QN
QN
QN
. Information systems capture data from the organization (internal data) and its environment (external
data).
. When specific information is needed, the appropriate data items are manipulated as necessary, and
the user receives the resulting information.
. Depending on the type of information system, the information output may take the form a query
response, decision outcome, expert-system advice, transaction document, or a report.
1. Organizations
Information systems are an integral part of organizations. Indeed, for some companies, such as credit
reporting firms, there would be no without business an information system. The key elements of an
organization are its people, structure, business processes, politics, and culture.
2. Management
Management’s job is to make sense out of the many situations faced by organizations, make decisions,
and formulate action plans to solve organizational problems. Managers perceive business challenges in
the environment, they set the organizational strategy for responding to those challenges, and they
allocate the human and financial resources to coordinate the work and achieve success. Throughout,
they must exercise responsible leadership. The business information systems described in this book
reflect the hopes, dreams, and realities of real-world managers.
But managers must do more than manage what already exists. They must also create new products and
services and even re-create the organization from time to time. A substantial part of management
responsibility is creative work driven by new knowledge and information. Information technology can
play a powerful role in helping managers design and deliver new products and services and redirecting
and redesigning their organizations.
3. Information Technology
Information technology is one of many tools managers use to cope with change. Computer hardware is
the physical equipment used for input, processing, and output activities in an information system. It
consists of the following: computers of various sizes and shapes (including mobile handheld devices);
various input, output, and storage devices; and telecommunications devices that link computers
together.
Computer software consists of the detailed, preprogrammed instructions that control and coordinate
the computer hardware components in an information system.
A financial information system (FIS) accumulates and analyzes financial data used for optimal financial
planning and forecasting decisions and outcomes. An FIS is used in conjunction with a decision support
system, and it helps a firm attain its financial objectives because they use a minimal amount of resources
relative to a predetermined margin of safety. An FIS can be thought of as a financial planner for
electronic commerce that can also produce large amounts of market and financial data at once obtained
from financial databases worldwide.
Ensure that there are sufficient funds on hand to pay for obligations as they come due for
payment
Determine which customers, products, product lines and subsidiaries are the most and least
profitable
Determine the maximum amount of funds that can safely be distributed to investors in the form
of dividends
Determine the maximum debt load that the organization can sustain.
In most cases, an HRIS encompasses the basic functionalities needed for end-to-end Human Resources
Management (HRM). It is a system for recruitment, performance management, learning & development,
and more.
Accounting information system is a system of collecting, storing and processing financial and accounting
data that are used by decision makers.
AIS are designed to support all accounting functions and activities including auditing, financial
accounting porting, -managerial/ management accounting and tax. What are the components of AIS?
AIS generally consist of six primary components: people, procedures and instructions, data, software,
information technology infrastructure, and internal controls.
A decision support system is a software or program that helps professionals make and justify decisions.
Decision support systems can help to reduce errors and make workflow more efficient. By reducing the
time needed to make important decisions, decision support systems can streamline the process and
result in more tasks accomplished during a shift. The system also helps professionals avoid errors and
negative outcomes by supporting each decision with predictions or data, further improving workflow.
The system can also improve planning and increase management success. Many decision support
systems offer precise plans for implementing procedures based on their data, making it simpler for
professionals to correct mistakes or start new processes. This provides support to management and
alleviates some responsibility.
Communication:
The top company authority gets accurate data from the computerized software. The company CEO and
managerial staff communicate with each other and make decisions. They have all the statement ready
from the software and they have to only say yes or no to the statements.
Low cost:
If we use the old method of organizing and processing the data then it consumes a lot of manpower. We
just get data from relevant authorities and input it into our software. We also get data from doing little
research in any field. For example, if we want to construct a building then we get information from real
estate agents about cost, time, structure, maps and then we input in computer software and get the
results about total cost, and time duration.
Fast:
DSS is a fast method for taking decisions. Computers give us results fast. The data we need is displayed
on the screen within a few minutes. We have to just take decisions overselves after getting data from
the computer software.
Data-driven by DSS often make business transaction data available for performance monitoring and ad
hoc querying. Such systems can enhance management understanding of business operations and
managers perceive that this is useful. What is not always evident is the financial benefit from
increasingly detailed data.
Time savings.
For all categories of decision support systems, research has demonstrated and substantiated reduced
decision cycle time, increased employee productivity and more timely information for decision making.
The time savings that have been documented from using computerized decision support are often
substantial. Researchers, however, have not always demonstrated that decision quality remained the
same or actually improved.
The data management component performs the function of storing and maintaining the information
that you want your Decision Support System to use. The data management component, therefore,
consists of both the Decision Support System information and the Decision Support System database
management system.
Businesses use models to represent variables and their relationships. For example, you would use a
statistical model called analysis of variance to determine whether newspaper, TV, and billboard
advertizing are equally effective in increasing sales.
The user interface management component allows you to communicate with the Decision Support
System. It consists of the user interface management system. This is the component that allows you to
combine your know-how with the storage and processing capabilities of the computer.
The user interface is the part of the system you see through it when enter information, commands, and
models. This is the only component of the system with which you have direct contract. If you have a
Decision Support System with a poorly designed user interface, if it is too rigid or too cumbersome to
use, you simply won’t use it no matter what its capabilities. The best user interface uses your
terminology and methods and is flexible, consistent, simple, and adaptable.
The knowledge management component, like that in an expert system, provides information about the
relationship among data that is too complex for a database to represent. It consists of rules that can
constrain possible solution as well as alternative solutions and methods for evaluating them.
For example, when analyzing the impact of a price reduction, a Decision Support System should signal if
the forecasted volume of activity exceeds the volume that the projected staff can service. Such signaling
requires the Decision Support System to incorporate some rules-of-thumb about an appropriate ratio of
staff to sales volume. Such rules-of-thumb, also known as heuristics, make up the knowledge base.
Advantages of EIS
Easy for upper-level executives to use, extensive computer experience is not required in
operations
Disadvantages of EIS
System dependent
Limited functionality, by design
Information overload for some managers
Benefits hard to quantify
High implementation costs
System may become slow, large, and hard to manage
Need good internal processes for data management
May lead to less reliable and less secure data
Excessive cost for small company