CSC491-lecture2 week 21 Technical Approach Three disciplines that contribute to the technical approach are 1.Computer science: concerned with establishing

CSC491-lecture2 week 2 1

Technical Approach

• Three disciplines that contribute to the technical approach are

1. Computer science: concerned with establishing theories of computability,methods of computation, and method of efficient data storage and access

2. Management science: emphasizes the development of models for decision-making and management practices

3. Operations research: focuses on mathematical techniques for optimizing selected parameters of organizations such as transportation,inventory control, and transaction costs


•

Computer Science operations Research

Management Science Sociology

Psychology Political Science

MIS


Behavioral Approach

• Growing part of the I.S. field is concerned with behavioral problems and issues

• Problems such as system utilization, implementation, and creative design, can not be expressed with the normative model used in the technical approach

1. Sociologists: focus on the impact of I.S. on groups, organizations, and society

2. Political scientist investigate the political impacts and uses of I.S.3. Psychologist: concerned with individual response to I.S. and

cognitive models of human reasoning• The behavioral approach concentrate on changes in attitudes,

management and organizational policy, and behavior


Sociotechnical Systems

• The study of management information systems (MIS) began in 1970s

• To focus on computer based information systems aimed at managers

• An MIS combines the theoretical work of computer science,management science,and operations research with a practical orientation toward building systems and applications

• Also concerned with issues raised by sociology, economics, and psychology

• Technology must be changed and designed in such a way so to fit organizational and individual needs


Widening scope of Information systems

• Interdependencies between business strategy, rules, and procedures


Most Common Types Used In Business

• Electronic Commerce Systems

• Transaction Processing Systems (TPS)

• Management Information System (MIS)

• Decision Support Systems (DSS)

• Artificial Intelligence System (AI)

• Expert Systems


E-Commerce

• Involves any business transaction executed electronically b/w parties.

• Wrong Conception: e-commerce reserved mainly for consumers visiting Web site for on-line shopping.

• Major volume is business-to-business transactions that make purchasing easier for corporations, No Sales TAX

• Advantages:any time shopping,ease,home delivery• Disadvantages:credit card info,cookies,sell your info


Transaction Process Systems

• Transaction: any business related exchange such as payments to employees,payments to suppliers,sales to customers

• Processing business transaction was the first application of computers for most organizations

• An organized collection of people,procedures,software,databases,and devices used to record completed business transactions


Transaction Process Systems

• One of the first business systems to be computerized was the payroll system.

• COBOL: COmmon Business Oriented

Language

Hours Worked

Pay Rate

Payroll transactionProcessing

Payrollchecks


TPS

• TPS represents the application of Information concepts and Technology

to routine ,repetitive,and ordinary business transactions

Without computers no transaction

What is critical?

Electricity! Constant and stable supply


Workflow Systems

• A workflow system is rule-based management software that directs,coordinates,and monitors execution of an interrelated set of tasks arranged to form a business process.

• Procter & Gamble implemented an expense reporting workflow application to enter,submit,process,and track expense reports


Enterprise Resource PlanningSystems ERP

• A set of integrated programs capable of managing a company’s vital business operations for an entire multisite ,global organization.

• Most ERP systems provide integrated software to support the manufacturing and finance business functions of an organization.

• A demand forecast is prepared that estimates customer demand for several weeks.

• ERP system checks what is available in finished product inventory to meet the demand.


Enterprise Resource PlanningSystems ERP

• Any shortcoming then needed to be manufactured.

• In developing the production schedule,the ERP system checks the raw material and packing material inventory and determines what needs to be ordered to meet the planned production schedule.

• Most ERP systems also have a purchasing subsystem that orders the items required.


Management Information Systems (MIS)

• An organized collection of people,procedures,software,databases,and devices used to provide routine information to managers and decision makers.

• The focus of an MIS is primarily on operational efficiency.

• Marketing,production,finance,and other functional areas are supported by MIS.


Decision Support Systems(DSS)

• An organized collection of people,procedures,software,databases,and devices used to support problem-specific decision making.

• A DSS supports and assists all aspects of problem-specific decision making.

• DSS can provide assistant in solving complex problems not supported by traditional MIS.

• Managers play an active role in development and implementation


MIS VS. DSS

• Helps organization

“do things right”• Complex problems not

supported• Provides standard reports

generated with data and information from TPS

• Helps managers

“do the right things”• Provide solution to

complex problems• DSS operates from a

managerial perspective


Artificial Intelligence

• A field in which the computer system takes on the characteristics of human intelligence.

Artificial Intelligence

Robotics vision systems natural lang Expert systems

processing


Expert Systems

• A system that gives computer the ability to make suggestions and act like an expert in a particular field

• To Monitor Nuclear reactors,perform medical diagnosis,design and configure information system components

• Knowledge base:collection of data,rules,procedures and relationships


Virtual Reality

• The user becomes fully immersed in an artificial,three-dimensional world completely generated by computer

• Examples: Head mounted display, data gloves


Information Systems In Organizations

• Technology’s impact on business is growing rapidly

• Technology has changed the nature of work and shape of organizations

• Early computer systems did not take overall goals of the organization

• Today,business recognize that both important organizational concepts and processes must be considered and supported by I.S.


