CHAPTER 2

1. CHAPTER 2 INFORMATION TECHNOLOGY SYSTEMS Supporting Information Processing

2. Case Study • Levis Strauss Is Losing Its Pants to Vanity Fair • Market-response system • Transfer the information from retailer to VF • Process the sales information • Guess the best selling styles and lines • Interorganizational system • Transaction processing system • Decision support system

3. 2-2 Introduction Information Technology Is Now a Part of Almost Every Organization • Some IT systems simply process transactions • Some help managers make decisions • Some support the interorganizational flow of information • Some support team work

4. 2-3 Introduction YOUR FOCUS IN THIS CHAPTER • Organizations and Their Structures • The Nature of Information in an Organization (and Decentralized Computing) • IT systems in an Organization and the Tasks They Perform • Who is X_treme Rocky Accessories?

5. 2-4 An Organization THE TRADITIONAL STRUCTURE OF AN ORGANIZATION STRATEGIC MANAGEMENT TACTICAL OPERATIONAL NONMANAGEMENT

6. 2-5 An Organization THE TRADITIONAL STRUCTURE OF AN ORGANIZATION 1.STRATEGIC MGMT - provides an organization with overall direction and guidance. 2.TACTICAL MGMT - develops the goals and strategies outlined by strategic mgmt. 3.OPERATIONAL MGMT - manages and directs the day-to-day operations. 4.NONMANAGEMENT - those people who actually perform daily activities.

7. 2-6 An Organization Organizations Also Have Depth... Within the pyramid, many organizations structure according to: (1) Function (e.g,XRA,marketing, accounting, etc.) (2) Product line (e.g., GM by Buick, Pontiac, etc)

8. 2-7 Information When Considering Information, You Need to Understand... • The concept of shared information through decentralized computing • The directional flow of information • What information specifically describes • The information-processing tasks your organization undertakes

9. 2-8 Information SHARED INFORMATION AND DECENTRALIZED COMPUTING • As late as the early 1980s, most organizations exhibited centralized computing and isolated information. That is... • Large central mainframe computers that • performed all tasks. • Separate files of information for each • application or system. • So, computing power was centralized while • information remained isolated.

10. 2-9 Information SHARED INFORMATION AND DECENTRALIZED COMPUTING • During the early to mid 1980s, most organizations exhibited decentralized computing and isolated information. That is... • Smaller, more powerful computers that were • distributed to functional business areas. • These computers still maintained separate files • of information for each application. • So, computing power was decentralized while • information remained isolated.

11. 2-10 Information SHARED INFORMATION AND DECENTRALIZED COMPUTING • Today, organizations have maintained their decentralized computing while bringing together all the organization抯 information. • This bringing together of information is • accomplished by using databases. • Databases support the concept of shared • information. • So, computing power is now decentralized and • information is shared. (XRA)

12. 2-11 Information HOW INFORMATION FLOWS • Upward Flow of Information - describes the current state of the organization based on its daily transactions. • Downward Flow of Information - consists of the strategies, goals, and directives that originate at one level and are passed to lower levels. • Horizontal Flow of Information - between functional business units and work teams. See Figure 2.5 on page 44

13. 2-12 Information WHAT INFORMATION DESCRIBES • INTERNAL INFORMATION - describes specific operational aspects of the organization. • EXTERNAL INFORMATION - describes the environment surrounding the organization. • OBJECTIVE INFORMATION - quantifiably describes something that is known. • SUBJECTIVE INFORMATION - attempts to describe something that is currently unknown.

14. 2-13 Information INFORMATION-PROCESSING TASKS 1.Capturing information - at its point of origin. 2.Conveying information - in its most useful form. 3.Creating information - to obtain new information. 4.Cradling information - for use at a later time. 5.Communicating information - to other people or another location.

15. 2-14 Information TWO WAYS OF CREATING INFORMATION 1.TRANSACTION PROCESSING - the processing of transactions that occur within an organization. • Example: computing payroll and sales tax 2.ANALYTICAL PROCESSING - creating information to support your decision-making tasks. • Example: how to allocate investment dollars

16. 2-15 IT Systems THE SEVEN IT SYSTEMS IN AN ORGANIZATION 1.Transaction Processing Systems (TPS) 2.Customer Integrated Systems (CIS) 3.Management Information Systems (MIS) 4.Workgroup Support Systems (WSS) 5.Decision Support Systems (DSS) & Artificial Intelligence (AI) 6.Executive Information Systems (EIS) 7.Interorganizational Systems (IOS)

17. 2-16 TPSs TRANSACTION PROCESSING SYSTEM (TPS)... • a system that processes transactions that occur within an organization. • Capturing information • Creating information • Cradling information • Conveying information (secondary)

18. 2-17 TPSs TPS CHARACTERISTICS • Are at the very heart of every organization. • Provide the primary interface to customers. • Found in all functions of an organization. • If they fail, the whole organization suffers.

19. 2-18 CISs CUSTOMER INTEGRATED SYSTEM (CIS)... • an extension of a TPS that places technology in the hands of an organization抯 customers and allows them to process their own transactions. • Capturing information • Creating information • Cradling information • Communicating information • Conveying information (secondary)

20. 2-19 CISs CIS CHARACTERISTICS • Are at the very heart of every organization. • Are the new primary interface to customers. • Represent a further decentralization of computing power by placing that power in the hands of customers. • Will forever change the relationship between organization and customer.

