MIS – Lecture-3

N P Singh
Agenda

 Contemporary Approaches to Information

Systems
 Business Processes
 Type of Business information Systems
Contemporary Approaches to
Information Systems
 The study of information systems is a
multidisciplinary field.
 No single theory or perspective dominates IS.
 The IS field can be divided into technical and
behavioral approaches.
 Information systems are sociotechnical systems.
 Though they are composed of machines, devices,
and “hard” physical technology, they require
substantial social, organizational, and intellectual
investments to make them work properly
Major disciplines that contribute problems, issues,
and solutions in the study of information systems.
Technical Approach
 The technical approach to information systems emphasizes
mathematically based models to study information systems, as
well as the physical technology and formal capabilities of these
systems.
 The disciplines that contribute to the technical approach are
computer science, management science, and operations
research.
 Computer science is concerned with establishing theories of
computability, methods of computation, and methods of
efficient data storage and access.
 Management science emphasizes the development of models
for decision making and management practices.
 Operations research focuses on mathematical techniques for
optimizing selected parameters of organizations, such as
transportation, inventory control, and transaction costs.
 Behavioral Approach
 Behavioral issues are in the development and long-term maintenance
of information systems.
 Issues such as strategic business integration, design, implementation,
utilization, and management cannot be explored usefully with the
models used in the technical approach.
 Behavioral disciplines contribute important concepts and methods.
 Sociologists study information systems with an eye toward how
 groups and organizations shape the development of systems and also
how systems affect individuals, groups, and organizations.
 Psychologists study information systems with an interest in how
human decision makers perceive and use formal information.
 Economists study information systems with an interest in
understanding the production of digital goods, the dynamics of digital
markets, and how new information systems change the control and
cost structures within the firm.
Economics and Information Systems

 Economists study the impact of information

systems on the economy. This means finding
out how information systems impact
standard metrics of economics such as
productivity, employment, job security,
profitability, GDP, income and a host of other
measurements of economic performance and
activity.
Cost Reduction
Cost Reduction
Cost Reduction
Behavioral Approach

 The behavioral approach does not ignore

technology. Indeed, information systems
technology is often the stimulus for a
behavioral problem or issue.
 But the focus of this approach is generally not
on technical solutions. Instead, it
 concentrates on changes in attitudes,
management and organizational policy,
 and behavior.
 Categories ol Behavioral Research in
Information Systems
 Individuals
 Key Issues: Understand human behavior
▪ Broad Concerns: Similarities ,Differences, Attitudes, Values, Learning, Problem Solving,
Removing Road blocks.
 Peers
 Key Issues: Communication between people & Methods of
influencing behavior.
▪ Broad Concerns: Pressure, Coercion, Manipulation, Collaboration
 Small Groups
 Key Issues: Group Dynamics and decision making
▪ Broad Concerns : Networks message’s Content, Group Processes
 Large Groups
 Key Issues: Promoting the organi2ation
▪ Broad Concerns: Interdependence ,Structure, Process, Technology
Environment
A sociotechnical perspective on
information systems
Examples

