MSYS 200
Five-Component Framework
- 5 fundamental components of an information system (computer based software): hardware, software, data, procedures, people * in order from simplest to most complex
What is an information system?
- A group of components that interact to produce information or achieve a purpose
How Important Are Information Systems to Our Economy?
- Big benefit to economy - providing many jobs and growth - Industry Canada categorizes sectors and collects data about them.
How will the Changes in IT and IS affect the way we live and work?
- Business is changing because of advances in IS and IT - need better understanding of how IT can be used to support innovation - Ability to find, process understand, visualize then communicate data is an important skill
Bridge
- Data - forms the bridge between the computer side and human side
MIS Key Elements
- Development and use - Information systems - Goals and objectives
IS compared to IT
- IS includes people - Including people in the system impacts how you design and implement systems - Successful business people take advantage of crucial differences between IT and IS to improve their systems
Information Generated by a Business Process is Important Because...
- It lets us know when we need to make payments for goods/services received - Helps us keep track of what we have delivered and what has not been delivered o Keeps inventory up to date
What is Information?
- Knowledge derived from data o Data: recorded facts or figures o How much you earn per hour in your industry = data o The average hourly wage in your industry = information - Information is data presented in a meaningful context - Information is data processed by summing, ordering, averaging, grouping, comparing, or other similar operations - A difference that makes a difference - Graphs display data that you perceive and from that perception you conceive information o If it is on paper or a screen = data, if it is in your mind = information
Actors
- People and hardware - take actions
Business Processes and Decision Making
- Processes have to work so that companies can cover costs and earn profit - Business processes are central to everything an organization does - Business processes must work together - Each business must o Obtain payment o Cover costs o Make profit - A cup of coffee and a muffin at the Tim Hortons o Ordering o Receiving o Storing o Paying
Skills Professionals need for IS
- Professionals need to expand their knowledge of mobile devices and applications that include project management software, business graphics, and collaborative systems (google docs.)
Factors Affecting IS Today:
- Shrinking of device size - Existence everywhere (people take cellphones everywhere) - Adoption of location-based services (GPS)
Instructions
- Software and procedures - software is instructions for hardware and procedures are instructions for people
Consumers are accustomed to yearly advances in
- devices (smaller, more powerful)services (faster, more reliable) - delivered immediately, usable, available 24/7, perfect containing no errors - costs that are either lower or services greater for same cost
What is a Business Process?
- is a series of activities, tasks, or steps designed to produce a product or service Inventory management processes → manufacturing processes → sales processes → customer support processes - Network of activities, resources, facilities, and information that interact to achieve some business function
Characteristics of Good Information:
1. Accurate o Information that is factual and verifiable o Correct and complete 2. Timely o Produced in time for its intended use 3. Relevant o Information that is appropriate to both context and the subject 4. Just barely sufficient o Adequate information to perform the task o Do not need additional, extraneous information o Knowing what information to ignore is difficult 5. Worth its cost o Appropriate relationship between the cost of information and its value
5 Occupations that ICTC believes will have Above-Average Growth Rates:
1. Computer and Information Systems Managers 2. Computer Engineers (except software engineers and designers) 3. Database Analysts and database administrators 4. Computer programmers and interactive media developers 5. Graphic arts technicians
Steps in Decision Making Process
1. Intelligence Gathering - decision makers determine what is to be decided and what the criteria for the decision will be, and what data are available o Communication applications - email, video conference, word processing o Data analysis applications 2. Alternatives Formulation - decision makers lay out various alternatives o Communication applications 3. Choice - analyze alternatives and select one o Spreadsheets o Financial modelling 4. Implementation- implement the decision o Communication applications 5. Review - may lead to another decision o Communication applications o Reporting systems o Spreadsheets
Decisions Occur at 3 Levels:
1. Operational Decisions 2. Managerial Decisions 3. Strategic decisions
What Do Business Professionals Need to Know About Computer Hardware? Recall three key IT themes that have emerged
1. Price and performance advances Ð Recall Moore's Law - price of processing power drops Ð Data storage and network capacity have increased 2. Smaller is better Ð And is more mobile 3. The network is the thing Ð Power of IT is in the power of the network accessed - Computer hardware - the electronic components and gadgets that input, process, output, and store data according to software instructions - Components: - Central processing unit (CPU) - "the brain" Ð Can be dual-processor and quad-processor computers Ð Vary in speed, function, cost Ð Works in conjunction with main memory (or random access memory, RAM) Ð Reads data and instructions from memory, stores results of in RAM
Need Individuals with:
1. Technical Skills 2. Specific technology and industry experience 3. Satisfactory communication and other business skills - core to establishing and maintaining competitive advantage
An Information System to Support Counter Sales
Fully automated Ð Cashiers do not require extensive training Ð Cashiers are trained only in how to use cash register Ð Cashiers do not work directly with programs on computer ¥ Computer in cash register communicates with computer that hosts Inventory Database ¥ Programs record sales and makes changes
Business Process Management
George Box - a byproduct of every business process is information about how the process can be improved - BPM promotes development of effective and efficient processes through continuous improvement and innovation o Methods of BPM o Total Quality Management (TQM) o Six Sigma o Lean Production - Information about the process helps to better manage the process itself
What is a Business Process?
