Week 8. Information Systems

What is an Information System (IS)?

A group of interrelated components that perform input, processing, output, storage, and control to convert data into information and support communication & information flows in an organization.

Which 5 components are in the framework of Information Systems?

1. Hardware

2. Software

3. Data

4. Procedures

5. People

What is Information Technology (IT)?

It’s the technology used in IS: The hardware, software, networks, database systems, methods, and data storage used within information systems.

Key difference between IS and IT?

IT = the technology

IS = technology plus people, processes, and organizational context. You can buy IT, but you cannot buy an IS. (E.g. “Public transport consists of vehicles and gas, uni out lecture halls and syllabi)

What is a database?

A collection of structured data organized in tables with relationships, metadata, and software to store, manipulate, and retrieve data.

The core of almost all applications.

What is data?

Collection of non-random symbols, numbers, words, images and sounds. They represent facts, recorded by observation/research. They are not organized to convey specific meaning.

What is information?

Textualized data. You relate data to other data. The data is then processed and meaningful to humans.

What is knowledge?

Information related to other information after processing this. Related to previous experience, judgments, previous learning.

Skills + experience + accumulated learning + judgement. These are needed for decisions and understanding/relating data/information.

Difference between data, information, and knowledge?

• Data: Raw facts without meaning.

• Information: Processed, contextualized data.

• Knowledge: Experience-based understanding used for decisions.

Name four main IS functions.

1. Operational processing: processing routine transactions, payroll, order entry

2. Monitoring: performance checking, OSIRIS (student trail system), forecasting

3. Decision support: value different alternatives, make decision

4. Communication: e-mail, groupware, workflow, supplychain

What are the most common used IS? And what do they mean?

• ERP: Enterprise Resource Planning system

• CRM: Customer Relationship Management System

• IOS: Inter-Organizational System, e.g., Supply Chain Management

• MIS & BI: Management Information Systems & Business Intelligence

• Office & Communication Systems

What is ERP?

An integrated IS with a central database that coordinates internal processes across departments and business units to improve efficiency (e.g. SAP, ISIS)

Common problems when companies use many disconnected systems?

Duplicate/inconsistent data, disjointed processes, limited information, isolated decisions → lower efficiency and higher costs.

Benefits of ERP systems?

Integration, standardization, uniform processes, information synchronicity, reliable performance indicators, and built-in best practices.

Disadvantages of ERP systems?

High failure rate, high cost of ownership, major organizational change, risk to culture, reduced innovation, and forced standardization.

What is CRM?

Systems supporting customer-facing processes to gather, analyze, and use customer data for sales, marketing, and service. (e.g. HubSpot, Microsoft Dynamics, SAP-CRM)

What are the two types of CRM?

1. Operational CRM – automation of sales/marketing/service (CC)

2. Analytical CRM – customer data analysis & BI, strategic: long-term customer insights (R&D, forecasting) (ecommerce)

How do IS influence organizations?

They change procedures, structures, formality, communication patterns, and even what the organization is.

How does organizational culture influence IS?

• Internal process cultures → prefer ERP, large integrated systems

• Rational goal cultures → CRM

• Human relations cultures → groupware/social media

• Open systems → external social media, decision support