Chap 2 - Intro To Info Sys

Slide 2.
Chapter 2
Basic concepts: an introduction
to business information systems
Bocij, Greasley and Hickie, Business Information Systems PowerPoints on the Web, 5th edition © Pearson Education Limited 2015
Slide 2.2
Learning objectives
• After this lecture, you will be able to:

– identify systems and their components;
– identify and describe the behaviour of systems;
– identify types of BIS, distinguishing them by
category and the organisational level at which they
are used;
– describe e-business, e-commerce and ERP and
evaluate their relevance to the organisation;
– identify basic strategies and methods used to gain
competitive advantage through the use of BIS.
Slide 2.3
Management issues
• From a managerial perspective, this chapter

addresses the following areas:
– How systems theory is used as a means of defining
problems and situations so that they
can be understood more easily and BIS can be
developed to support them.
– How managers can maximise an organisation's use
of technology by understanding BIS.
– How BIS can help achieve competitive advantage.
Slide 2.4
Systems theory
• Systems theory provides a powerful means of

analysing and improving business processes. It can
be applied to a wide variety of different areas and is
fundamental to gaining a good understanding of the
managerial application of BIS.
• A system can be defined as a collection of
interrelated components that work together towards a
collective goal. The function of a system is to receive
inputs and transform these into outputs.
Slide 2.5
Systems theory
Other definitions
A set of objects or entities that interrelate with one

another to form a whole.
Littlejohn, 1996
Systems are:
Predictable
Consistent
Responsive to
Environment
Solar System
Slide 2.6
Characteristics of Systems
Systems are open to the
environment to varying extents.
ZCAS ZCAS ZCAS

Physical Cultural Political
Environment: Environment: Environment:
Lusaka and Diverse Local, state
Copperbelt students, elected
region faculty, staff, officials.
and
community.
Slide 2.7
Characteristics of Systems
Box of stones is not a system.

Solar system is a system.
What is the difference?
Wholeness and Interdependence
The whole is more than the sum of its

parts.
The parts are interdependent.
Slide 2.8
Interdependence/Interconnectedness
Ripple Effect
Frazier Episode: Daphne lied to her ex-boyfriend.
Everyone got pulled into the lie. The family and friends
are a system.
Labor Strike: If ZCAS Staff go on strike. Everyone

connected with ZCAS is affected – students, staff,
administrators, etc. ZCAS is a system.
Slide 2.9
System characteristics
• The components of a system work towards a

collective goal. This is known as the system’s
objective. The objective of a system is normally
very specific and can often be expressed in a single
sentence. As an example, the objective of a car
might be expressed simply as follows to transport
people and goods to a specified location.
• System objective: All components of a system
should be related to one another by a common
objective.
Slide 2.10
System characteristics (Continued)
• Systems do not operate in complete isolation. They are

contained within an environment [2] that contains other
systems and external agencies. The scope of a system is
defined by its boundary [3]. Everything outside of the boundary
is part of the system’s environment, everything within the
boundary forms part of the system itself. The boundary also
marks the interface [4] between a system and its environment.
The interface describes exchanges between a system and the
environment or other systems.
• [2] Environment: The surroundings of a system, beyond its
boundary.
• [3] Boundary: The interface between a system and its
environment.
• [4] Interface: Defines exchanges between a system and its
environment, or other systems.
Slide 2.11
• Systems can be complex and can be made up of other, smaller

systems. These are known as subsystems [5]. Systems
composed of one or more subsystems are sometimes referred
to as suprasystems [6].
• The objective of a subsystem is to support the larger objective
of the suprasystem. For an organisation, the subsystems such
as marketing and finance would lie within the system’s
boundary, while the following elements would lie outside as part
of the business environment:
– Customers, sales channel/distributors, suppliers, competitors,
partners, government and legislation, the economy.
Slide 2.12
• An organisation will interact with all these elements that are

