Information systems (the best core ideas)

IS are the software and hardware systems that support data-intensive applications.
systems operate within systems.

IS is an integrated set of components for collecting, storing, processing, and communicating information. Business firms, other organizations, and individuals in contemporary society rely on information systems to manage their operations, compete in the marketplace, supply services, and augment personal lives. For instance, modern corporations rely on computerized information systems to process financial accounts and manage human resources; municipal governments rely on information systems to provide basic services to its citizens; and individuals use information systems to study, shop, bank, and invest. (http://www.britannica.com/EBchecked/topic/287895/information-system)

Information is the critical ingredient for the operation and management of any organization.

Information systems (IS) is a coordinated collection of information subsystems that are rationally integrated to collect, store, process, retrieve, disseminate, and communicate information for the support of operations, management, and decision-making functions in business and other organizations. The objective of IS is to enhance productivity by improving the efficiency and effectiveness of business processes. (further > http://www-afa.adm.ohio-state.edu/u-majors/pdf/infosys.pdf )

Information systems emphasizes the application of information technology in business and other organizations. Computers and other information technologies are the technical foundations or the tools of information systems. However, both technical skills and knowledge of business processes and practice are needed to be able to properly envision, design, implement, integrate, evaluate, and manage computer-based solutions to business problems.

The goal is to produce solutions that transform data into information and knowledge that is useful for individuals and organizations.

A business is an organization comprised of multiple workers, interdependent in the tasks they perform.

http://docs.globaltext.terry.uga.edu:8095/anonymous/webdav/Information%20Systems/Information%20Systems.pdf
business functions
Specialized tasks performed in a business organization, including manufacturing and production, sales and marketing, finance, accounting, and human resources.
The business model is simply a working description that includes the general details about the operations of a business. The components that are contained within a business model will address all functions of a business, including such factors as the expenses, revenues, operating strategies, corporate structure, and sales and marketing procedures.
image is taken from http://www.telco2.net/blog/2007/05/the_telco_20_methodology_busin.html

DSS (Decision Support Systems)

Gaining Competitive Advantage with Computerized Decision Support

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2007
by Dan Power

http://www.b-eye-network.com/view/6501

The implementation of a decision support system does not necessarily yield competitive advantage. This article covers the three criteria that must be met in order to use your DSS to such an advantage.

Many companies have isolated decision support capabilities that are hard to use or hard to access. For example, a data mart may have been built for accessing customer data, a project management system may exist for tracking large-scale projects, or Excel analyses may be routinely used in a specific business decision process. In general, managers are experiencing information overload and are having difficulty finding the right information when it is needed. Potentially, innovative decision support systems (DSSs) can yield competitive advantage for an organization or at least maintain an organization’s competitive position.

Evidence indicates managers can now use sophisticated data-driven and document-driven DSSs to obtain information that was buried for many years in filing cabinets or archived on computer storage systems. Model-driven DSSs can reduce waste in production operations and improve inventory management. Knowledge-driven DSSs can help managers evaluate employees or help technical staff diagnose problems. Communications-driven DSSs can support teams working all over the world. Inter-organizational DSSs can support a company’s suppliers and customers. Real-time decision support systems are now possible for tactical decision support.

A decision support system creates a competitive advantage if three criteria are met. First, once the DSS is implemented, it must be used and it must become a major or significant strength or capability of the organization. Second, the DSS must be unique and proprietary to the organization. Third, the advantage provided by the DSS must be sustainable until an adequate payback is received, usually at least three years. Managers who are searching for strategic investments in information technology need to keep these three criteria in mind. Just because a vendor says a product will create a competitive advantage doesn’t make the claim true. A competitive advantage means an organization does something important much better than its competitors.

The widespread use of computer technology has changed the way companies do business. Information technology has altered relationships between companies and their suppliers, customers and rivals. Porter and Millar (1985) discuss two specific ways that information technology can affect competition: by altering industry structures and by supporting cost and/or differentiation strategies. A common approach used to identify opportunities to change the structure and profitability of an industry is to examine five competitive forces. Michael Porter (1979) argued that the power of buyers, the power of suppliers, the threat of new entrants, the threat of substitute products and the rivalry among existing competitors determines the profitability of an industry. How a company uses information technology can affect each of the five competitive forces and can create the need and opportunity for change. For example, information technology has altered the bargaining relationships between companies and their suppliers, channels and buyers. Today it is easy for information systems to cross company boundaries. These inter-organizational systems have become common and, in some instances, they have changed the boundaries of the participating industries. Decision support systems can reduce the power of buyers and suppliers. Decision support systems can erect new barriers that reduce the threat of entrants. Decision support systems can help differentiate products and services and reduce the threat from substitutes. Also, decision support systems can help managers reduce the cost of rivalry actions and, in some cases, reduce the need for competitive actions and reactions.

