Chapter 2
Information Technologies
Concepts and Management
Case: Building an e-Business at Fed Ex
Problem
 FedEx has kept looking ahead at every stage for opportunities to
meet customers’ needs for fast, reliable, and affordable overnight
deliveries.
Solution
 In addition to e-Shipping Tools, FedEx is now providing
integrated solutions to address the selling & supply chain needs
of its customers.
Results
 FedEx’s e-business model facilitates better communication and
collaboration between the various parties along the supply chains.
 It promotes efficiency gains by reducing costs & speeding up the
order cycle.
 It transforms organizations into high performance e-businesses.
Characteristics of Information Systems
 Several different information systems can exist in one
organization.
 A particular information system may be composed of several
separate information systems.
 Information systems are connected by means of electronic
networks.
 Interorganizational information systems involve information
flow in two or more organizations.
 An enterprisewide system or interorganizational information
system is composed of large & small computers & hardware
connected by different types of networks.
IS: Concepts &Definitions
Source:Steven Alter, Information Systems: A
Management Perspective, 3rd, Addison- Wesley
Data, Information & Knowledge
One of the primary goals of Information Systems
is to economically process data into information
or knowledge.
 Data
 elementary description of things, events, activities, and
transactions that are recorded, classified, and stored, but not
organized to convey any specific meaning.
 Information
 data that have been organized so that they have meaning and
value to the recipient.
 Knowledge
 information that have been organized and processed to convey
understanding, experience, accumulated learning, and
expertise
Classification of IS
Organizational structure
Functional area
Support provided
System architecture
 Information Architecture & Information
Infrastructure
Activity supported
Organizational Structure
Department information systems
Enterprise information systems
 While a departmental IS is usually related to a functional area, the
collection of all departmental applications when combined with other
functions’ applications comprises the enterprisewide information system
Inter-organizational systems (IOS)
 Benefits
 結合採購商、供應商、合作夥伴，並重新設計主要商業流程，以提高
生產力、品質、速度、彈性之功效
 創新新的配銷管道，提供新的以資訊為基礎的產品和服務
 提高進出市場的障礙，移轉了產業內的競爭勢態
 Types
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連接購買和供應商的行銷IOS或後勤IOS
產業內的平台(industry platform)
虛擬系統(virtual systems)
電子市場(electronic market)
IS - Classification By Function (Department)
An information system (IS) support each
department in a corporation.
Operations
Accounting
Finance
Marketing
Human resources
Point-of-Sale (POS)
Transaction Processing Systems (TPS): Automates
routine and repetitive tasks that are critical to the
operation of the organization
IS - Classification By Function (Department)
An information system (IS) support each
department in a corporation.
Business processes and functional areas of business
[Source:Steven Alter, Information Systems: A
Management Perspective, 3rd, Addison- Wesley ]
Evolution of Support Systems
Early 1950s Transaction processing system (TPS)
1960s
Management information systems (MISs)
Late 1960s
Office automation system (OAS)
Early 1970s Decision support system (DSS)
Early 1980s Executive information systems
Enterprise information systems (EISs)
Group support systems (GSSs)
Mid- 1980s
Expert systems (ES)
Knowledge management systems (KMS)
1990s
Artificial neural networks (ANNs)
IS - Classification By Support Function
Senior Mgr
Executive Support System
•5-year sales trend
•Profit Planning
•5-year budget forecasting
•Product development
Management Information System
Decision Support System
Middle Managers
Intelligent Support Systems
Knowledge Management System
Office Automation System
Transaction Processing System
Data Workers
Operational Managers
•Sales Management
•Inventory Control
•Annual budget
•Production Scheduling
•Cost Analysis
•Pricing Analysis
•Simulation
•Pgm coding
•System support
•Word Processing
•Desktop Publishing
•Order Processing
•Fulfillment
•Material Movement
•A/R, A/P, GL
•Payroll
•POS
Main types of IT supported systems (Table 2.1)
System
Employees supported
OAS, Word processing system,
DMS, Desktop publishing system
CAD/CAM
Officer workers
TPS, MIS, Communication &
collaboration systems
All employees
GSS
People working in groups
DSS, Business Intelligence(BI)
EIS
Decision makers, managers
Executives, top managers
ES
Knowledge workers, nonexperts
Knowledge workers, professionals
Knowledge workers, managers
Mobile employees
Neural Networks, case-based reasoning
Data Warehouse
Mobile computing systems
Engineers, draftsmen
Transaction Processing System (TPS)
 Supports the monitoring, collection, storage, processing,
and dissemination of the organization’s basic business
transactions
 Automates routine and repetitive tasks that are critical to
the operation of the organization, such as preparing a
payroll, billing customers, POS and Warehouse
operations
 Data collected from this operation supports the MIS and
DSS systems employed by Middle Management
 Computerizes the primary and most of the secondary
activities on the Value Chain.