beyond the system boundary in the environment. We refer to
this as an open system [7]. Most information systems will fall
into this category since they will accept input and will react to it.
Totally closed [8] systems which do not interact with their
environment are unusual.
• [5] Subsystem: Large systems can be composed of one or
more smaller systems known as subsystems.
• [6] Suprasystem: A larger system made up of one or more
smaller systems (subsystems).
• [7] Open system: Interaction occurs with elements beyond the
system boundary.
• [8] Closed system: No or limited interaction occurs with the
environment.
Slide 2.13
System Family Structure
• Structure
• Subsystems
• Boundaries
• Feedback
Slide 2.14
Family Structure
• Structure- The organized pattern in which family

members interact (who does what in system)
– Involves a set of covert rules (boundaries) that
govern transactions in the family
– Over time patterns are set, roles assigned, and
things take on a sameness and predictability
Slide 2.15
Subsystems
• SUBSYSTEMS
– Smaller systems belonging to larger systems (hierarchy)
– Family consists of:
• Spousal Subsystem
– Negotiate, adjust, accommodate from family of origin
– Mutually supportive of each other in their development
– Neither is so accommodating as to lose his/her individuality
• Parental Subsystem
– Distinct from spousal relationship
– Children are not equal. It is not a democracy and children must
learn to deal with authority and unequal authority
• Sibling Subsystem
– Allows experimentation with peer relations
– Experiment with responsibility
– Learn to take on parental subsystem (negotiation)
Slide 2.16
Boundaries
• Invisible barriers that regulate the amount of contact
with others
– They protect the autonomy of the family
– Guide family or system in accomplishing it’s goal
• Three Categories of Boundaries
– Clear- firm and yet flexible allowing a degree of autonomy
– Rigid- implies disengagement within and between
systems; family members are isolated from each other
– Diffuse- characterized by enmeshed relationships;
extreme hovering and providing support when not needed
Slide 2.17
Galaxy
Suprasystem
Solar System
Subsystem & Suprasystem
Earth
Subsystem
Slide 2.18
FEEDBACK
• Process whereby information about past behavior is fed back
into the system in a circular manner.
– Positive Feedback- indicates that change has occurred
and been accepted
– Negative Feedback- indicates that the status quo is being
maintained
• Both feedback processes can be either good or bad
depending on the situation (think medical negative
results)
– Feedback processes are self corrective and serve to
temper variations and fluctuations and serve to increase
the probability of the survival of the system
Slide 2.19
Other Characteristics of Systems
Self-Regulation & Control
Goal-oriented
Activities controlled by aims/goals
A family’s aim/goal is to function as a family.
Members of family take on

roles to achieve aim/goal.
Slide 2.20

cont’
Interchange with Environment
Input from environment.
Output into environment.
System and Environment Affect Each Other
Slide 2.21

cont’
Balance (Homeostasis)
Systems seek balance.
Mothers nag children to behave.
Couples with problems try to work them out.
Gravity in the solar system.
Slide 2.22

cont’
Change and Adaptability
System must adapt to survive in a

changing environment.
Slide 2.23

cont’
Equifinality
Achievement of Goal of System
Goal may be achieved in various ways

and from different starting points.
Family structures are different – 2 parents, 1 parent, blended
Families interact differently from family to family.
Slide 2.24
Systems Models
A basic model of a transformation process
A generic model of a system
Slide 2.25
A generic open-loop system
A generic closed-loop feedback control system
Slide 2.26
A generic closed-loop feedforward control

system
Slide 2.27
Systems Cont’
• The linkage or coupling between subsystems
varies.
• The degree of coupling defines how closely linked

different subsystems are. It is a fundamental
principle of systems theory and BIS design that
subsystems should be loosely coupled.
• Systems or subsystems that are highly dependent

