Ch2 Information technology and systems

Study guideTypes of information technology and information systemsAttributes of good quality informationHow type of information and purposes differ at different levels of an organisationSources of internal and external informationFeatures of information systems* Choose suitable systems to meet a specific business information requirement.

1 Information systemsInformation is processed data that is meaningful to the its user.Organisation require different types of information system to provide different levels of information in different functional areas.Information is needed for the purpose of :Planning Controlling Recording transactionsPerformance measurementDecision-making

Qualities of good informationACCURATE:Accurate: correct, assumptions statedComplete: includes everything neededCost-beneficial User-targeted: needs of user consideredRelevant: to the decisionAuthoritative: from a reliable sourceTimely: available when neededEasy to use: clearly presented, not excessively long, sent in appropriate way

Information in the organisationOrganisation require different types of information system to provide different levels of information in different functional areas.

Functional areaoperational

Information systemsStrategic information systemHelp senior managers in long-term planning and strategic decision-making Tactical information systemHelp middle managers in monitoring and controllingKnowledge information systemHelp knowledge and data workers to perform tasks and org. to integrate new knowledgeOperational information systemHelp operational managers in tracking the day-to-day operational activities.

Information systems

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Time horizon Level of detailsourceDegree of certaintyfrequencystrategiclong-termsummarisedmainly externaluncertaininfrequenttacticaloperationalimmediatehighly detailedinternal certainfrequent

Types of information used at each levelStrategicExpected gov. policy; overall/divisional profitability; competitor analysis; future market prospects; cost of capital; total cash needs; capital equipment requirementTacticalProductivity measurement; budgetary control report; variance analysis; stock turnover; labor turnoverOperationalEmployee hours worked; raw material input to a production process; hours spent on each job; stock level

*+p101 1.3.1 finance subsystem

Types of information systemExecutive support systems(ESS)Management information systems(MIS)Decision-support systems(DSS)Expert systems(ES)Knowledge work systems(KWS)Office automation systems(OAS)Transaction processing systems(TPS)Strategic leveltactical levelknowledge leveloperational level

Types of information systemExecutive support system (ESS)Pools data from internal and external sourcesProvides information to senior managersIn an easy-to-use formFeatures of ESS (EIS)FlexibilityQuick response timeSophisticated data analysis and modeling tools*a system for total business modelling, monitors internal and external envioronment.

MIS & DSSManagement information system(MIS)Mainly internal informationEnable managers to report on existing operations and make timely and effective decisions for planning and controlling Support structured decisionsLittle analytical capabilityRelatively inflexibleDecision support system (DSS)Enable managers to solve highly uncertain problemsSupport unstructured or semi-structured problemsMore analytical power (basic statistics, models and tools)Flexible and user-friendly

Expert system and KWSExpert system (ES)Computer program that captures human expertise, allows users to benefit form expert knowledge and may provide information to any management level E.g. process loan application; legal advice; forecast of economic developments or of the market and customer behaviour Knowledge work system (KWS)Facilitate the creation and integration of new knowledge into an organisation.E.g. CAD/CAM

OAS & TPSOffice automation system (OAS)Support the major activities performed in a typical office E.g. word processing, E-mailTransaction processing system (TPS)Performs and records routine transactionsUsed mainly by operational managementE.g. purchase ledger, sales ledger, payroll systemBatch processing: at regular time interval; suitable for internal, regular taskOn-line processing: process immediately

System dependencies and integrationThe ease of which data flows from one system to another depends on the extent of integration between systems.

Intranet, extranet and internetOrganisations are increasingly using intranet and extranet to disseminate informationIntranetExtranetInternet can be used in :Dissemination of informationProduct/service developmentTransaction processingRelationship enhancementRecruitment entertainment

2 Sources of informationInternal informationAccounting recordsOther internal sourcesPayroll system; production department; staffExternal informationFormal informationGathered by tax specialists; legal experts; company secretary; R&D department; marketingInformal informationFrom newspapers, TV, trade press

Environment scanningProcess of gathering external information:GovernmentInformation bureauxConsultantsNewspapers and magazinesReference worksLibrariesEach others systemsElectronic sources

Data collection methodsDocument reading methodsMagnetic ink character recognitionOptical mark readingScanners and optical character recognitionBar coding and electronic point of saleElectronic funds transfer at the point of saleMagnetic stripe cardsSmart cardsTouch screensVoice recognition

3 database systemsDatabase is a collection of structured data which can be used by a wide variety of usersDatabase management system (DBMS) is the software that builds, manages and provides access to a database.Features of a databaseShould be sharedShould meet needs of different usersShould be able to evolve to meet future needs* Database system is any system that utilises a central pool of data.

Use of databaseCreate database structureEnter and maintain dataCompatibilityEasy accessSupport existing reportingsecureRetrieval and manipulate dataSpecify the required parametersSorted Calculations Produce reports: ease of reporting

Adv. and disadv. of database systemAdvantagesAvoid unnecessary duplication of dataServe the organisation as a wholeEncourage management to analyze dataConsistencyGreater flexibilityEasier to develop new application programsDisadvantagesData security and data privacyOnly one set of data System failure will be widespreadHigh initial development costsTraining required

4 Information systems securityProtection of data from unauthorised modification, disclosure or destructionProtection of information systems from degradation or failureEnsure information is entered, kept and processed reliably and accurately.Measures to protect information and IS:Security controlsIntegrity controlsContingency controls

P101 1.3.1P104 table(1.10)P105 table(1.12) P 107 question P114 quiz #5

Question bank: p561 #5,6Pilot paper: p38 #21