Simon Text Book

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Chapter 2
Information Systems in Organizations
Introduction to Information Systems
Judith C. Simon
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Chapter 2 Major Topics

• Common types of information systems
• Strategic and other managerial uses of
  information systems
• Strategic decisions related to information
  systems
• Functional uses of information systems
• New concerns because of information technology

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Transaction Processing System (TPS)

• Transaction some business activity, such as the
  sale of a product or service
• TPS was one of the first types of business
  information systems to be developed
• TPS maintains records of business transactions
  and analyzes the data to provide desired output

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Transaction Processing Systems
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Batch Processing
Transactions of mail-order purchases via credit
card
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All transactions will be checked as a group
without human interaction.
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Online Processing
Invalid credit card numbers are checked by clerks
These transactions require human interaction.
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Information Reporting System

• One of the first forms of management information
  system
• Developed initially to provide reports to
  management based on transaction processing
  systems
• Examples of reports inventory quantities
  available for each product, processing costs,
  product sales per produce or per sales
  representative, exception reports

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Information Reporting Systems
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Management Levels and Decision Types

• Top management
• Makes strategic decisions does long-term
  planning typically uses more external data than
  other levels
• Middle management
• Makes tactical decisions does shorter-term
  planning than top management converts top
  management desires into action plans
• Lower management
• Makes operational decisions uses more detailed
  internal data than other levels has more
  structured decisions than other levels

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Managerial Uses of Information
Top Management Strategic Decisions
Middle Management Tactical Decisions
Lower Management Operational Decisions
Information systems provide managers at different
levels with decision-making information.
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Functional Uses of IS - Examples

• Human resources IS handles pre-employment
  activities and employee data
• Accounting/Financial IS maintains transaction
  records, e.g., for receivables and payables, as
  well as data for budgeting and financial planning
  
• Marketing/Sales IS used for such activities as
  advertising decisions, order management, trends
  analysis
• Production/Operations IS handles creation of
  products and services and methods of providing
  these items to others

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Cross-Functional Relationships

• Cross-functional relationships have become a
  major part of IS developments, with multiple
  functions working together to produce the best
  result
• Supply chain sequence of processes and partners
  that deliver products and services to a customer
• Demand chain handling customer product or
  service demands
• Value chain entire process from initial demand
  through supplying of product or service

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Global Concerns

• Businesses today must expect work and trade to
  occur around the world and around the clock and
  must plan and make strategic decisions
  accordingly
• Businesses must be knowledgeable about technology
  issues in working with other countries to
  determine the best combinations of locations
• Local businesses must realize that they are are
  competing globally even if they do not have
  physical facilities in other countries

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A Global Concern is ...
Businesses can now compete with your organization
worldwide regardless of their home location.
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Ethical Issues

• Business ethics refers to professional standards
  of conduct.
• Ethical issues include
• Privacy, primarily concerned with keeping
  confidential data confidential
• Security, including protection of data, hardware,
  and software
• Accuracy, ensuring that data cannot be changed
  without authorization
• Ownership, also referred to as intellectual
  property, identifying clearly who has the rights
  to items developed and protecting those rights

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An Ethical Concern is ...
Technologys rapid developments have outpaced the
creation of laws and guidelines for appropriate
behavior in using and developing the technology.
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Social Issues

• Social issues are related to maintaining or
  improving the quality of life.
• Social issues related to computer use include
• working conditions
• education
• environmental protection
• health care
• public transportation

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A Social Concern is ...
Technology can increase the capability of
studying social issues but can also cause new
issues to arise, such as waste of natural
resources.