 The examples are related to analyzing

financial reporting and inventory
management problems, using …………………
software to improve management decision
making about increasing sales, and using
Internet software for developing shipping
budgets.
 Caselet-1
 XYZ Smart of Delhi, which sells more than 78 million bags of
pretzels, snack chips, and organic snack items each year. Its financial
department use spreadsheets and manual processes for much of its
data gathering and reporting.
 XYZ’s financial analyst would spend the entire final week of every
month collecting spreadsheets from the heads of more than 50
departments worldwide.
 She would then consolidate and re-enter all the data into another
spreadsheet, which would serve as the company’s monthly profit-
and-loss statement.
 If a department needed to update its data after submitting the
spreadsheet to the main office, the analyst had to return the original
spreadsheet and wait for the department to re-submit its data
before finally submitting the updated data in the consolidated
Caselet-2
 Dollar General Corporation operates deep discount stores offering
housewares, cleaning supplies, clothing, health and beauty aids, and
packaged food, with most items selling for $1.
 Its business model calls for keeping costs as low as possible.
 Although the company uses information systems (such as a point-of-sale
system to track sales at the register), it deploys them very sparingly to keep
expenditures to the minimum.
 The company has no automated method for keeping track of inventory at
each store.
 Managers know approximately how many cases of a particular product the
store is supposed to receive when a delivery truck arrives, but the stores lack
technology for scanning the cases or verifying the item count inside the
cases.
 Merchandise losses from theft or other mishaps have been rising and now
represent over 3 percent of total sales.
 What decisions have to be made before investing in an information
 Business Processes
 Business processes refer to the manner in which work
is organized, coordinated, and focused to produce a
valuable product or service.
 Business processes are collection of activities required
to produce a product or service.
 These activities are supported by flows of material,
information, and knowledge among the participants
in business processes.
 Design and coordination of business processes re key
to the success of the firm.
 Business processes can be a source of competitive
advantage or may be a liability
What are the Key business processes?
How are they related to IS?
 Cross-functional Processes
 Many business processes are cross-functional,
transcending the boundaries between sales, marketing,
manufacturing, and research and development.
 These cross-functional processes cut across the traditional
organizational structure, grouping employees from
different functional specialties to complete a piece of
work.
 For example, the order fulfillment process at many
companies requires cooperation among the sales function
(receiving the order, entering the order), the accounting
function (credit checking and billing for the order), and the
manufacturing function (assembling and shipping the
Example: Order Fulfilment Process
Continued…

 How could information systems be used to

support the order fulfillment process?
 What are the most important pieces of
information these systems should capture?
 Explain your answer.
Traditional Overview of Enterprise
System
Present view of enterprise systems
 Example – Caselet-3
 ABC Hardware is a small family business in Noida.
 The owners must use every square foot of store space as profitably as
possible.
 ABC have never kept detailed inventory or sales records. As soon as a
shipment of goods arrives, the items are immediately placed on store
shelves.
 Invoices from suppliers are only kept for tax purposes.
 When an item is sold, the item number and price are rung up at the
cash register.
 The owners use their own judgment in identifying items that need to
be reordered.
 What is the business impact of this situation?
 How could information systems help the owners run their business?
 What data should these systems capture?
 What decisions could the systems improve?
 Continued….
 Analyze opportunities to improve business processes with new
information system applications, using a …………….. to improve
decision making about suppliers, and using ……………………..to
plan efficient transportation routes.
 Note: Owner can afford internet connectivity and can invest
maximum INR 5000-8000 for application software which is
 quite robust,
 can be used with little or no training, c
 capable of storing small business data,
 have inbuilt functions for the purpose of data analysis,
 can generating reports in the form of row and columns,
 can prepare graphical report as well, such as dashboard etc. for decision
making,
 and can simulate and prepare balance sheet, profit and loss accounts etc. .
 Caselet-4
 OM- Shiva is one of the oldest retail lumberyards in Ghaziabad.
 It features a large selection of materials for flooring, decks, moldings,
windows, siding, and roofing.
 The prices of lumber (timber) and other building materials are constantly
changing.
 When a customer inquires about the price on pre-finished wood flooring,
sales representatives consult a manual price sheet and then call the supplier
for the most recent price.
 The supplier in turn uses a manual price sheet, which has been updated each
day.
 Often the supplier must call back OM-Shiva’s sales reps because the company
does not have the newest pricing information immediately on hand.
 Assess the business impact of this situation, describe how this process could
be improved with information technology, and identify the decisions that
would have to be made to implement a solution.
 Who would make those decisions?
 Continued….
 Analyze opportunities to improve business processes with new
information system applications, using a …………….. to improve
decision making about suppliers, and using ……………………..to plan
efficient transportation routes.
 Note: Owner can afford internet connectivity and can invest
maximum INR 5000-8000 for application software which is
 quite robust,
 can be used with little or no training, c
 capable of storing small business data,
 have inbuilt functions for the purpose of data analysis,
 can generating reports in the form of row and columns,
 can prepare graphical report as well, such as dashboard etc. for decision
making,
 Can filter data on various parameters
 Type of Business information
Systems -1
 Transaction Processing Information Systems
 Payroll TPS
 Business Intelligence Information Systems.
 Business Intelligence systems help middle management
in monitoring, controlling, decision making and
administrative activities.
 Management Information systems
 Used by Middle level management
 Provides report on the firm’s current performance which
is used to monitor and control the business and predict
future performance or activities.
How MIS obtain their data from the
organization’s TPS?
 Type of Business information
Systems -2
 Decision Support Systems
 DSS focusses on problems that are unique & rapidly changing,
procedure for getting a solution are not fully predefined.
 Questions to be answered
 What will the impact of production schedules if firms were to
double sales in a given month?
 What would happen to return on investment if factory
schedules were delayed for six months.
 Data Used.
 DSS uses internal data. TPS and MIS bring in data from
external sources about competitors and markets.
Type of Business information
Systems -3
 Executive information systems
 Used and developed for senior management
 Addresses non-routine decisions requiring
judgement, evaluation, and insight because there
is no well defined procedure to arrive at solution.
 It represent graphs and data from many sources
Internal as well as external).
 Digital Dash Board is an example of EIS
Information Systems for linking the
Enterprise-4
 Enterprise Applications
 Enterprise Resource Planning (ERP)
 Customer Relation Management (CRM)
 Supply Chain Management (SCM)
 Knowledge Management Systems (KMS)
Intranets & Extranets-5