Inventory management processes → manufacturing processes → sales processes → customer support processes - Network of activities, resources, facilities, and information that interact to achieve some business function
What Are the Major Operating Systems?
Nonmobile clients ¥ Windows Ð Used for personal computer clients ¥ MacOS Ð Macintosh clients ¥ Unix Ð Workstation clients ¥ Linux Ð Just about anything
Server
Operating Systems - programs that control the server computers resources Application Programs - applications that are processed on server computers
Client
Operating systems - programs that control the clients computer resources Application Programs - applications that are processed on client computer
Principles of Competitive Advantage
Product Implementations: 1. create a new product or service 2. enhance products or services 3. differentiate products or services System Implementations: 4. Lock in customers and buyers 5. lock in suppliers 6. raise barriers to market entry 7. establish alliances 8. reduce costs
Structured decision
a decision where there is an understood and accepted method for making the decision o Ex. A formula for computing the reorder quantity of an item in inventory Ð Example of Structured - weather forecasting
Unstructured decision
a decision where there is no agreed-upon decision making method o Ex. Predicting future direction of economy or stock market o Ex. Assessing how well suited an employee is for performing a particular job Ð Example of Unstructured - weather itself
What are the components of a business process?
activities, resources, facilities, information
People
actors who want to achieve a particular outcome by interacting with the system
Managerial Decisions
allocation and utilization of resources - Management Information Systems (MIS) - info systems that support managerial decision making
Data
basic building blocks of information (facts or observations)
Management Information Systems (MIS
comprise the development and use of information systems that help businesses achieve their goals and objectives
Strategic Decisions
concern broader organizational issues o Ex. Starting new product line, buying new warehouse, etc.
Operation Decisions
concern day to day activities of an organization - Transaction Processing Systems (TPS) - info systems that support operational decision making
Hardware
electronic components and associated gadgetry that constitute a computer system (tablet, computer, phone
Call Network Effects and Lock-in of Technology
increase in the number of participants results in a significant rise in the value of good or service ¥ The value that is received from using certain technologies increases significantly as the number of users increases. - People use networks to interact - the more people on a network the more that will want to join and become locked in making it hard to leave
Procedures
instructions or processes that you follow to achieve your desired objective
Competitive Strategy figure
look in notes
Information
o Activities use information to determine how to transform the inputs received into the outputs produced o Information created in processes is a key focus on this book. o Business processes create information o Business Process Modelling Notation is a standard used to document a business process.
