Lecture4(information systems&functional applications)

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Information Systems

and

Functional Applications

Abdisalam Issa-Salwe

Faculty of Professional Studies

Thames Valley University

Abdisalam Issa-Salwe, Thames Valley University

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Why IS is important to organisations?

Understand the role and relevance of an information system aids decision making.

Identifying and evaluating appropriate information systems.

Managing the process of information gathering, processing, storage and retrieval

Managers make decisions using the information available to them at the time.


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Life-blood of the organisation


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MEDIATING FACTORS:

Environment

Culture

Structure

Standard Procedures

Politics

Management Decisions

Chance

ORGANISATIONS INFORMATION

TECHNOLOGY

The two-way Relationship between organisations and Information Technology


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About Business Strategy

Organisation has a limited set of resources (e.g. time, people, money, physical resources) and they must decide how to use those resources.

Strategy is deciding what the organisation is going to do and how it will use its resources

A business system is a collection of people, machines and methods organised to accomplish a set of specific functions.


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About Business Strategy? (cont…) Contributing to the establishment of the

organisation's long term business objectives e.g. identifying and evaluating external factors which may impact on the organisation

Identifying and appraising the organisation's skills and resources

Identifying and defining business options; evaluating these options, performing risk assessments and recommending strategies for adoption

Analysing the economic impact of environmental change upon the organisation

Analysing market and competitive developments in relation to marketing strategy

Contributing to the development of the organisation's information systems strategy as a complement to its business strategy


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Examples of Strategies

Strategy 1: Manufacture equipment with the money and use the building and the people to manufacture widgets.

Strategy 2: Outsource the production of widgets and use the people and building to be widget distributor - or perhaps a widget store.

Strategy 3: Sell the patent to a larger firm, sell the building, fire the employees and retire!


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Implications of information management in organisations

It has the potential to contribute to the achievements of organisations

It has different purposes in different organisations. These purposes will be influenced by the organisation's goals as well as by its culture and its stance on information.

It is practiced in a political, social and cultural context which shapes both what information management does and how it does it.


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Developing IS/IT strategy

Once key strategic issues have been

identified, they feed into business

objectives, particularly marketing

objectives.

SWOT analysis can be used in

conjunction with other tools for audit

and analysis, such as PEST analysis and

Porter's Five-Forces analysis.


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SWOT Analysis

SWOT analysis is an important tool for

auditing the overall strategic position of

a business and its environment.

SWOT is an abbreviation for Strengths,

Weaknesses, Opportunities and Threats


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Strengths and weaknesses are Internal factors:

For example, a strength could be your specialist marketing expertise. A weakness could be the lack of a new product.

Opportunities and threats are external factors.

For example, an opportunity could be a developing distribution channel such as the Internet, or changing consumer lifestyles that potentially increase demand for a company's products. A threat could be a new competitor in an important existing market or a technological change that makes existing products potentially obsolete

SWOT Analysis (Cont…)


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SWOT Analysis (cont…)

Strength

your specialist marketing expertise.

a new, innovative product or service

location of your business

quality processes and procedures

any other aspect of your business that adds

value to your product or service.


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Weakness could be:

lack of marketing expertise

undifferentiated products and service (i.e. in

relation to your competitors)

location of your business

poor quality goods or services

damaged reputation


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Opportunity could be:

a developing market such as the Internet.

mergers, joint ventures or strategic alliances

moving into new market segments that offer

improved profits

a new international market

a market vacated by an ineffective competitor


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Threat could be:

a new competitor in your home market

price wars with competitors

a competitor has a new, innovative product or

service

competitors have superior access to channels

of distribution

taxation is introduced on your product or

service


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Critical Success Factors (CSF)