 Primary purpose to perform transactions and collect data.
TPS (transaction processing system)
[Source:Steven Alter, Information Systems: A
Management Perspective, 3rd, Addison- Wesley ]
Management Information Systems (MIS)
Purposes
 access, organize, summarize, and displayed information for
supporting routine decision making in the functional areas
 Decisions supported are more structured
 Primary purpose - process data into information
 characterized mainly by their ability to produce periodic reports
range from the repetitive to ad hoc
Topics: operational efficiency, effectiveness, and productivity
Examples: a daily list of employees and the hours they work, or a
monthly report of expenses as compared to a budget
Others
 Used for planning, monitoring, and control
 in Replenishment, Pricing Analysis (Markdowns) and Sales
Management
 constructed in whole or in part by end-users
 geared toward middle managers
Functional MISs
Sales forecast by region generated by marketing MIS.
DSS & ISS
 Decision Support Systems (DSS) - support complex non-routine decisions
 Typically employed by tactical level management whose decisions and whatif analysis are less structured
 present the results + expand the information with alternatives
 Some DSS methodologies
 Mathematical Modeling, Simulation, Queries, What-If (OLAP-Cubes) & Data mining
 Intelligent Support Systems (ISS)
 Artificial intelligence (AI) these systems perform intelligent problem solving
 Expert systems (ESs) - One application of AI
 provide the stored knowledge of experts to nonexperts, so the latter can solve
difficult or time-consuming problems
 The difference
 DSS => users make their decisions according to the information generated
from the systems
 ES => the system makes recommended decisions for the users based on the
built-in expertise and knowledge
Executive Support Systems (ESS)
 ESS systems or Enterprise Information Systems (EIS)
 originally implemented to support Senior management
 These systems have been expanded to support other managers within
the enterprise.
 At the senior management level they support Strategic activities
which deal with situations that significantly may change the manner
in which business is done.
Office Automation Systems (OAS)
OAS
 Two aspects
 Electronic communication
 word processing systems, document management systems and
desktop publishing systems.
 predominantly used by clerical workers who support
managers at all levels
 data workers
 Among clerical workers, those who use, manipulate,
or disseminate information
Knowledge Management Systems (KMS)
KM
 Supported for professional people
 An additional level of staff support now exists between top and
middle management
 Example: financial and marketing analysts
act as advisors and assistants to both top and middle management
responsible for finding or developing new knowledge (External
Content) for the organization and integrating it with existing
knowledge (Internal Content)
 support these knowledge workers range from Internet
search engines and expert systems, to Web-based
computer-aided design and sophisticated data management
systems
Interrelated supported systems
Operational, Managerial & Strategic Systems
 Classification by the activity supported
 Operational systems - Day-to-day operations of an organization
 Managerial(tactical) systems - Middle-management activities
such as short-term planning, organizing, and control
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Statistical summaries
Exception reports
Periodic and ad hoc reports
Comparative analysis
Projections
Early detection of problem
Routine decisions
Connections
 Strategic systems - Decisions that significantly change the manner
in which business is being done
 Long-range planning
 Strategic response systems & Innovative strategic systems
New Strategic Systems
 Electronic commerce (EC) has become a new way of
conducting business in the last decade or so.
In this new model, business transactions take place
via telecommunications networks, primarily the
Internet.