MIS empowers users to reach goals
o Exist to assist business people o Need to be developed for right reason
Resources
o Items of value ♣ Employees ♣ Ingredients ♣ Customers cash o Not activities because they are external and not under companies direct control
Activities
o Manual actions (people following procedures) o Automated or controlled procedures used by computers (hardware directed by software) o Combination of manual and automated o Activities transform resources and information of one type into resources and information of another type ♣ Example: Payment (activity) transforms quantity received (information) and shipping invoice (information) into supplier payment (resource)
MIS aids businesses in achieving objectives
o Organizations themselves don't do anything o People within an organization or business who: sell, buy, design, produce, finance, market, account, and manage
Facilities
o Structures used within the business process ♣ Equipment ♣ Trucks ♣ Filing cabinets ♣ databases
Within the next decade:
o Unlimited storage will be almost free o Analytical software will reveal hidden information o The real and virtual world will collide as wide-area networks (WANs) become cheap, reliable, and widely available o These technology trends will enable deep, powerful, performance-enhancing innovations that will be felt in almost every industry
How Can IT Create Business Value
productivity, structure of competition, benefits to the end customer
Information Technology (IT)
products, methods, inventions and standards that are used for producing information - IT refers to raw technology - only H, S, and Data components
Software
programs that run or operate on computer systems
Information And Communications Technology (ICT) sector
provides products and services that other industries rely on to get their work done - most closely related to use of IS in Canada - Help people more effectively use IS - sector provides products, services that other industries rely on - Includes companies involved in software, computer services, cable, program distributors, telecommunications, manufacturing, wholesaling
Moores Law
stating that the number of transistors per square inch on an integrated chip doubles every 18 months. Moore's prediction has proved generally accurate in the 40 years since it was made. Sometimes, this law is stated as the speed of a computer chip doubles every 18 months. While not strictly true, this version gives the gist of the idea. - shrinking of device size ¥ The cost of computers has declined over the past 50 years, the same amount of money can buy increased computer capacity
Open Source software
typically free and modifiable, source code is publicly available
Benefits to the End customer
¥ - IT helps make processes more efficient and changes the nature of the competition. Ð Consumer may see cheaper and better goods and services. Ð Example: Netflix can use analytics to recommend additional movies based on your viewing history Ð Consumer benefits from the higher investment in IT
Business Processes and Value Chains
¥ A value chain is a network of value-creating activities Ð Primary activities Ð Support activities ¥ Made up of at least one and often many business processes ¥ Each step in the chain adds some value to the product/service.
Computer Data Sizes
¥ All computer data are represented by bits: numbers, currency amounts, photos, recordings ¥ Grouped into 8-bit chunks: Bytes ¥ If a picture is 100 000 bytes in size, that means the length of the bit string that represents the picture is 100 000 bytes (or 800 000 bits, since 8bits per byte)
What Types of Applications Exist, and How Do Organizations Obtain Them?
¥ Application software performs a service or function. ¥ Horizontal-market application software provides capabilities common across all organizations and industries - off the shelf Ð Graphics programs, word processors, spreadsheets, presentation software ¥ Vertical applications serves the needs of a specific industry. - 0ff the shelf and off the shelf then customized Ð Dental offices, auto mechanics, warehouses for inventory - custom developed
Self-Driving Cars: Disrupt Businesses
¥ Auto sales Ð Fewer cars on road may mean fewer cars sold ¥ Auto loans, insurance, car repair ¥ More jobs for engineers, programmers, systems designers ¥ More computer hardware, sensors, and cameras in vehicles
What is the role of information in business processes?
¥ Business process of moving actual goods and providing services to real people Ð Data and information are always created Ð For any physical flow, there is potential to capture a flow of information Ð For any flows of service, there is potential flow of data and information ¥ Business processes generate information Ð Brings together important items of data in a context ¥ Information is useful to manage business processes - Any time a good is moved or service is provided - data and info. are created
Volatility of Memory
¥ Cache and main memory are volatile Ð Contents are lost when power is off ¥ Magnetic, optical disk memory are non-volatile Ð Contents survive when power is off Ð Saving often often saves!
: What Is the Relationship Between Innovation and IT?
¥ Changes to industry structure often occur through innovation ¥ Bower and Christensen suggested two general types of technology innovations: 1. Sustaining technologies: changes in technology that maintain the rate of improvement in customer value 2. Disruptive technologies: new package of attributes to accepted mainstream products
Porter's Five Forces Model
¥ Commonly used model to assess an industry structure ¥ States that five competitive forces determine industry profitability 1. Bargaining power of customers 2. Threat of substitutions 3. Bargaining power of suppliers 4. Threat of new entrants 5. Rivalry among existing firms ¥ Intensity of each determines the characteristics of the industry, and he profitable/sustainable it is
Sustained Competitive Advantage
¥ Companies must find a distinctive way to compete ¥ Companies must successfully integrate many technology systems with people and procedures in the organization ¥ While competitors might be able to purchase the technology, it takes time for people to gain the necessary experience and skill ¥ Matching the entire set of information systems is a high barrier for companies with less experience and success in integrating people and technology
Can Competitive Advantage Through Information Systems Be Sustained?