Decision support systems can potentially help a firm create a cost advantage. Decision support systems can provide many benefits including improving personal efficiency and reducing staff needs, expediting problem solving and increasing organizational control. Managers who want to create a cost advantage should search for situations where decision processes seem slow or tedious and where problems reoccur or solutions are delayed or unsatisfactory. In some cases, DSSs can reduce costs where decision makers have high turnover and training is slow and cumbersome, and in situations where activities, departments and projects are poorly controlled.

Also, DSSs can create a major cost advantage by increasing efficiency or eliminating value chain activities. For example, a bank or mortgage loan firm may reduce costs by using a new DSS to consolidate the number of steps and minimize the number of staff hours needed to approve loans. Technology breakthroughs can sometimes continue to lower process costs, and rivals who imitate an innovative DSS may nullify or remove any advantage.

Decision support systems can potentially create a differentiation advantage. Providing a DSS to customers can differentiate a product and possibly provide a new service. Differentiation increases profitability when the price premium charged is greater than any added costs associated with achieving the differentiation. Successful differentiation means a firm can charge a premium price, and/or sell more units, and/or increase buyer loyalty for service or repeat purchases. In some situations, competitors can rapidly imitate the differentiation, and then all competitors incur increased costs for implementing the DSS.

Finally, decision support systems can be used to help a company better focus on a specific customer segment and hence gain an advantage in meeting that segment’s needs. Management information systems and decision support systems can help track customers, and DSSs can make it easier to serve a specialized customer group with special services. Some customers won’t pay a premium for targeted service, and larger competitors also target specialized niches using their own DSSs.

It is important to recognize that some firms have no competitive advantage. Firms can achieve a competitive advantage by making strategic changes, and firms can lose a competitive advantage when competitors make strategic changes. Implementing computerized decision support does not necessarily create a competitive advantage. In fact, most decision support does not have such a broad enterprise-wide impact.

Decision support systems can be important and useful and very necessary, and yet not provide a competitive advantage. Many consulting firms and vendors focus on gaining competitive advantage from a data warehouse or a business intelligence system, and that can happen. Many DSS projects do not, however, deliver such results and the projects probably were not intended to create competitive advantage.

A now classic study (Kettinger et al –1994) identified a number of companies that had gained an advantage from information systems. Some of those systems were decision support systems, but most were transaction processing systems. The following DSS examples are from their paper: Air Products, a vehicle scheduling system; Cigna, a risk assessment system; IBM, a marketing management system; Owens-Corning, a materials selection system; and Procter & Gamble, a customer response system. Most companies wisely do not provide many details on their success with computerized decision support. Competitive responses and technology have had a negative impact on how some of the aforementioned systems are perceived today.

If a company is trying to develop a decision support system that provides a competitive advantage, managers and analysts should ask how the proposed DSS affects company costs, customer and supplier relations, and managerial effectiveness. Managers should also attempt to assess how the proposed strategic system will impact the structure of the industry and the behavior of competitors. Finally, companies must continuously improve their information and decision support technology to gain and maintain any competitive advantage.

Decision Support Systems and Intelligent Systems, 7e. by Turban and Aaronson. Power Point Presentation on each chapter.

This book Software Rules: How the Next Generation of Enterprise Applications Will Increase Strategic Effectiveness for reading ufff.

In Software Rules, Oracle senior executive Mark Barrenechea describes for business readers how, over the next few years, the total integration of software functions into \"E-business suites,\" will radically transform the business landscape. Download the book:
http://rapidshare.com/files/688024/0071385169.rar or
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Presentations in ppt on E-commerce and ERP

I found very nice presentations of University level on Electronic Commerce and Enterprise Resource Planning. Definitely recommended. GET THEM from pdfarticles.blogspot.com

Assignment on Information systems: difinition and Example

An information system (IS) is a computerized system that, collects, processes, stores, analyzes and, disseminates information for a specific propose. This process is defined as an information processing cycle (IPC). The information processing cycle consists of four operations: input, process, output, and storage. Raw data retrieved from the environment and delivered to the computer is called input. After the computer receives data from the input device, it will manipulate, refine, and process the data to produce useful information for users. This step is called processing.
After data has been refined and manipulated into useful information, it is displayed to the end users as output. Finally,the information needs to be stored for future uses. All four processes make up the information processing cycle. Input consists of raw facts (data),while information is a collection of facts organized or processed in such a way that it has additional value for further usage. The information that is organized and processed to convey understanding,experience, learning, and expertise forms knowledge, which has a high value. All enterprises which have been in operation for any period of time have a wealth of information. However, this information often remains under-utilised because it is compartmentalised, either in the form of an individual entrepreneur or in the functional departments of larger businesses. That is, information is usually categorised according to its nature so that there are, for example, financial, production, manpower, marketing, stockholding and logistical data. Often the entrepreneur, or various personnel working in the functional departments holding these pieces of data, do not see how it could help decision makers in other functional areas. Similarly, decision makers can fail to appreciate how information from other functional areas might help them and therefore do not request it. Information system can link all this subsystem into unique system where needed data, information or knowledge would be easily accessed.