on one another are known as close-coupled
systems. In such cases, the outputs of one system
are the direct inputs of another.
Slide 2.28
Systems Cont’
• Decoupled systems (or subsystems) are less dependent
on one another than coupled systems and so are more able
to deal with unexpected situations or events.
• Such systems tend to have higher levels of autonomy,
being allowed more freedom to plan and control their
activities.
• Although decoupled systems are more flexible and adaptive
than close-coupled systems, this very flexibility increases
the possibility that inefficiencies might occur.
• The traditional method of production where material is held
‘in-hand’ as inventory is decoupled. In this arrangement, it is
not necessary for production to match sales so closely, but
this results in higher costs of holding inventory.
Slide 2.29
Systems Cont’
• Coupling. Defines how closely linked
different subsystems are. Loose coupling
means that the modules pass only the
minimum of information between them and
do not share data and program code.
• Close-coupled systems are highly
dependent on each other.
Slide 2.30
What is a BIS?
• ‘A business information system is a group of
interrelated components that work collectively to
carry out input, processing, output, storage and
control actions in order to convert data into
information products that can be used to support
forecasting, planning, control, coordination,
decision making and operational activities in an
organisation.’
Slide 2.31
Resources that support BIS
1. People resources: People resources include the users of an

information system and those who develop, maintain and operate the
system.
2. Hardware resources: The term hardware resources refers to all types
of machines, not just computer hardware.
3. Software resources: In the same way, the term software resources
does not only refer to computer programs and the media on which they
are stored, but the term can also be used to describe the procedures
used by people.
4. Communications resources: Resources are also required to enable
different systems to transfer data.
5. Data resources: Data resources describe all of the data that an
organisation has access to, regardless of its form.
Slide 2.32
Activity 2.1 – Example of information

systems
• What information systems might be found in

Organisations?
• For each system identified, list the people,

hardware, communications, software and data
resources involved.
Slide 2.33
Business Information Systems

Business Information Systems play a pivotal role in the
new economy and enterprise setting characterised by
strategic procurement, global outsourcing, physically
distributed operational environments, and global business
alliances.
Business Information Systems is a boundary-spanning

field of study relating to how information and
communication technologies (ICT) can be deployed to
improve business processes and enhance the
organisation’s value chain networks, which organisations
use to acquire, produce, and deliver goods and services all
over the world, through efficient, effective and competitive
use of ICT. Bocij, Greasley and Hickie, Business Information Systems PowerPoints on the Web, 5th edition © Pearson Education Limited 2015
Slide 2.34
The Role of Information Systems in

Business
Slide 2.35
Categories of information
systems
o Transaction Processing System (TPS)
o Office Automation Systems (OAS)
o Management Information System (MIS)
o Decision Support Systems (DSS)
o Executive Information Systems (EIS)
o Group Decision Support Systems (GDSS)
Slide 2.36
TRANSACTION PROCESSING SYSTEM
A transaction process system (TPS) is an information

processing system for business transactions
involving the collection, modification and retrieval of
all transaction data.
Characteristics of a TPS include performance,

reliability and consistency.
TPS is also known as transaction processing or real-

time processing.
Slide 2.37
TRANSACTION PROCESSING SYSTEM
Slide 2.38
Office Automation Systems

(OAS)
Office automation system is an information
system which is computer based that collects,
processes, stores and transmits electronic
messages.
Office automation refers to the varied

computer machinery and software used to
digitally create, collect, store, manipulate, and
relay office information.
Slide 2.39
Slide 2.40
Management Information System

(MIS)
Management information system (MIS) is a set of
systems and procedures that gather data from a range of
sources, compile it and present it in a readable format.
Managers use an MIS to create reports that provide

them with a comprehensive overview of all the
information they need to make decisions ranging from
daily minutiae to top-level strategy.
Today's management information systems rely largely on

technology to compile and present data, but the concept
is older than modern computing technologies.
Slide 2.41
Decision Support Systems (DSS)

A decision support system (DSS) is a computerized
information system used to support decision-making in an
organization or a business.
A DSS lets users sift through and analyze massive reams

of data and compile information that can be used to solve
problems and make better decisions.
The benefits of decision support systems include more

informed decision-making, timely problem solving and
improved efficiency for dealing with problems with rapidly
changing variables.
Slide 2.42
Slide 2.43
Executive Information Systems

