The Impact of Information Technology

  1. The future of IT
    • IT is responsible for ½ of all productivity growth and 1/3 of all economic growth between 1995 and 1999
  2. The Role of Systems Analysis and Design
    • Define – a step by step process for developing high-quality information systems
    • Information systems – combines information technology (processes, interfaces, and networks), people, data that interact to:
      • Support business requirements,
      • Support and improve day to day operations (called Data processing), and to
      • Support the problem solving and decision-making needs of managements (called Information services)
  3. Purpose of an information system – to collect, process, and exchange information
  4. Who Develops information systems? (5 categories)
    • IT Service Firms (consulting firms)
    • Package Software Providers (off the shelf)
    • Venders of Enterprise-wide solution software. (People-Soft)
    • Open Source
    • In house developer

Information Systems Components

  1. System
    • System – a set of related components that produces specific results.
    • Mission-critical system – a system vital to a company’s operations
    • Every system requires input data
  2. Hardware
    • Consists of everything in the physical layer of the information system.
    • Can include servers, workstations, networks, telecommunications and equipment, fiber-optic cables, handheld computers, scanners, digital capture devices, etc.
  3. Software
    • Defined – the programs that control the hardware and produce desired results
    • Consists of:
      • System software
      • Application software
    • Program applications – programs to support day to day functions
    • Enterprise applications – companywide systems such as order processing, payroll
    • Legacy systems – older systems that must be supported * Can include horizontal and vertical systems
    • Horizontal – inventory or payroll that can be adapted to be used in many different types of companies
    • Vertical – designed to meet industry or business objectives such as medical or video chains.
  4. Data
    • Data consists of facts and is the system’s raw material
    • Information – is data that has been transferred into output valuable to users. (It has meaning)
    • Data is sometimes stored in tables
  5. Processes
    • Are the tasks and business functions that users, managers, IT staff perform to achieve specific results?
    • Are the building blocks of an information system?

How Business Uses Information Systems

  1. Enterprise Computing Systems
    • Define – information systems that support company-wide operations and data management requirements (production, sales, services, accounting)
    • Provides all levels of mgt information to support the decision-making process and primarily unstructured decisions.
      • Structured decisions – will follow a predictable set of rules (i.e., credit checks on customers)
      • Unstructured decisions – no precedent set of rules; unpredictable
    • Assumes that the information needed to make a decision about a unique circumstance already exists within the organization. * Main Objective – to integrate a company’s primary functions to improve efficiency, reduce costs and help managers make key decisions * Disadvantage – ERP systems generally impose an overall structure that might or might not match the way a company operates.
  2. Transaction Processing systems
    • Define – are applications that capture and process data about transactions (AKA – Data processing systems)
    • Processes data generated by day-to-day business operations
    • Transaction – a business event that bring new data into the business system. (orders, reservations)
      • Represents 90% of all data that must be captured; therefore, it is a major function.
      • Can be initiated from outside the organization
      • Types of transaction processing
    • Input – respond to business transactions
      • Most common form
      • Inputs new information into an IS
      • E.g., Airline reservations, payments, orders, timecards
    • Output – initiates transactions – internal and external
      • Confirms an action or triggers a response
      • E.g., airline reservation confirmation, customer invoices, sales receipts
    • Data Maintenance
      • Involves routine updates to stored data
      • E.g., change of address, discontinued products, inventory levels
    • Usually, performed by clerical workers
    • Usually, first to be replaced by automation
  3. Business Support System (MIS)
    • Management Reporting is needed to plan, monitor and control business operations
    • Provides job- related information to users at all levels of a company
    • Provides support for decisions
    • Management Information System
      • Define – is an IS that provides mgt-oriented reports in a fixed format that uses predefined: Captured and processed data; Management or statistical models
      • Is intended for management: supervisors, middle managers, executives.
    • Detailed Reports – information with little or no filtering
      • E.g., Listing of all customer accounts
      • Can be historical
      • Provides an audit trail
      • Assists mgt by generating schedules
      • Can be regulatory (required by government)
    • Summary Reports
      • Categorization of detailed information to show trends and or potential problems
      • Can be in the form of graphics
    • Exception Reports
      • Information is filtered according to some criteria – usually according to some pre-set standard – before it is used by management.
      • I.e., stock below a certain quantity
  4. Decision Support Systems
    • Assists with decisions (MIS is report focused)
    • Can perform “what if” scenarios.
    • Used by middle management and up
  5. Knowledge Management Systems (Expert Systems
    • A system encoded with “expert” human knowledge and experience to achieve expert levels of problem solving. Imitates the reasoning of an expert.
    • Simulates human reasoning by combining a knowledge base and inference rules that determine how the knowledge is applied
      • Knowledge base – consists of a large database that allows users to find information by entering keyword or questions in normal English phrases
      • Inference rules – used by the knowledge base; are logical rules that identify data patterns and relationships
    • Uses fuzzy logic to allow inferences to be drawn from imprecise relationships
    • Is an extension of the DSS (decision support)

Roles

  • The systems analyst role focuses on the IS issues surrounding the system.
  • The business analyst role focuses on the business issues surrounding the system.
  • The requirements analyst role focuses on eliciting the requirements from the stakeholders associated with the new system.
  • The infrastructure analyst role focuses on technical issues surrounding the ways the system will interact with the organization’s technical infrastructure (hardware, software, networks, and databases).
  • The Change Management analyst role focuses on the people and management issues surrounding the system installation.
  • The project manager role ensures that the project is completed on time and within budget and that the system delivers the expected value to the organization.

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