Decision Making & Problem Solving

• Decision types and approaches vary widely from organization to organization

• Effective decision making helps an organization realize its goals

• A plan of action(Strategy) and the overall objectives of the organization set the stage for the decision making process


Decision Making As A Component Of Problem Solving

• Problem solving is the most critical Process a business organization undertakes

• Problem solving starts with decision making

• Three stages of decision making phase

• Intelligence , design ,choice


Intelligence

Design

Choice

Implementation

Monitoring


Intelligence Stage

• First stage in the decision making phase of he problem solving process is the intelligence stage

• Potential problems are defined and opportunities are identified

• Information is gathered that relates to the cause of the problem

• Possible solution constraints are investigated


Intelligence Stage

• Example:

• Intelligence phase= explore possibilities shipping tropical fruit from a farm in Hawaii to stores in Michigan

• Problem constraints =price,perish ability

State and Federal regulations regarding the shipment of food products


Design Stage

• Alternative solutions are developed

• Feasibility and implications of alternatives are evaluated

• Example: alternative methods of shipment,transportation times and cost


Choice Stage

• Requires selecting a course of action

• Example: method of shipment,by Air, might be selected

• Fruits will spoil if longer time is taken

• A number of factors influence choice

• Apparently easy act of choosing is not simple


Implementation Stage

• Problem solving goes beyond decision making

• It include the implementation stage ,when solution is put into effect

• Example:informing the staff ,getting the fruit to the airport,and actually shipping the fruit to Michigan


Monitoring Stage

• Final stage is the monitoring stage

• Decision makers evaluate the implementation of the solution

• To determine whether the expected results were achieved

• To modify the process in light of new information learned


Problem solving factors

A knowledge of these factors increases a manager’s ability to analyze and make decision

• Complexity• Decision objectives• Competition• International aspects• Social and political actions• Technology• Time compression


Complexity and decision Objectives

• Today More alternatives to consider than few years ago

Objectives

• Organizations want to do more than merely increase profit or reduce cost

• Example:maintain certain production level,,minimize worker accidents,minimize impact on the environment


Competition

• Increased competition from companies providing same type of services and products

• Due to new technology,improved transportation process

• Example: early 1980s,there were few personal computer manufacturers,today over 300 worldwide


International Aspects

• Businesses and markets have spread from local to national and international operations

• Most of the world is aware of international impact of major companies such as General Motors,Sony etc

• A furniture co. in Italy,might purchase furniture from an underdeveloped country in Africa,product assembled in Asia and sell them in Germany

• Difference in exchange rates,economic conditions


Social and political actions

• A city council might pass an ordinance requiring local companies to meet certain pollution standards

• Some firms might need to install new control equipment to meet the standard

• Others might need to reconsider their choice of manufacturing process


Technology

• Reductions in the cost of Information technology and advances in its capabilities have provided increased decision alternatives to business and organizations

• Example:ten to fifteen years ago,a manufacturer might have had only a few local suppliers

• Now,technology brings to manufacturer’s doorstep hundred of suppliers throughout the world that could provide parts or materials


Technology

• Information technology can assist in product design

• Computer assisted design (CAD) systems can result in superior products,reduced cost,time saving over Manual approaches

• CAD systems include sophisticated software ,can create two and three dimensional images


Farmers Insurance Group

• Like all large companies Farmers Insurance Group was having a huge amount of raw data.

• Data was spread across different computer systems in different locations.

• Profit or loss depends on Insurance policy at what rate?

• Competition has gotten more intense• Traditional ways of segmenting risk aren’t good

enough at providing you competitive advantage


• High-powered sports cars are more likely to be involved in expensive accidents than ordinary sedans

• Put them in a different risk category than sedans

• Actuary would test it using the computer

• One disadvantage of this old approach is that small,but profitable,market niches may be ignored or not priced correctly.


Farmers Decided take help from computer System

• Found the help through IBM,which developed a customized software product for Farmers called DecisionEdge

• The computer system was an advanced Decision Support System (DSS)

• It combined raw data from seven different databases on a staggering 35 million records

• Took twice as long as expected to covert raw data into useful information


• Additional wait was worth it.

• Farmers found new niches that it did not see before DSS.

• Example: DecisionEdge helped Farmers determine not all sports car owners are alike

• Older and had another car were less likely to be in an expensive accident


Information Systems In Organizations

• once this market niche was identified,Farmers could offer that segment of the sports car market lower premium

• Farmers Insurance Group was able to use DecisionEdge to help it find new market

niches(a situation specially suited to a person’s abilities)

resulted in millions of dollars of increased revenues


Focused Differentiation

• Competitive strategy for developing new market niches for specialized products or services where business can compete in the target area better than its competitors

• Example : foldable keyboard


Datamining

• Analysis of large pools of data to find patterns and rules that can be used to guide decision making and predict future behavior.

• Example: mining data about purchases at supermarkets might reveal that when potato chips are purchased,soda is also purchased 65% of the time.

• When there is a promotion,soda is purchased 85% of time people purchase potato chips.


Supply chain management

• Inventory is just dead weight on a firm• When goods or staff members are underutilized ,the

firm must pay financial costs without receiving any revenues.

• Therefore, many firms attempt to use IT to eliminate or greatly reduce inventory

• Example:By keeping prices low and shelves well stocked, Wal-Mart has become the leading retail business in US.


Assignment #1

• Do review questions 1 ,3,4,8,and 11

See next slide for Questions

• Due at the start of next class


1: distinguish between a computer,a computer program,and an information system.What is the difference b/w data and information?

3: what is information systems literacy?

4: what are the organization,management,and technology dimensions of information systems?

8:what is the relationship b/w an organization and its information systems? How is this relationship changing over time?

11: Describe some major changes that information systems are bringing to organizations?

Documents

CSC491-lecture2 week 21 Technical Approach Three disciplines that contribute to the technical approach are 1.Computer science: concerned with establishing