¥ Competitors often react to innovations by replicating the technology ¥ The more ubiquitous—existing everywhere—information technology becomes, the less competitive advantage information technology provides ¥ While this may be true about technology, it isn't true about information systems which also include organizational procedures and people along with hardware and software ¥ In business, people make the difference!
Specifying Hardware with Computer Data Sizes
¥ Computer disk capacities are specified by amount of storage Ð 500 GB disk can contain 500 GB of data, programs ¥ CPU speed in cycles called hertz Ð Slow personal computer speed of 3.0 Gigahertz Ð Fast PC 4.0+ GHz ¥ 12 GB+ RAM for large applications
Impact of the Internet of Things
¥ Consumer homes is an attractive target for smart device makers ¥ GE's Industrial Internet Ð Program focused on creating smart devices, analyzing data from them, then making changes that increase efficiencies, reduce waste, improve decision making Ð Greatest potential for smart devices in hospitals, power grids, railroads, and manufacturing plants
Diffusion of Innovation
¥ Defined by Everett Rogers ¥ "Process by which an innovation is communicated through certain channels over time among members of a social system." ¥ Stages: 1. Knowledge (when first heard about an innovation) 2. Persuasion (when you become interested) 3. Decision (consider pros and cons of adopting) 4. Implementation (use, and decide to continue) 5. Confirmation (use the innovation to its full potential)
Internet of Things (IoT)
¥ Everyday objects embedded with hardware capable of sensing, processing, transmitting data ¥ Connect to a network to share data with any other applications, services, devices ¥ Objects becoming connected with each other can communicate, interact with each other
What Is Business Technology Management (BTM)?
¥ Focus on innovation has influenced skills required in ITC industry ¥ No longer high-tech skills only ¥ Business need people who can drive innovation and use more traditional business skills ¥ Thus, new learning outcomes developed for Business Technology Management program, designed by Canadian Coalition for Tomorrow's ICT Skills (CCICT) ¥ Universities across Canada are developing programs for BTM with the new outcomes ¥ Variety of course topics ¥ Business and technical training ¥ Financial accounting ¥ System analysis and design ¥ Project management ¥ Marketing ¥ And more
Productivity
¥ IT allows a company to Ð make more output from the same inputs, Ð and/or Ð better output, Ð and/or Ð make the output faster than before the technology
Structure of competition
¥ IT can alter the way corporations compete. Ð Competitive structure changes because of IT to include software and tech support Ð Example: video rental industry ¥ Move to stream, rent, and watch movies online eliminated need to go to store, and ended problems of blockbusters being unavailable, late fees, damaged merchandise, and others ¥ The structure of competition had been altered by technological advancement
Productivity Paradox
¥ In 1989, economist Stephen Roach predicted there would be no increase in labour productivity associated with increase in IT investment ¥ "We see computers everywhere except in the productivity statistics." ¥ The Productivity Paradox was born ¥ Over time, measurement error may be affecting observed lack of productivity increase from IT investments. Ð Increasingly service-based economy Ð Intangible benefits associated with IT
Primary Activities
¥ Inbound logistics: Receiving and storing inventory ¥ Operations: Using inputs to create or generate the final product ¥ Outbound logistics: Retrieving and distributing the product or service to the customers ¥ Marketing and sales: Convincing the customer and enabling purchase of the good or service ¥ Service: Supporting the customers' use of the product or service
Owning Versus Licensing
¥ License ¥ Right to use specified number of copies ¥ Limits vendor's liability ¥ Site License Ð Flat fee to install software on all company computers or all computers at specific site ¥ Open Source ¥ No license fee
A Competitive Strategy
¥ Organization's response to structure of its industry ¥ Porter identified four competitive strategies: 1. Cost leadership across industry 2. Cost leadership focused on particular industry segment 3. Differentiation across industry 4. Differentiation focused on particular industry segment ¥ Porter says goals, objectives, culture, and activities must be consistent with strategy
How Are Organizational Strategy and Industry Structure Related?