(EIS)
EIS is also known as Executive Support System
(ESS).
An Executive Support System (ESS) is software that

allows users to transform enterprise data into quickly
accessible and executive-level reports, such as those
used by billing, accounting and staffing departments.
An ESS enhances decision making for executives.
Slide 2.44
Group Decision Support Systems

(GDSS)
A Group Decision Support System (GDSS) is an

interactive, computer-based system that helps a team
of decision-makers solve problems and make choices.
GDSS are targeted to supporting groups in analyzing

problem situations and in performing group decision-
making tasks
Slide 2.45
Slide 2.46
Advantages of computer processing
• Speed: Computers can process millions of instructions each second,

allowing them to complete a given task in a very short time.
• Accuracy: The result of a calculation carried out by a computer is likely to
be completely accurate. In addition, errors that a human might make, such
as a typing error, can be reduced or eliminated entirely.
• Reliability: In many organisations, computer-based information systems
operate for twenty-four hours a day and are only ever halted for repairs or
routine maintenance.
• Programmability: Although most computer-based information systems are
created to fulfil a particular function, the ability to modify the software that
controls them provides a high degree of flexibility. Even the simplest personal
computer, for example, can be used to create letters, produce cash flow
forecasts or manipulate databases.
• Repetitive tasks: Computer-based information systems are suited to highly
repetitive tasks that might result in boredom or fatigue in people. The use of
technology can help to reduce errors and free employees to carry out other
tasks.
Slide 2.47
Limitations of computer-based
processing
• Judgement/experience: Despite advances in artificial intelligence techniques and
expert systems, computer-based information systems are considered incapable of
solving problems using their own judgement and experience.
• Improvisation/flexibility: In general, computer-based information systems are unable
to react to unexpected situations and events. Additionally, since most systems are
created to fulfil a particular function, it can be difficult to modify them to meet new or
changed requirements.
• Innovation: Computers lack the creativity of a human being. They are unable to think in
the abstract and are therefore restricted in their ability to discover new ways of
improving processes or solving problems.
• Intuition: Human intuition can play an important part in certain social situations. For
example, one might use intuition to gauge the emotional state of a person before
deciding whether or not to give them bad news. BIS cannot use intuition in this way and
are therefore unsuitable for certain kinds of situations.
• Qualitative information: Managers often make unstructured decisions based on the
recommendations of others. Their confidence in the person they are dealing with often
has a major influence on the decision itself. Once again, BIS cannot act upon
qualitative information of this kind.
Slide 2.48
Usage and applications of computer-based

information systems
Usage and applications of computer-based information systems by

Figure 2.7
organisational level (shading denotes usage of BIS)
Slide 2.49
E-business and e-commerce and

Information Systems
• Electronic business (e-business): All electronically
mediated information exchanges, both within an
organisation and with external stakeholders
supporting the range of business processes.
• Electronic commerce (e-commerce): All
electronically mediated information exchanges
between an organisation and its external
stakeholders.
– Buy-side e-commerce: E-commerce transactions
between a purchasing organisation and its suppliers.
– Sell-side e-commerce: E-commerce transactions
between a supplier organisation and its customers.
Slide 2.50
Enterprise systems
• Enterprise systems aim to support the business processes of an

organisation across any functional boundaries that exist within that
organisation. They use internet technology to integrate information
within the business and with external stakeholders such as customers,
suppliers and partners.
• Four main elements of an enterprise system are the following:
– Enterprise resource planning (ERP) which is concerned with internal
production, distribution and financial processes
– Customer relationship management (CRM) which is concerned with
marketing and sales processes
– Supply chain management (SCM) which is concerned with the flow of
materials, information and customers through the supply chain
– Supplier relationship management (SRM) which is concerned with
sourcing, purchasing and the warehousing of goods and services.
Slide 2.51
Figure 2.8 Enterprise system in comparison to separate functional applications
Slide 2.52
The virtual value chain
• Rayport and Sviokla have suggested the concept of the virtual value chain
(VVC) to explain how information can help to create competitive advantage.
In doing this, they refer to the physical marketplace and its virtual counterpart,
the marketspace. They suggest that companies adopting a virtual value chain
tend to go through three phases. In each phase, companies have the
opportunity to reduce costs, improve efficiency or find new ways of doing
things:
1. Visibility. Companies use information to examine the physical value chain more
closely. Technology is used to manage activities in the physical value chain more
efficiently.
2. Mirroring capability. Physical processes start to be replaced by virtual processes. A
parallel value chain is created in the marketspace. Put more simply, activities are
moved from the marketplace to the marketspace.
3. New customer relationships. Information drawn from the virtual value chain is used to
create new customer relationships by delivering value in new ways.
Slide 2.53
The value chain model

