Module 9: Information Systems

An information system

•  collects, stores, and processes data to provide useful, accurate, and timely information to an organization.

  •  It consists of hardware, software, people, procedures and policies.

The benefits provided by an information system include:

•  Automating routine tasks (sending bills, placing orders)

•  Enabling employees to do their jobs quicker and more accurately

•  Solving problems

•  Helping make business decisions

 types of information systems: Transaction processing systems

• systems that enable businesses to perform routine transactions, such as order-entry, payroll, and accounting systems

 types of information systems:  Management information systems: 

• systems that provide managers and executives information they need to make business decisions.

• MIS tools include data mining programs, Excel and various database management system programs

types of information systems:  A decision support system

•  helps people make decisions by accessing data, manipulating data, generating statistical projections and creating data models of various scenarios

types of information systems:  ERP systems:

•  a large, integrated application that is used by all of a company’s departments (manufacturing, sales, marketing, distribution, customer service, etc.)

types of information systems: Ecommerce systems 

• refer to business transactions that are conducted electronically over a computer network. 

• There are three classifications of ecommerce:

  •  B2C (business to consumer)

  •  C2C (consumer to consumer)

  •  B2B (business to business)

types of information systems: A Supply chain management (SCM) system 

types of information systems:

• consists of all the processes and procedures involved in moving a product or service from the supplier to the customer. 

  • For a manufacturer it begins with purchasing the raw materials used to make a product and ends when the customer purchases the product.

types of information systems: A Customer relationship management (CRM) system

•  refers to the practices and technologies that companies use to analyze and improve interactions with customers. 

• The goal of CRM is to attract new customers and turn first-time customers into repeat shoppers

types of information systems: Electronic data interchange (EDI) systems: 

• systems that enable two different companies to exchange data electronically using a network

types of information systems:   Office systems: 

• HW and SW that increase productivity and enable communications (Word, Excel, PowerPoint)

 Design and Manufacturing Systems:  Computer-aided design (CAD): 

• an application used to design products electronically

 Design and Manufacturing Systems: Computer-aided manufacturing (CAM): 

• used to help manage manufacturing operations and control the machinery used in those processes.

 Design and Manufacturing Systems:Robotics: 

• devices controlled by a person or computer that can react to sensory input

 Design and Manufacturing Systems:System development 

• is the process of planning, building, and maintaining a system. 

There are two reasons why companies build new computer systems:

•  To fix a problem

•  An opportunity to gain a strategic advantage over their competitors

Organizations often outsource their

• system development projects

• the day-to-day functions of an information technology (IT) department.

Outsourcing

•  is when a company contracts with an outside vendor for all or part of its IT functions.

• Companies outsource when they feel an outsourcing vendor can do the job cheaper and/or better than they can or if the company is unable to hire someone with the required skillsets.

 Reasons for the increased use of outsourcing include: 

• high domestic wages/overhead, low international wages/overhead, faster technology, and flexible staffing options.

 Disadvantages of outsourcing 

• are potential conflict between employees and outsourcing personnel,

• time zone differences,

• cultural differences,

• language barriers, control

• and security, and less verbal communication.

 system development life cycle (SDLC).

The system development process involves a series of predefined steps (or stages)

•  Planning

•  Analysis

•  Design

•  Implementation

•  Maintenance

The traditional SDLC (also called waterfall) approach

• is a very structured, sequential process in which one phase follows another and, once a phase is completed, it is never revisited.

an agile or prototype method

• Another iterative SDLC approach

• provides the flexibility to quickly build a small subset of the system and then enhance it through a series of upgrades.

Planning Phase:

•  defines the problems with the current system (or define the business opportunity)

•  creates a short description of the project

•  estimates the costs and benefits of the project

•  creates a list of project team members

•  creates a schedule for the project using project management software and project management tools such as PERT, WBS and Gantt charts

Analysis Phase:

• gathers detailed information about the current system, analyzes the collected data, and identifies the requirements for the new system.

