Information Systems for

Managers
Dr. Deepa Ray
Session 1

What is an Information System?

Information
System

The IS of most Organizations!

PEOPLE

PROCESS

INFORMATION

Holistic view of Information Systems

A set of interrelate components that deal with
(collect, retrieve, process, store ,distribute)
information to support decision making and
control in organizations.
Information NOT Data

WHERE WE GO WRONG?

IT versus IS

Do they mean the same thing? Yes/No? Why?

Are we able to separate the two always?
Why is it important to do so?
The Blame Game

Technology vs People
TECHNOLOGY PASS

TECHNOLOGY FAIL

PEOPLE PASS

SUCCESS
Examples: Most examples
of successful applications
used everyday

FAIL:
NASDAQ shut down to due
to technical glitch

PEOPLE FAIL

FAIL
Examples: ERP at Lumber
Liquidators

FAIL
Example: Online apparel
selling losses?

http://in.reuters.com/article/2013/08/22/us-nasdaq-halt-tapec-idUSBRE97L0V420130822
http://www.pcworld.com/article/209886/article.html

IT does not matter: Nicholas Carr

IT/Technology is like any other commodity, say
power, water etc.
Essential for operations
No competitive advantage
True or not?
A huge debate on this article with multiple
experts giving their opinion.
Nicholas CarrIT does not matter

How do we view IS?

As a value adding process
Not just technology, but a system consisting of
the organization, the management (people)
situated in a context (environment)
A Socio-technical approach where technology
is just one component , social the other one!

Some commonly known systems

TPS
ERP
OAS
MIS
DSS
ESS
EIS
SCM
E-commerce systems

Can we keep track of all systems?

TPS: Transaction Processing System

OAS: Office Automation Systems
MIS: Management Information System
ESS: Executive Support System
DSS: Decision Support System
ESS: Expert Support Systems
ERP: Enterprise Resource Planning System
CRM: Customer Relationship Management
System

WHY STUDY IS: DOES IT EVEN

MATTER?

Role of IS in globalization: Implications

for Businesses?
What is your value chain?
Are you a global company?
How is technology impacting segments of
your value chain?
Do you know all the areas of impact and are
you prepared?
KWYDK is very important!!

What do we need.
Global perspective to strategy
IT organization responsible for strategizing and
delivering the IT service
Not be a part of operations only, strategic in
nature

How IS impacts the organization

Changing the value chain
Creating new markets
Integrating changing information
requirements
Structure vs People balance
Whole vs piecemeal decision making process

Session 2

STRATEGIC ROLE OF IS

What is strategy?
Plan of Action
Should be based on what?
Core Strengths (Distinctive Competencies)
Complementary assets (Supporting assets)

How to formulate strategy?

Porters 5 forces
Value Chain Model

Porters Five Forces

Constraints on
Extracting
Value

Uniqueness
Complementary
Assets

What is IS role in strategy?

Low-cost Leadership
Product Differentiation
Focus on Market niche
Customer/Supplier Loyalty

WHICH CAME FIRST? THE CHICKEN

OR THE EGG!

What follows first?

Does organizational strategy determine IT
strategy?
What about vice-versa?
What are the challenges in both scenarios?

Forget Strategy!!!
Interesting Article.
Not interested in aligning IT with business
strategyWhy?
So what to do?
Define operating model (Key words: Integration
and Standardization)
Align IT with it
Provides a more consistent way of looking at IT to
enable business strategy

What is Critical?
Two key words
Standardization: How standardized processes
should be across business units
Integration: How closely integrated are these
processes (more related to data sharing?)

Models
Diversification: Decentralized, pursue different
markets and cater to the local
economy/customers
Unification: Centralized, standardized processes
with shared data, single face to customer
Coordination: Integration without process
standardization, shared data for better service
Replication: Standardized process, Operating
units do not interact, not necessarily sharing
process critical data

Technology questions
Technology is ever changing
Is it even possible for you to ask the right
questions about technology to gain maximum
advantage?
IT savvy or noteveryone will benefit from
asking some questions
It will help determine both the direction as
well as focus of technology for strategic
advantage

ASKING THE RIGHT QUESTIONS AT

THE TOP!

Impact on competition
How will IT change the basis of competition in
our industry
Example: Banking industry and the online
payment revolution

Can we leverage technology to win against

competitors
Can we use technology to enter new markets

Impact on customer expectations

Educated and well informed customers
How is our customer experience as compared
to others
What is the future of customer expectations?
Are we prepared?