e-Commerce provides organizations with
innovative and strategic advantages, such as;
 Increased market share
 Better ability to negotiate with suppliers
 Better ability to prevent competitors from entering into
their territory
Relationship Between People & IS
 Knowledge workers- Create information and knowledge
 Data workers - Use, manipulate, or disseminate information
IS related to Mintzberg’s management roles
[Source:Steven Alter, Information Systems: A
Management Perspective, 3rd, Addison- Wesley ]
Supply Chain
A supply chain is a concept describing the flow of
materials, information, money, and services from raw
material suppliers through factories and warehouses
to the end customers
Components of the Supply Chain
 Upstream supply chain
 includes the organization’s first-tier suppliers and their suppliers
 Internal supply chain
 includes all the processes used by an organization in transforming
the inputs of the suppliers to outputs
 Downstream supply chain
 includes all the processes involved in delivering the products to
final customers
Components of the Supply Chain
A supply chain for a manufacture
Inter-Organizational Systems (IOS)
IOS - systems that connect two or more organizations
 These systems are common among business partners and
play a major role in EC, as well as in SCM support
 EDI (electronic data interchange)
 developed in the 1980s
 Web-based systems (many using XML)
 deliver business applications via the Internet
 Using browsers and the Internet, people in different organizations
communicate, collaborate, access vast amounts of information,
and run most of the organization’s tasks and processes
Electronic Data Interchange (EDI)
Overview
 to improve communications with business partners
 involved computer-to-computer direct communication of
standard business documents (ex. purchase orders, bills, and
order confirmations) between business partners
In the past
 run on expensive value-added networks (VANs)
 These are private, data-only wide area networks used by multiple
organization to provide high capacity, security, and economies in the
cost of network service.
 The cost of VANS limited EDI to large business partners
Now - the emergence of Internet-based EDI
Information Infrastructure &
Information Architecture
Infrastructure
 consists of the physical facilities, services, and
management that support all computing resources in an
organization.
IT Architecture
 is a high-level map or plan of the information
requirements of the organization in an organization
New architectures
 Client/server
 Enterprisewide computing
 Intranets
 Internet
 Extranets
Information Infrastructure
Information Systems
Function
Architecture of an online travel agency
Two or more organizations
Information architecture model
Information Architecture
a conceptual framework for the organizational IT infrastructure
 It is a plan for the structure and integration of the information resources in
the organization.
Information Architecture
– Classified by HW
Classified by computing paradigms, which are the core
of the architecture
 Mainframe Environment - Centralized computing environment
 Powerful storage and computational capabilities
 NC (Network computers)
 PC Environment
 PC-LAN Environment
 Standalone PC =>Small- to medium-size (SME) organizations
 Distributed computing - Distributed processing divides the
processing work between two or more computers
 Cooperative processing
 Client/server architecture
 Enterprisewide computing
 Legacy systems
 Peer-to-peer (P2P) architecture – file sharing
Client/Server Architecture
A client/server architecture divides networked
computing units into 2 major categories
 A client is a computer such as a PC or a workstation
attached to a network, which is used to access shared
network resources.
 A server is a machine that is attached to this same network
and provides clients with these services.
The purpose of client/server architecture is to
maximize the use of computer resources.
Client/server architecture gives a company as many
access points to data as there are PCs on the network.
Web-based Systems
Web-based systems
 refer to those applications or services that are resident on a
server that is accessible from anywhere via the WWW.
The only client-side software needed to access and execute
Web-based applications is a Web browser environment.
2 important features of Web-based functionality
 The generated content/ data is updated in real time.
 They are universally accessible via the Web to users (dependent on
defined user-access rights).
The Internet
Intranets
Extranets
Corporate Portals
E-commerce Systems
Electronic Storefronts
Electronic Markets
Electronic Exchanges
M-Commerce
Enterprise Web
The Internet & Intranet
 The Internet - Sometimes called simply “the Net,”
 A worldwide system of computer networks—a network of networks
 The Internet uses a portion of the total resources of the currently
existing public telecommunication networks
 its use of a set of protocols called TCP/IP
 Intranet - typically a complete LAN, or several intra-connected LANs
 the use of Web technologies to create a private network, usually within
one enterprise
 used for
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work-group activities
the distributed sharing of projects within the enterprise
Controlled access to company financial documents
use of knowledge management, research materials, online training, and
other information that requires distribution within the enterprise
Extranets & Corporate Portals
 Extranets
 Connect several intranets via the Internet, by adding a security
mechanism and some additional functionalities
 form a larger virtual network that allows remote users (such as business
partners or mobile employees) to securely connect over the Internet to
the enterprise’s main intranet
 also employed by two or more enterprises (suppliers & buyers) to share
information in a controlled fashion
