related gadgetry that input, process, output and store data according to instructions encoded in computer programs or software o CPU and data bus o Main memory o Magnetic disk o Optical disk—CD o Optical disk—Disk o Monitor—CRT o Monitor—LCD  Input hardware devices: includes the keyboard, mouse, document scanners, and barcode scanners  Central processing unit (CPU): sometimes called the “brain” of the computer o The machine’s “smarts” o Vary in speed, function, and cost o Works in conjunction with the computer’s main memory  Main memory: a set of cells in which each cell holds a byte of data or instruction; each cell has an address, and the CPU uses the addresses to identify particular date items o Stores computations from the CPU  Special function cards: cards that can be added to the computer to augment the computer’s basic capabilities  Output hardware: consists of video displays, printers, audio speakers, overhead projectors, and other special-purpose devices, such as large flatbed plotters  Storage hardware: saves data and programs o Magnetic disks arenh7 far the most common o Optical disks such as CDs and DVDs are also popular o “Flash” memory (USB-universal serial bus)  Computers represent data using binary digits, called bits. o A bit is either a zero or a one o Open switch=0, closed=1  Bytes: 8 bits  Kilobytes (K): 1024 bytes  Megabyte (MB): 1024K  Gigabyte (GB): 1024MB  Terabyte (TB): 1024GB  Data channel or bus: means by which the CPU reads instructions and data from main memory and writes data to main memory  Cache: a small amount of very fast memory  Operating system: a program that controls the computer’s resources as well as a block of data  Memory swapping: the movement of programs and data into and out of memory. If a computer has insufficient memory for its workload, such swapping will degrade system performance  Volatile: the cache and main memory are volatile; meaning their contents are lost when power is off  Non-volatile: magnetic disks and optical disks are non—volatile; meaning their contents survive when power is off  Hertz: cycles used to express CPU speed. What Is the Difference between a Client and a Server, and What is Cloud Computing?  Client: a computer that provides word processing, spreadsheets, database access, and usually a network connection  Servers: a computer that provides some type of service, such as hosting a database, running a blog, publishing a website, or selling foods. Server computers are faster, larger, and more powerful than client computer  Server farm: a large collection of server computers that coordinates the activities of the servers, usually for commercial purposes  Cloud computing: the concept of servers that supply applications and data. Customers do not necessarily own the computer they use, instead hardware, software and applications are provided as a service, usually through a web browser  Grid computing: several computers are used to address a single problem at the same time. Grid computing uses software to divide and apportion pieces of a program among several computers, sometimes many thousands What Does a Manager Need to Know about Software?  Instruction set: the collection of instructions that a computer can benefit a process  Four Major Operating Systems: o Windows: most important operating system for business users o Mac OS: Apple developed operating system; easy to use interfaces o Unix: has been the workhorse of the scientific and engineering communities; generally regarded as being more difficult o Linux: a version of Unix
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