¥ Organizational strategy reflects a company's organization's goals and objectives ¥ Developed from organizational structure ¥ Creates the value chain for organization ¥ Establishes the structure, features, and functions of information systems ¥ A company's strategy is influenced by the competitive structure of the industry the company is in
Competitive Advantage via Business Processes
¥ Organizations can gain a competitive advantage by last five principles of competitive advantage: Ð Locking in customers - make it difficult or costly to switch ♣ switching costs Ð Locking in suppliers - make it difficult for suppliers to switch (or make it easies to connect with you) ♣ Making it easy to connect to and work with organization Ð Creating entry barriers - make it difficult and costly for a new competitor to enter Ð Establish alliances with other organizations ♣ This creates standards ♣ Promotes product awareness ♣ Develops market size ♣ Reduces purchasing costs Ð Reduce costs ♣ And/or increase profitability ♣ Higher shareholder value ♣ More cash ♣ Fund further innovation
Competitive Advantage via Products and Services
¥ Organizations gain a competitive advantage by first three stages of competitive advantage principles: Ð Creating new products or services Ð Enhancing existing products or services Ð Differentiating their products and services from those of their competitors ¥ Information systems can achieve these objectives
How Do Information Systems Provide Competitive Advantage?
¥ Organizations respond to the five competitive forces in numerous ways ¥ For our purposes, we can distill those ways into the list of principles ¥ You can also apply these principles to a personal competitive advantage ¥ Some of these competitive techniques are created via products and services, and some are created via the development of business processes
Information System to Support Payment
¥ Payment receives Quantity Received and Shipping Invoice and produces Supplier Payment ¥ Mostly manual Ð Accounts Payable Clerk reads documents and issues payment or investigates discrepancies Ð Processing exceptions complicated ♣ Programming expensive ♣ Probably not effective
Types of Hardware
¥ Personal computers: classic computing devices Ð Gradually being supplanted by tablets, mobile devises ¥ Tablets: brought to prominence with iPad in 2010 Ð Microsoft Surface, Google Nexus, also available. ¥ Phablet: functionality of a smartphone with the larger screen of a tablet Ð Samsung Galaxy, iPhone Plus ¥ Smartphones: Cell phones with processing capabilities Ð Samsung Galaxy 8, Google Pixel 2, iPhone 8. ¥ Server: computer design to support processing requests from remote computers and users. Ð PC on steroids Ð Differs from a PC mostly in what it does Ð Clients - PCs, tablets, smartphones that access a server ¥ Server farm Ð Collection of many servers- Ð Often in large truck trailers, holding 5,000 or more servers, with one power cable and one processing cable coming out.
Self-Driving Cars
¥ Pilot project in Ontario started in 2016 ¥ Google cars logged 3 million miles by 2017 ¥ Make life easier, cheaper, safer ¥ Reduce human error Ð Fewer accidents Ð Avoid costly traffic tickets, parking tickets, DUI citations ¥ Eliminate need for multiple cars
Virtualization
¥ Process by which one physical computer hosts different virtual (not literal) computers within it ¥ Host operating system runs one or more operating systems within it. Ð Controls activity of virtual machine ¥ Virtual machine: the hosted operating systems ¥ Three types Ð PC virtualization Ð Server virtualization Ð Desktop virtualization
How Do Information Systems Improve Productivity?
¥ Productivity can be increased through efficiencies or effective processes ¥ Increasing efficiency Ð business processes can be accomplished either more quickly or with fewer resources and facilities (or both) Ð "doing things right" ¥ Increased effectiveness Ð company considers offering either new or improved goods or services that the customer values Ð "doing the right things"
An Information System to Support Purchasing
¥ Purchasing clerk computer runs program that queries database and identifies stock levels and generates Purchase Order ¥ Designers balanced work between automation and manual activity Ð Searching database is repetitive ♣ Automated process Ð Selecting suppliers is complicated ♣ Manual process
Support Activities
¥ Range of activities that do not add value directly to the product ¥ Support the primary activities ¥ Include: Ð Firm infrastructure Ð Human resources Ð Technological development Ð Procurement ¥ Contribute indirectly to production, sale, and service ¥ Add value and costs Ð Produce margin that is difficult to calculate ¥ More efficient support activities helps companies increase their profit margins Ð Examples: financial accounting systems Ð Human resources systems Ð Production systems Ð customer relationship management systems
How Can New Hardware Affect Competitive Strategies?