A small number of easily identifiable operational goals

Shaped by industry, manager, environment

Believed to assure firm’s success

Used to determine organization’s information requirements


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CSF example

Example Goals CSF

Profit concern Earnings per share

Return on investment

Market share

New product

Automotive industry:

styling

quality dealer system

cost control

Energy standards

Not for profit Excellent health care Regional integration

Improved monitoring of regulations

Efficient use of resources


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Process of Decision Making

Strategic Decision Making: Determines long-term objectives, resources, and policies

Management Control: Monitors effective or efficient usage of resources and performance of operational units


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Process of Decision Making (cont…)

Operational control: Determines how to perform specific tasks set by strategic and middle-management decision makers

Knowledge-level decision making: Evaluates new ideas for products, services, ways to communicate new knowledge, ways to distribute information


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Decisions

Types of management decision:

Structured: Repetitive, routine, procedure have been agreed

to deal with them.

Unstructured: Judgement, insight and evaluation is necessary to

deal with them.

They are usually important decisions that affect the future of the organisation, there are no set procedures.


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Structured or Unstructured

In which town will the new branch be located?

How many extra staff do we hire for the Christmas period?

What can be done about an employee who has had too many sick days off after being warned about their attendance.

Should the stores adopt their own store card?


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Information requirement

Strategic information

Tactical information

Operational information


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Information requirement (cont…) Strategic information: Strategic information is

concerned with the whole organisation and is relevant to the long term operational success.

It is derived from both internal and external sources and is summarised at a high level.

Tactical information: Tactical information is concerned

with activities or departments and is relevant to the short and medium term.

It is primarily generated internally (but may have a limited external component)...Tactical information data is based upon quantitative measures and is prepared routinely and regularly.

Operational information: Operational information is

concerned with specific tasks and is relevant to the immediate term.

It is derived from internal sources and is largely quantitative, detailed since it involves the processing of raw data) and is prepared very frequently.


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Strategic level Information

Strategic information is used to plan the objectives of the organisation, and to assess whether the objectives are being met in practice.

Strategic information systems is to help organisations to do things better, to win. (Strategic Information Systems, M Neumann, 1996).

An information system to be strategic it is to aligned with business goals as this has an impact on organisational performance.


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Strategic level information (cont…)

Strategic information systems

computer systems at any level of an organisation that change the goals, processes, products, services, or environmental relationships to help the organisation gain a competitive advantage

Information considered as a resource, much like capital and labor

IT-critical competitive strategies: Customer lock-in, customer lock-out, new business entry


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What do managers need to know about organisations in order to build and use information systems successfully?

What impact do information systems have on organisations?

How do information systems support the activities of managers in organisations?

How can businesses use information systems for competitive advantage?

Why is it so difficult to build successful information systems, including systems that promote competitive advantage?


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Strategy of an organisation is the roadmap towards attainment of its long term goals and objectives.

Effective operationalisation of strategy enables effective and efficient realization of organisational goals.

In the dynamic business environment of today, information has emerged as one of the key drivers in successfully steering the organisational strategy.


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Operational-level information

Support operational managers by keeping track of the elementary activities and transactions of the organisation.

The principle purpose of systems at this level is to answer routine questions and track the flow of transactions through the organisation.

Covers things such as sales, receipts, cash deposits, payroll, credit decisions, flow of materials.


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Knowledge-level information

Support knowledge and data workers in an organisation. The purpose of these systems is to help the organisation discover, organise and integrate new and existing knowledge into the business, and to help control the flow of paperwork. These systems, specially in the form of collaboration tools, workstations, and office systems, are the fastest growing applications in business today.


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Reference

BPP, Information Systems, Study Text, Paper 2.1, BPP Professional Education, United Kingdom.

Lachlan M. MacKinnon, Information: Types of Information System Systems, http://www.macs.hw.ac.uk/~lachlan/dbislectures/lectures/types.ppt,

http://www.macs.hw.ac.uk/~lachlan/dbislectures/lectures/types.ppt

http://www.macs.hw.ac.uk/~lachlan/dbislectures/lectures/types.ppt