As information itself has value, commerce often involves the exchange of information (and knowledge), rather than tangible goods. Information is valuable and useful because it can help decision makers. For example, investors are using information to make multimillion-dollar decisions, and financial institutions employ information to transfer millions of dollars. Retailers use information to control inventory and process orders. Information technologies are constantly changing our society, our ways of doing business, and our lives. To fully understand what an information system is and how it works, it is necessary to examine its components. A complete information system should contain the following components: hardware, software, database, trained personnel, network and procedures.

• Hardware: a set of devices such as a processor, monitor, keyboard, and printer that accept data and information, processes them, and displays them.
• Software: a set of computer programs that enable the hardware to process data.
• Database: an organized collection of related files, records, etc. that stores data and the
associations among them.
• Network: a connecting system that permits the sharing of resources among different computers.
• Procedure: the strategies, policies, methods, and rules for using the information system.
• People: the most important element in information systems: include those persons who work with the information system or use its output.

Let’s look at all components in a successful computer-based information system (CBIS) that was deployed in pharmaceutical giant GlaxoWellcome Inc. The successful application of CBIS requires an understanding of the business and its environment, as well as an understanding of the business problem to which the CBIS is to be applied. When GlaxoWellcome revealed that a combination of two of its drugs, Epivir and Retrovir, was effective in treating AIDS, doctors began writing prescription en masse almost overnight. Such a big demand could have resulted in lower inventories to pharmaceutical wholesalers and shortage. But thanks to GWis (GlaxoWellcome Information System) market analysts were able to track the size and sources of demand and generate reports within hours. The result: Wholesalers around the world never ran out of Epivar and Retrovir.
GWis is the data warehouse application with decision support system relational online analytical processing (ROLAP) technology. GWis works directly with data stored in a relational database management system, integrating internal data with data from external sources. The application was implemented in GlaxoWellcome’s marketing analysis department. So users can analyze sales, inventory, and prescription data for drugs on the fly, helping GW streamline its distribution process and cut operational costs. An additional IS benefit is that users can access information from various databases and computers. They no longer create local databases on their PCs that ultimately interfere with data integrity or require IT support.
Computer software falls into two broad classes: system software and application software. The principal system software is known as the operating system. It manages the hardware, files, and other system resources and provides a systematic and consistent means for controlling the computer, most commonly via a graphical user interface (GUI). GWis software was built with MicroStrategy Inc. included data warehouse with DSS tools and database management. As usual big companies own various software packages. GWis is indeed database oriented system. Typical examples of databases include customer records and product catalogues, for GWis these are drugs sold, inventory, prescription data and so on. People who are supposed to use this system are primarily market analysts, but it can be accessed by managers as well and data warehouse application for pharmacists or wholesalers.
The internal records that are of immediate value to marketing decisions are: orders received, stockholdings and sales invoices. These are but a few of the internal records that can be used by marketing managers, but even this small set of records is capable of generating a great deal of information. Below, is a list of some of the information that can be derived from sales invoices.

• Product type, size and pack type by territory
• Product type, size and pack type by type of account
• Product type, size and pack type by customer (wholesaler)
• Average value and/or volume of sale by territory
• Average value and/or volume of sale by type of account
• Average value and/or volume of sale by sales person or wholesaler

By comparing orders received with invoices an enterprise can establish the extent to which it is providing an acceptable level of customer service. In the same way, comparing stockholding records with orders received helps an enterprise ascertain whether its stocks are in line with current demand patterns.

System can also include knowledge based tools: guidelines for prescriptions of certain drugs, previous marketing research and expertise. GWis transmits information through telecommunication network such as Internet. Various computer network configurations are possible, depending on the needs of an organization. Organizational IS are becoming more complex and advanced over time and its procedures, regarding use of IS, do the same. Whereas marketing research is focused, market intelligence is not.
A marketing intelligence system is a set of procedures and data sources used by marketing managers to sift information from the environment that they can use in their decision making. This scanning of the economic and business environment can be undertaken in a variety of ways that can cause a new ethic policy or policy for protection of sensitive information. GW has set a strategy for the IT organization design and management the disparate date sources.

Glossary of terms for business Information Systems
IS concepts and management a nice PDF chapter from Wiley's book