=> play a major role in the development of B2B EC and Supply Chain systems
 Corporate portals
 Web sites that provide the gateway to corporate information from a
single point of access
 also used to personalize information for individual customers and for
employees
 Intranets and Extranets are usually combined with and accessed via a
corporate portal
EC Systems
 Web-based systems that enable business transactions to be
conducted seamlessly 24 hours a day, 7 days a week
 Some classifications of EC systems
 B2C (Business to Consumer)
 B2B (Business to Business)
 B2E (Business to Employee)
 The major components of Web-based EC
 Electronic storefronts - Web-equivalents of a physical store
 Common features and functions
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an E-catalog
a shopping cart
a checkout mechanism
a payment processing feature
a back office order fulfillment system
 Electronic markets
 Mobile commerce
Electronic Markets
Electronic markets
a web-based network of interactions and relationships
over which information, products, services, and
payments are exchanged
The principal participants in marketplaces
 transaction handlers, buyers, brokers, and sellers
Private marketplaces
 markets can reside in one company, where there is
either one seller and many buyers, or one buyer and
many sellers
Electronic Exchanges
Electronic exchanges - A special form of electronic markets
 Web-based public marketplaces where many buyers and many
sellers interact dynamically
 Originally set as trading places for commodities, electronic
exchanges have emerged for all kinds of products and
services
 The classification
 Vertical exchanges
 position themselves as the hub for all buying, selling, and related
services in a single market category
 Horizontal exchanges
focus on a specific function or need applicable to many different
industries
Mobile-Commerce
Mobile commerce or M-commerce
 the buying and selling of goods and services through wireless
handheld devices such as cellular telephone and personal digital
assistants
 Known as “next-generation EC,” m-commerce enables users to
access the Internet without a place to plug in to
 Wireless Application Protocol (WAP) is the emerging
technology behind m-commerce
 Using Bluetooth technology, WAP-enabled smart phones offer fax,
e-mail, and phone capabilities all in one.
 As this wireless environment expands, a pervasive
computing environment will develop, employed by
mobile employees and others, will change the way
business is transacted.
Enterprise Web
 Is an open environment for managing and delivering Web
applications. It combines services from different vendors in
a technology layer that spans rival platforms and business
systems, creating a foundation for building applications at a
lower cost.
 Applications, including business integration, collaboration,
content management, identity management, and search,
which work together via integrating technologies.
 The result is an environment that spans the entire enterprise.
Emerging Computing Environments(I)
 Utility Computing
 computing that is as available, reliable, and secure as electricity,
water services, and telephony
 to have computing resources flow like electricity on demand
from virtual utilities around the globe—always on and highly
available, secure, efficiently metered, priced on a pay-as-youuse basis, dynamically scaled, self-healing, and easy to manage
 Subscription Computing - a form of utility computing
 that puts the pieces of a computing platform together as services,
rather than as a collection of separately purchased components
 Pervasive Computing
 a future in which computation becomes part of the environment.
Computation will be embedded in things, not in computers
Emerging Computing Environments(II)
 Grid Computing
 employs networked systems to harness the unused processing
cycles of all computers in that given network thus creating
powerful computing capabilities
 already in limited use
 Example: project SETI (Search for Extraterrestrial Intelligence)
@Home project
PC users worldwide donate unused processor cycles to help the
search for signs of extraterrestrial life by analyzing signals coming
from outer space
 Web services
 self-contained, self-describing business and consumer modular
applications, delivered via the Internet, that users can select and
combine through almost any device, ranging from PC to mobile
phones
Managing Information Resources
 The responsibility for the management of information
resources is divided between two organizational entities
 The information systems department (ISD) - a corporate entity.
 The end-users - who are scattered throughout the organization.
 This division of responsibility raises important questions:
 Which resources are managed by whom?
 HW/SW, Databases, Networks, Procedures, Security, Physical buildings
 the size/ nature of the organization, the amount/ type of IT resources
 The ISD is responsible for corporate-level and shared resources, while the
end users are responsible for departmental resources.
 What is the role of the Information Systems Department (ISD)?
 Managing relationships with end users
 Managerial issues
 Transition to networked computing, From legacy systems to
client/server systems, How much infrastructure?
Role of the IS Department
What is the Role of the ISD?
 The role of the ISD is changing from purely technical to
more managerial and strategic.
 As a result, the position of the ISD within the
organization tends to be elevated from a unit reporting to
a functional department, to a unit reporting to a senior
vice president of administration or to the CEO.
 The role of the director of the ISD is changing from a
technical manager to a senior executive.
 The ISD can be centralized or decentralized or a
combination of the two.
 The ISD must work closely with external organizations
such as vendors, business partners, etc.