•  information about the current system is collected through interviews, questionnaires, organizational charts, and personal observation.

 system requirements

• are gathered primarily through interviews with management, the IT staff, and end users. 

• Factors that must be considered when developing system requirements include input, output, processing, storage, and security.

Design Phase:

•  determines what the new system must do--how it will meet the system requirements identified in the analysis phase

•  creates a list of criteria that will be used to compare alternative system solutions

•  identifies and evaluates potential hardware and software alternatives

•  decides whether to purchase software, create their own software or buy a turnkey system

•  new applications are designed (if applicable) using program flowcharts, pseudocode, structure charts, and/or data modeling.

•  a data dictionary is created for the new database

•  data flow diagrams, class diagrams, business process diagrams, input and output designs and other modeling tools are used to design the new system

•  a network model indicating the locations of networking devices is created.

Implementation Phase:

•  decides whether to buy contract out for HW and/or SW

•  new applications are purchased or created and tested

•  new HW and SW is installed using one of the following four system changeover methods: 

  • direct, parallel, phased, or pilot.

•  data files and databases from the old system are transferred to the new system

•  the entire new system is tested and problems corrected

•  system documentation (network models, user manuals, procedure handbooks) is completed

•  users are trained

Maintenance Phase:

•  makes backups of programs, files and databases

•  provides help to users either through an in-house or third-party company help desk

•  fixes new hardware and software problems

•  purchases new hardware and software to update or expand upon the system

•  modifies existing software to satisfy new user requests

•  optimizes the system for speed and security

traditional SDLC approach uses the five-step methodology

• It is time consuming and can be quite costly because considerable time and money is spent planning, analyzing and designing the system before the system is even built. 

• However, due to the amount of time spent covering every detail of the project, the SDLC approach is widely considered the best way to build an effective information system.

 the prototype

•  starts by designing and building a small model (prototype) of the new system. 

  • The model is presented to users for their review and feedback.

•  Based upon the users’ comments and suggestions, the prototype model is modified and/or developed further and brought back to the users for more review and feedback.

•  This process continues over and over until the users are satisfied with the prototype.

  •  At this point, the prototype either becomes the finished system or the prototype becomes the model that is used to finish building the system.

•  The prototype approach is often used when the users are unsure of the system requirements or when the system must be built quickly and there is not enough time for the lengthy SDLC approach.

•  The prototype approach is normally faster and less costly up front than the SDLC approach.

  • However, because less time is spent planning and designing the system, computer systems built using the prototype method are more likely to have problems—and may be more costly in the long run—than systems built using the SDLC method.

Every information system has potential risks that could cause the system to suffer a short- or long- term shutdown. 

• It is important for an organization to plan for risks and develop strategies to either prevent them from happening or minimize their impact on the organization. 

• Some of these risks are:

  •  Natural disasters

  •  Power outages

  •  Equipment failure

  • Human error

  •  Software failure

  •  Acts of war

  •  Security Vulnerabilities`

Two ways that organizations plan for these risks is

• building data centers

• having a disaster recovery plan.

 A Data center

• is a specialized facility designed to hold and protect a company's data.

 A disaster recovery plan

• is a step-by-step listing of the strategies that a company has in place to protect itself from disasters and the steps the company will follow to get back up and running quickly if a disaster occurs. 

A disaster recovery plan should include how the company will:

•  Check on the health status of each employee if a disaster occurs 

• Continue critical business operations

• Minimize the downtime if there is a serious disruption of operations

•  Establish management succession and emergency powers

•  Facilitate effective coordination of recovery tasks

•  Have backups of all programs and data

•  Recover critical data that has been lost

•  Arrange for a backup facility if the primary facility is no longer operational

•  Account for all the company's assets so they can be replaced

•  Arrange with local vendors to purchase large quantities of replacement hardware

•  Rebuild its network by using network diagram