21. 2-20 MISs MANAGEMENT INFORMATION SYSTEM (MIS)... • a system that provides periodic and predetermined reports that summarize information within a database. • Creating information • Conveying information

22. 2-21 MISs MIS CHARACTERISTICS • Alert people to the existence of problems or opportunities. • Report Types: • PERIODIC - produced at a predetermined time interval. • SUMMARIZED - aggregate information in some way. • EXCEPTION - show only a subset of available information. • COMPARATIVE - show two or more sets of similar information.

23. 2-22 WSSs WORKGROUP SUPPORT SYSTEM (WSS)... • a system that is designed specifically to improve the performance of teams by supporting the sharing and flow of information. • Communicating information

24. 2-23 WSSs WSS CHARACTERISTICS • Supports the sharing, dissemination, and flow of information. • Supports both: • Project teams - that solve a specific problem or take advantage of a specific opportunity and then disband to move on to other projects. • Permanent teams - people from all departments that perform a flow of work consistently. • Contains groupware.

25. 2-24 WSSs GROUPWARE the popular term for the software that supports the collaborative efforts of a team. Groupware Supports Three Functions: (See Figure 2.11 page 56) 1. Team Dynamics 2. Document Management 3. Applications Development

26. 2-25 WSSs GROUPWARE SUPPORT FOR TEAM DYNAMICS • ELECTRONIC MESSAGING - the software component that helps team members communicate. • ELECTRONIC MEETING SUPPORT - the component that helps you schedule meetings and carry out those meetings.

27. 2-26 WSSs ELECTRONIC MEETING SUPPORT SOFTWARE • GROUP SCHEDULING - maintains day-to-day electronic calendars of team members and schedules optimal meeting times. • ELECTRONIC MEETING- lets a team have a 搗irtual?meeting through IT. • VIDEOCONFERENCING - allows a team to have a 揻ace-to-face?meeting when members are geographically dispersed. • WHITEBOARD - lets team members meet and interactively edit and share documents.

28. JoinNet-Groupware

29. 2-27 WSSs GROUPWARE SUPPORT FOR DOCUMENT MANAGEMENT • GROUP DOCUMENT DATABASE - a powerful storage facility for organizing and managing all documents related to specific teams. • Contains documents from many teams • Supports many levels of security • Can store information in a variety of forms

30. 2-28 WSSs GROUPWARE SUPPORT FOR APPLICATIONS DEVELOPMENT • APPLICATIONS DEVELOPMENT FACILITIES - a wealth of basic building blocks that you can use to create applications quickly, so teams can literally “get to work”. • Prewritten - commonly performed functions • Programming tools - for creating unique applications • WORK FLOW AUTOMATION SOFTWARE - designed to automate the flow of business documents in a specific work process or procedure.

31. 2-29 DSS & AI DECISION SUPPORT SYSTEM (DSS) & ARTIFICIAL INTELLIGENCE (AI) • DSS - a highly flexible and interactive IT system that is designed to support decision making when the problem is not structured. • AI - the science of making machines imitate human thinking and behavior. • Creating information • Conveying information (secondary)

32. Seasons Forcast Model

33. Break Even Point Model

34. EOQ Model

35. 2-30 DSS & AI DSSs AND AI INCLUDE... • GEOGRAPHIC INFORMATION SYSTEM (GIS) - a DSS designed specifically to work with spatial information. • GENETIC ALGORITHM - an AI system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem. • EXPERT SYSTEM - an AI system that applies reasoning capabilities to reach a conclusion. • XRA Production Scheduling Expert System

36. 2-31 EISs EXECUTIVE INFORMATION SYSTEM (EIS)... • a highly interactive MIS combined with decision support systems and artificial intelligence for helping managers identify and address problems and opportunities. • Creating information • Conveying information

37. 2-32 EISs EIS CHARACTERISTICS • Make use of a data warehouse. • Support drill down capabilities. • Help identify information responsibility. • Use DSS and AI tools. • Provide access to a variety of information.

38. 2-33 EISs HAVE EISs BEEN MISNAMED? • EISs provide managers and executives with the flexibility to view information from many angles and provide various tools for supporting data analysis. • Aren抰 there other people in an organization who need those same capabilities? • Certainly - all employees need that type of support. • Maybe EISs should be named employee information systems.

39. 2-34 IOSs INTERORGANIZATIONAL SYSTEM (IOS)... • automates the flow of information between organizations to support the planning, design, development, production, and delivery of products and services. • Communicating information

40. 2-35 IOSs IOS CHARACTERISTICS • Supports ELECTRONIC DATA INTERCHANGE (EDI) - the direct computer-to-computer transfer of transaction information contained in standard business documents. • Allows many organizations to create an economies of scale in technology. • Provides a way for organizations to team up and create new products and services.

41. 2-36 TO SUMMARIZE • Organizations: • Consist of various levels of management and nonmanagement employees • Have depth • Shared Information Through Decentralized Computing • All an organization抯 information is made available to anyone who needs it (shared information). • Computing power is spread throughout the organization (decentralized computing).

42. 2-37 TO SUMMARIZE • Information in an organization flows upward, downward, and horizontally. • Information can be internal, external, objective, subjective, or some combination of the four. • Information-processing tasks include capturing, conveying, creating, cradling, and communicating. • Transaction processing and analytical processing are both ways to create information.

43. 2-38 TO SUMMARIZE CAPTURE CONVEY CREATE CRADLE COMMU- NICATE TPS XXXXXX CIS XXXXXXXX MIS XXXX WSS XX DSS&AI XX EIS XXXX IOS XX

44. Home Work • Paper • Introduce your company, find the different types IT systems used in your company. • If there is not any IT system in your company, What types of system you think your company should adopt? • Printed, 500-1500 words in English. • due date 15th Apr.