Impact on Business Model

Technology Impact on performance
improvements

Can we quantify threat/opportunity from IT

Can we plan to mitigate or take advantage of those
Time horizon in consideration while planning
Financial planning

Alignment of investment and opportunities

Technology investment versus business value gained
Balance in terms of short term/long term orientation

Impact on Business Model

Alignment of investment and opportunities
Technology investment versus business value
gained
Balance in terms of short term/long term
orientation

Impact on Agility
Impact on business ability
Comparison with competition
Is IT enabling agility or tying us down
Infrastructure on demand

How IS impacts the organization

Changing the value chain: reconstructing vs
remodeling
Creating new markets
Integrating changing information
requirements
Structure vs People balance
Standardization vs localization balance

Information Systems for

Management
Dr. Deepa Ray
Session 3

Imp questions to ask

Related to competition
Can we use this technology to win against our
competitors
Is it changing the industry we operate in
Can it help us enter new market

Related to customers
Is it changing customer expectations
Bringing more knowledge and power to customer
Can we use it to improve customer experience

Impact on Business model

How is technology changing
The way we do things
Is it making us slower/faster
Is it benefitting us as compared to the investments
made

Todays Agenda
Functional versus Integrated Information
Systems
The overall enterprise architecture and where
the systems fit
A brief review of SCM, CRM, ERP

Types of Information Systems

Multiple ways of classification
Level of Decisions
Level of Hierarchy

Depending on the level of integration

Functional
Integrated/Enterprise

Decisions Bottom to top: Pyramid

Hierarchy

4 Major Types of Systems

Transaction Processing Systems

Management Information Systems
Decision Support Systems
Executive Support Systems

Transaction Processing Systems

Operational-level systems at the bottom of
the pyramid
Examples are Payroll systems, Order
processing systems, Reservation systems
Used by operational personnel + supervisory
levels
Efficiency oriented

Management Information Systems

Management-level systems that are used by
middle managers to help ensure the smooth
running of the organization
Examples are Sales management systems,
Inventory control systems, Budgeting systems
Used mostly by middle managerial levels

Decision Support Systems

Facilitates the creation of knowledge and
allow its integration into the organization
Analytical Capabilities: Concerned with future
Examples are Financial Models, Logistic
Systems
Used by Senior Managers

Executive Information Systems

Strategic-level information systems that
identify long-term trends
Found at the top of the Pyramid, Used by
Senior Management
Dashboards often represent data from
disparate systems

FUNCTIONAL VS INTEGRATED

Functional Information Systems

Supports one functional area within a
company by increasing its internal
effectiveness and efficiency
Flow of work and information between
departments might suffer
Examples include Inventory Management,
Sales force automation, HRM systems

Marketing Systems
Marketing systems
Plan, promote, sell
Develop new products/markets
Attract, serve and retain customers

Sales Force Automation

Digital Marketing via tools such as blogs,
communities, social media platforms etc.

Manufacturing Systems
Support the production/operations function
Types of systems would be very different for a
manufacturing versus service company
Examples: Logistics Management, Materials
Management, Computer Integrated
Manufacturing

Human Resource Systems

Support the HR functions of
Planning personnel support
Employee development
Maintain personnel records
Performance appraisal

Employee self service in terms of managing

their leave, salary information, travel expense
etc.

Accounting Systems
Systems built to record and report business
transactions
May interface with multiple other functional
information systems
Examples include Sales TPS, purchase related
TPS, payroll TPS

Financial Management Systems

Built to support managers in decisions
regarding financing of business as well as the
allocation and control of financial resources
Examples include financial planning software,
present value analysis of expected cash via
spreadsheet models etc.

Integrated versus Functional IS

Integrated
Most general examples include ERP (Enterprise
Resource Planning Systems), SCM, CRM
Common Database with information
Instant and current info available

Functional
Specific to a particular function
Data in Silos

Enterprise-level View of Various

Systems

Enterprise Resource Planning

Internal Business Processes
Customer Relationship
Management
Marketing, Sales, Service

Customers

Partners

Knowledge Management
Collaboration,
Decision Support

Supply Chain Management

Sourcing, Procuring

Partner Relationship
Management, Selling,
Distributing

Employees

Suppliers

Integrated Systems
ERP systems
Supply Chain Management Systems
Customer Relationship Management Systems

CRM AND SCM

Customer Relationship Management Systems
Manage customers
Three parts Sales, Marketing and Service
One view of organization at every touch point
(customer interaction)

Supply Chain Management Systems

Manage suppliers
Push Model (based on forecasted demand)
Pull Model (based on actual order)