A value chain is a set of activities that a firm operating in a specific industry
performs in order to deliver a valuable product or for the market. The
concept comes from business management and was first described and
popularized by Michael Porter.
Slide 2.54
The value chain Analysis

Primary Activities
• Inbound Logistics: arranging the inbound movement of materials,
parts, and/or finished inventory from suppliers to manufacturing or
assembly plants, warehouses, or retail stores.
• Operations: concerned with managing the process that converts inputs (in the
forms of raw materials, labor, and energy) into outputs (in the form of goods
and/or services)
• Marketing and Sales: selling a product or service and processes for creating,
communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.
• Outbound Logistics: is the process related to the storage and movement of the
final product and the related information flows from the end of the production line
to the end user. Dell use to sell directly to there customer (home based, small
and large enterprise)
• Service: includes all the activities required to keep the product/service working
effectively for the buyer after it is sold and delivered.
Slide 2.55
The value chain Analysis

Secondary Activities
• Technological Development: pertains to the equipment,

hardware, software, procedures and technical knowledge
brought to bear in the firm's transformation of inputs into
outputs.
• Human Resources Management: consists of all activities involved in

recruiting, hiring, training, developing, compensating and (if necessary)
dismissing or laying off personnel.
• Infrastructure: consists of activities such as accounting, legal, finance,

control, public relations, quality assurance and general (strategic)
management. In simple its a general administration.
Slide 2.56
Applying computer-based information

systems for competitive advantage

Chap 2 - Intro To Info Sys

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Slide 2.

• After this lecture, you will be able to:

• From a managerial perspective, this chapter

• Systems theory provides a powerful means of

A set of objects or entities that interrelate with one

ZCAS ZCAS ZCAS

Box of stones is not a system.

What is the difference?

Wholeness and Interdependence

The whole is more than the sum of its

The parts are interdependent.

Labor Strike: If ZCAS Staff go on strike. Everyone

• The components of a system work towards a

System characteristics (Continued)

• Systems do not operate in complete isolation. They are

System characteristics (Continued)

• Systems can be complex and can be made up of other, smaller

System characteristics (Continued)

• An organisation will interact with all these elements that are

System Family Structure

• Structure- The organized pattern in which family

Other Characteristics of Systems

Self-Regulation & Control

Activities controlled by aims/goals

A family’s aim/goal is to function as a family.

Members of family take on

Other Characteristics of Systems

Interchange with Environment

Input from environment.

Output into environment.

System and Environment Affect Each Other

Other Characteristics of Systems

Mothers nag children to behave.

Couples with problems try to work them out.

Gravity in the solar system.

Other Characteristics of Systems

Change and Adaptability

System must adapt to survive in a

Other Characteristics of Systems

Goal may be achieved in various ways

Family structures are different – 2 parents, 1 parent, blended

Families interact differently from family to family.

A generic model of a system

A generic open-loop system

A generic closed-loop feedback control system

A generic closed-loop feedforward control

• The degree of coupling defines how closely linked

• Systems or subsystems that are highly dependent

Resources that support BIS

1. People resources: People resources include the users of an

Activity 2.1 – Example of information

• What information systems might be found in

• For each system identified, list the people,

Business Information Systems

Business Information Systems is a boundary-spanning

The Role of Information Systems in

TRANSACTION PROCESSING SYSTEM

A transaction process system (TPS) is an information

Characteristics of a TPS include performance,

TPS is also known as transaction processing or real-

TRANSACTION PROCESSING SYSTEM

Office Automation Systems