¥ Smart device Ð Processing power, large memory, Internet access, Wi-Fi connectivity, ability to interconnect with other devices and applications ¥ Potential to disrupt existing organizations ¥ Internet of Things (IoT) ¥ Self-driving vehicles ¥ 3D Printing
What Is Firmware?
¥ Special software on read-only memory (ROM) Ð Printers, print servers, communication devices Ð As if program's logic designed into device's circuitry Ð Changeable and upgradable, usually IS professionals
Mobile clients
¥ Symbian Ð Nokia, Samsung, and other phones ¥ BlackBerryOS Ð ResearchInMotion Blackberries ¥ iOS Ð iPhone, iPod Touch, iPad ¥ Android Ð Samsung, Google, HTS, and Sony smartphones, tablet ¥ Windows 10 Ð Nokia and Microsoft Surface
The Amazon of Innovation
¥ To fulfill 36.8 million items shipped per day in holiday season, Amazon needed enormous infrastructure ¥ During off-season, the infrastructure was excess capacity ¥ Leased the capacity to other companies, and created cloud services ¥ Amazons business lines were now separated into three: online retail, order fulfillment, cloud services ¥ Retail business margins are thin; products sold at a discount, and 2-day shipping is free for Prime members ¥ Must drive employees hard ¥ Order fulfillment services are sold - you can ship your inventory to Amazon to treat as if their own ¥ Customers won't know Amazon was involved ¥ Amazon web services allow leasing of computer equipment ¥ Very flexible offers and payment plans - can buy computer time for less than $0.01 p/hour. ¥ Other services have included ¥ WorkMail (competes with Microsoft Exchange) ¥ Amazon Home Services (professional local services) ¥ Destinations (travel) ¥ Dash (re-ordering) ¥ Prime Air (drone delivery) ¥ Fulfillment by Amazon - where sellers can ship to Amazon for stocking, packaging, and shipment. ¥ Customers can sell on Amazon or their own channel, or both
2 Forms of Value Chains
¥ Upstream: when organization expands into activities related to the basic raw materials of a process Ð Tire company decides to manufacture its own rubber ¥ Downstream: organizations expands into activities closer to the customer end Ð Mining company begins to cut and finish its own diamonds
How do Information systems support business processes?
¥ Used by activities in a business process Ð Several activities may use one system Ð Activity may have own system Ð Activity may use several systems ¥ Analysts and designers determine relationship of activities to information systems Ð Relationship determined during systems analysis
5 Key Transformative Technologies:
¥ Virtual and augmented reality ¥ 5G mobile ¥ 3D printing ¥ Blockchain ¥ Artificial intelligence
Server Operating Systems
¥ Windows Server Ð Used on servers ¥ Unix Ð Used on servers ¥ Linux Ð Used on servers
Binary bits (bits):
¥ how computers represent data Ð Either a zero or a one Ð Computer can be designed so an open switch represents zero, closed switch represents one Ð Or, magnetism in one direction represents a zero, magnetism in the next direction represents one Ð Optical media has pits burned into the surface of the disk so they reflect light Ð Reflecting indicates a one, no reflection indicates a zero
Why Should I Care About Productivity and Innovation?
¥ labour productivity = ratio of gross domestic product (GDP) of a country divided by the total paid hours worked by people in the country ¥ primary indicator of our per capita income, and increases are the best measure of Canada's growth (Conference Board of Canada) ¥ Canada has not increased its productivity ¥ As of 2014, Canada's labour productivity was $50 per hour ($67/h in U.S., $75/h in Norway) ¥ to increase productivity, countries much innovate and adapt ¥ Canada also needs to open to more competition and increase machinery and equipment in the economy ¥ Computers have so far not impacted productivity of economies
Common storage devices
Ð Magnetic disks (Hard disks): most common Ð Solid-state storage (SSD drive): faster than hard drives, more expensive Ð USB flash drives: Small, portable Ð Optical disks (CD/DVD): Small, portable
Automation of processes
Ð Transfer work done by people to computers Ð People follow procedures Ð Computers follow software instructions ¥ Moving work from human side to computer side