ERP: Enterprise Resource Planning

Major objective is to integrate all departments
and functional information flows across a
company
Enterprise wide framework to support business
processes of the company
Integrated, real time view
Will bring together sales, distribution, order
management, production planning, logistics,
human resources and accounts/finance areas
within the company

DSS, BI AND BA SYSTEMS

Types of decisions
Structured
Repetitive
Routine
Answers generally can be automated

Unstructured
One of a kind
Need judgment, insight etc.
Cannot be automated

Decision Support Systems

Provide information to decision makers during
the decision making process
Use analytical models, specialized databases
as well as decision makers insights
Examples include Customer selection, loyalty,
pricing, simulating and optimizing supply
chain flows

Some modeling activities include

What-if Analysis
Change one variable, see impact on outcome
Example: how does advertising dollar cuts relate to change in
sales

Sensitivity Analysis
Repeated changes in the same variable and impact on outcome
Unsure about what the acceptable range of values for a variable
is

Optimization
Find an optimum value for certain variables, given constraints
What is the best combination of TV/Radio ads given our budget
and customer reach

Decision Support for Sr. Management

Balanced Scorecard
4 parameters: financial, customer, processes and
internal learning

GDSS
Help structure and facilitate group interaction and
decision making

Expert Systems
Rule based reasoning and automating for certain
tasks

Knowledge Management Systems

Knowledge gathering, organizing and sharing
systems
Use this collective knowledge for best
practices, policies, business solutions etc.
Conversion of implicit to explicit
Challenges?

BI AND BA

Business Intelligence
Fancy term to describe systems for
Gathering/collecting data
Storing it
Analyzing it
Reporting it
Integrating it with other systems
Definition may or may not include tools for
analysis

Business Analytics
Information system that has
Tools to analyze the data in greater detail
Even answer questions on what-if scenarios
Build predictive models on various factors for
future and for explanation

Chapter 13 from textbook as reference point

SESSION 4: SYSTEM ANALYSIS AND

DESIGN

Building Information Systems

Why build?
What other options exist?
Outsourcing?
Rent/Lease (Infrastructure/ Software)
Buy? ( Custom-made versus Generic)

Systems Analysis
System Analysis: Look at a business problem
Define the problem
Identify the causes
Identifying a solution
Specify information requirements in terms of data
(Who needs what, when and where)
Multiple solutions possible, feasibility analysis,
reports needed

System Design
System Design: Describe what the system
should do to meet the information
requirements
Specification to the last detail
Like a blue print of the house
Output, input, interface, processing, security,
training, change etc.

Everything that the system building will need

all the information raw materials

Next steps: Systems Development and

Maintenance
Programming
Testing
Unit Testing
System Testing
Acceptance Testing

Conversion: changing to the new system from old

Parallel strategy: both old and new

Direct cutover: just new
Pilot study: limited parts of organization
Phased approach: parts of system
Documentation and training

Production and Maintenance

Two approaches to Technology

Solutions
Plan Driven: Focus on minimizing up-front
uncertainty and ensuring that the solution is fully
defined before implementation begins in order to
maximize control and minimize risk.
(TRADITIONAL)
Change Driven: Focus on rapid delivery of
business value in short iterations in return for
acceptance of a higher degree of uncertainty
regarding the overall delivery of the solution.
(AGILE)

Approach to System Development

Traditional Waterfall model: one phase feeds
into the next
Inflexible due to high structure
Very clear division of roles and responsibilities

Rapid Application Development

Includes Agile methods such as Scrum, Joint
Application Design etc.

Waterfall Model: Ideal

http://www.csse.monash.edu.au/~jonmc/C
SE2305/Topics/07.13.SWEng1/html/text.ht
ml

Steps in Waterfall model

Analysis: Find out user requirements

Specification: What will the system do
Design: Create (or adapt) the actual solution
Implementation: Once designed, develop the
solution
Testing: Does the system work as it is supposed
to?
Integration: Does it work when put in practice?
Maintenance: Modify as new requirements come
up

Waterfall model: Actual

http://www.csse.monash.edu.au/~jonmc/C
SE2305/Topics/07.13.SWEng1/html/text.ht
ml

AGILE: Different approach to

Development
Focus on continuous improvement and early
feedback from the customer on how the
solution meets the needs
Exposes flaws earlier, reduces wastage
Shorter development cycles

SCRUM: One Agile Approach

Scrum focuses on objective-based production
processes
It accepts the ever-changing and
unpredictable nature of software
development, allowing for greater flexibility
and creative scope when formulating tasks for
the team