Chapter 2 An Introduction to Concepts of Systems and Organizations

1. Chapter 2An Introduction to Concepts of Systems and Organizations

2. Systems Concepts • System • System Boundaries • Systems and Subsystems • Outputs and Inputs • Subsystem Interfaces and Interface Problems

3. System • A system is an integrated set of components (tangible / intangible) to achieve a particular goal.

4. System Boundaries • Boundaries depict the scope of activities for a system. • Boundaries delineate areas of responsibility. • You must define the boundaries for business systems.

5. Subsystems • Systems often consist of numerous subsystems. • Each subsystem has elements, interactions with other subsystems, and objectives. • Subsystems perform specialized tasks for the overall system. • In business, functions such as marketing, finance, and manufacturing are subsystems.

6. Outputs and Inputs • Systems produce Outputs from Inputs -- that is the Inputs are converted to Outputs. • Outputs of one subsystem become inputs to another subsystem. • Outputs must adhere to standards to be useful or acceptable to the next subsystem.

7. Subsystem Interface and Interface Problems • An Interface connects each system or subsystem at its boundaries. • It serves to convey the output of one system to the input of another system. • Review the example in your textbook where the Inventory subsystem produces inputs to the Purchasing subsystem.

8. Systems and Their Environments • Open and Closed Systems - Open systems receive feedback from outside its environment. • System Feedback - indicates if the system performance is meeting standards. • System Stress and Change - as systems change over time they become stressed as new problems arise – for example untrained new workers in a system within a firm.

9. An Information System as a System • Subsystems • Outputs and Inputs • Hierarchy of Subsystems • System Feedback • Subsystem Interfaces • Internal Controls

10. The Structure of an Enterprise • An enterprise is organized into subsystems. An example is shown in Figure 2-9. • Note the three major systems and their subsystems in this microcomputer dealership. • Think about how information is used by the dealership owner/managers to monitor and control business activities.

11. Organizational Structure Owner

12. Using the Systems Approach in Problem-Solving • Define the Problem • Gather Data Describing the Problem • Identify Alternative Solutions • Evaluate These Alternatives • Select and Implement the Best Alternative • Follow Up to Determine if the Solution is Working

13. Define the Problem • This critical step requires you to differentiate between the “problem” and “symptoms” of the problem. • You must gather data describing the problem. • Example problem: Sales are low - low sales is usually a symptom of some other problem such as poor advertising.

14. Gather Data Describing the Problem • Study the following in order to gather data: • Environment, current standards (as compared to outputs produced), management skills, input resources, and internal procedures. • Understand the environment first - customers, competitors, local community. • Brainstorm about a low sales problem - what are the data to be gathered?

15. Identify Alternative Solutions • Alternatives may be based on different strategies for solving a problem. Example business strategies include: • low-cost strategy • Cost cutting strategy • value-added strategy • Do not rule out alternatives at this point - those that seem infeasible may be feasible with additional resources.

16. Evaluate Alternatives • Evaluate alternatives from a quantitative perspective. • Evaluate alternatives from a qualitative perspective. • Link the alternatives to the firm’s objectives and strategic direction where appropriate.

17. Select and Implement the Best Alternative • Often requires an implementation plan. • May require new personnel or equipment resources. • May require new information systems support.

18. Follow Up • Follow up to ensure that the solution is working. • Is the system meeting its goals? • Evaluate success/failure in terms of the systems model.

19. Using Information Systems for Feedback • Information systems can provide feedback to enable the firm to respond to customer needs. • Response to customers must often be on a real-time basis - information systems must provide the information needed to respond. • This is termed “Manage by Wire” • Discuss different examples