Introduction (IS 31231 /PST 31226) by Dr. UA Piumi Ishanka Dept. of Computing and Information Systems ishankauap@appsc.sab.ac.lk Learning Objectives • To explain how IT impacts organizations. • To recognize that IT professionals need to understand how an organization operates in order to effectively apply technology to make the organization more efficient and competitive. • To identify how the benefits of using IS may be measured and assessed, and contrast with existing practice. 2 Information Information in the company • organizations are continuously capturing data, many of which are of no significance to them at all – from formal sources or through informal channels • what they know as information – enable them to make more accurate decisions • the right amount of information at the right time is a key factor for every organization 3 Information Transformation of data into information Data Information Transformation Process • Data are facts obtained through reading, observation, calculation, measurement, etc. • Information is a set of data transformed to reduce future uncertainty and contributes to the decision-making process Information Decision-making process Decision Action 4 Information information costs in the company – The information content required – How urgently the information is needed – The amount of information needed – How accessible the information is 5 Characteristics of information Relevance – Relevance is a decisive quality – increases knowledge and reduces uncertainty surrounding the problem under consideration – Reports and messages frequently contain irrelevant sections that lead to difficulties and cause frustration 6 Characteristics of information Accuracy – information must be sufficiently accurate for managers’ – the degree of accuracy should be coherent with the importance of the decision to be taken – will vary according to the decision-maker’s level in the hierarchy 7 Characteristics of information Completeness – Information is considered to be completed if it informs us on the key points of the problem we are analyzing 8 Characteristics of information Source trustworthiness – trust in the information source increases when it has a proven track record To increase the trustworthiness of the message, managers use reports from various sources, 9 Characteristics of information Communication with the right person – Information providers must be aware of information needs in order to ensure it goes straight to where it is required 10 Characteristics of information Punctuality – information is that which is delivered just when it is needed. – vital information for the company may become worthless if it takes too long to obtain 11 Characteristics of information Detail –Information should contain the minimum number of details for effective decision making – particularly as lower levels, information must necessarily contain a lot of detail if it is to be useful, although the general rule of minimum possible detail for coherence with efficient information use should be followed. 12 Information needs – human capacity is limited, and we can absorb only a tiny amount of all this information – Information needs refer to the information required to take decisions correctly and to carry out the tasks deriving from them 13 Sources of information – internal information relating to the environment within the company, and information about its external environment – Customers: marketing, sales, levels of satisfaction. – Distributors: marketing and logistics (distribution). – Competitors: market penetration, innovations, product quality. – Suppliers: transaction conditions. – Trade unions: salaries and employment stability. – Shareholders: company performance. – Financial institutions: financial conditions and investment opportunities. – Government: legal and political developments 14 What is a System? – A system is a group of interrelated components working together toward a common goal by accepting inputs and producing outputs in an organized transformation process. System will have the following basic interacting components (functions): • Input • Processing • Output • Feedback • Control 15 What is a System? – Many processes, whether or not they have a significant IS component, can be viewed as systems: • Personnel management • University admissions • Production and inventory management • Criminal justice system 16 What is a System? Inputs: raw data • May be physical, electronic or conceptual • May use a manual or automated process Processing: conversion of inputs to outputs • May be comprised of computations, data storage, choosing alternatives • May be a manual or automated process Outputs: information used to make decisions • May be delivered in paper form or electronically • Outputs of one system may be inputs to another system Feedback/assessment: outputs used to improve system performance • Can flag for incorrect processing • Cue for managerial interventions • Supply estimates of future input values (forecasting) 17 Example: Sales Force Automation System (SFAS) Suppose you are a regional manager who supervises 100 salespersons in Badulla. Your company’s headquarters are located in Colombo. Your performance is daily evaluated by the headquarters. You are compared with managers in other regions such as Kurunegala, Kandy etc. Your company publishes various books: encyclopedia, children’s books, etc. In short, the headquarters are not interested in each salesperson’s performance. All they care about is your performance, i.e. the regional sales results. In order to save your job, you have to keep increasing sales. You have to motivate, encourage, help, and discipline salespeople in Badulla, if they perform, your job is secured. If they don’t perform, you will be fired. 18 Example: Sales Force Automation System (SFAS) Case 1 Each morning, you are supposed to submit a daily report to the headquarters. In the report, you should include the total sales made in Badulla yesterday, and sub-total of each category (encyclopedia, children’s books, etc.). • At the end of each day, a salesperson submits his sales record to the Badulla regional office. • The record is added to compute the total sales, and also summarized in terms of book category. • The total sales, and sub-total sales in terms of book category, are presented in the daily report. • Here, the daily record submission indicates “INPUT” in a system. • Adding and summarizing indicates “PROCESSING” in a system. • Reporting indicates “OUTPUT” in a system. 19 Example: Sales Force Automation System (SFAS) Case 2 • In order to increase sales, you decided to implement a kind of performance evaluation program, which is intended to motivate and discipline the salespersons under your supervision. • According to the program, if a salesperson makes daily sales greater than one million, he will be awarded a gift certificate. On the other hand, if a salesperson makes daily sales less than one hundred thousand rupees, he will be given a warning. If he makes a sale less than one hundred thousand rupees two days in a row, a more serious warning letter will be sent to him. If he makes sales less than one hundred thousand rupees three days in a row, he will be fired. • If you manually check all the sales records to comply with the new performance evaluation program, most of your time will be occupied by processing the data and paperwork. • In other words, you will have no time to do anything else: reading a new book, learning new things, or playing golf, etc. • In contrast, if you develop an information system that can carry out the performance evaluation program, your life will be much easier. The program is now automated with a computer-based information system. 20 Q/A 21