 Intranets
 Internal company websites that are accessible to
employees.
 It uses the same technology as used by Internet
(which is a public network linking organizations).
 Extranets
 Company websites that are accessible to
authorized vendors and suppliers and often used
to coordinate movement of supplies to the
production facility.
E-business, E-commerce and E-
Government
 The systems and technologies are transforming firms’
relationships with customers, employees, suppliers, and logistic
partners into digital relationships using networks and the
Internet.
 Businesses are enabled by or based upon digital networks that
we use the terms “electronic business” and “electronic
commerce”.
 Electronic business, or e-business, refers to the use of digital
technology and the Internet to execute the major business
processes in the enterprise.
 E-business includes activities for the internal management of
the firm and for coordination with suppliers and other business
partners. It also includes electronic commerce, or e-commerce.
E-business, E-commerce and E-
Government
 E-commerce is the part of e-business that deals with the buying and
selling of goods and services over the Internet.
 It also encompasses activities supporting those market transactions,
such as advertising, marketing, customer support, security, delivery,
and payment.
 The technologies associated with e-business have also brought
about similar changes in the public sector. Governments on all levels
are using Internet technology to deliver information and services to
citizens, employees, and businesses with which they work.
 E-government refers to the application of the Internet and
networking technologies to digitally enable government and public
sector agencies’ relationships with citizens, businesses, and other
arms of government.
 Difference between E-Commerce & E-
Business
S.N E-COMMERCE E-BUSINESS
E-Commerce refers to the E-Business refers to performing
01. performing online commercial all type of business activities
activities, transactions over through internet.
internet.
E-Commerce is a narrow concept E-Business is a broad concept
02. and it is considered as a subset of and it is considered as a
E-Business. superset of E-Commerce.

Commercial transactions are Business transactions are

03. carried out in e-commerce. carried out in e-business.

04. In e-commerce transactions are In e-business transactions are

limited. not limited.
 Difference between E-Commerce & E-
Business
It includes activities like
buying and selling product,
05. making monetary
transactions etc. over
internet.
06. It usually requires the use
of only a website.
It involves mandatory use
07. of internet.
E-commerce is more
08. appropriate in (B2C)..
09. E-Comm. covers
outward/external BPs.
Includes procurement of raw
materials/goods, customer education,
supply activities, buying and selling
product, making monetary
transactions etc. over internet.
It requires the use of multiple
websites, CRMs, ERPs that connect
different business processes (BPs).
It involves the use of internet, intranet
or extranet.
E-business is more appropriate in
Business to Business (B2B) context.
E-Business covers internal as well as
external business process/activities.
Content of three lectures as per the
syllabus for first three lectures
 The Role, Perspectives and Types of Information Systems
 The Role of Information Systems in Business Today --
Globalization Challenges and Opportunities: A Flattened
World --The Emerging Digital Firm --Strategic Business
Objectives of Information Systems --Perspectives on
Information Systems and Information Technology --
Dimensions of Information Systems --A Business
Perspective on Information Systems --Organizational
Capital and the Right Business Model --Contemporary
Approaches to Information Systems --Business Processes
and Information Systems --Types of Business Information
Systems