Lecture 2 Business Information Systems Systems Analysis & Design Academic Year 2008/9
Objectives By the end of this lecture you will • Have examined the impact of Information technology on businesses • Examined how Business uses Information systems • Considered the effects of the Internet on Business needs
The Impact of Information Technology These headlines offer a dramatic example of how IT affects Business. Fig 1.1 Shelley Cashman et al Ch1 p2
Information in Business Companies use information as a weapon in the battle to • Increase productivity • Deliver quality products and services • Maintain customer loyalty • Make sound decisions • Compete in a global economy
Information – a vital Asset Most companies treat information as a vital asset which must be: • Used effectively • Updated constantly • Safeguarded carefully
Who develops Information systems? Traditionally there were two alternative choices for a business: • Develop own information systems (in house applications) • Purchase systems from outside vendors (software packages) Today the choice is much more complex
Options for system development Today Companies have greater choice and new systems can be developed from the following: • Internet based application services • Outsourcing • Custom solutions from IT consultants More of these in later Lectures
Launching a new system has risks The greatest risk occurs when a company tries to decide how the system will be implemented before determining what the system is supposed to do. To avoid this we have to begin by outlining a company’s business needs and identifying possible solutions.
Understanding the Business Each business situation is different • For example a Hotel Chain, a Retail store and an Internet auction site all have unique information requirements. • Analysts use a process called Business Process modelling to represent a company’s operations and information needs
Business Models “A business model is a graphical representation of one or more business processes that a company performs” (a) e.g. handling a sales order, or crediting a customer’s account. (a) Shelley Cashman et al p8
Business Profile “A business profile is an overview that describes a company’s overall functions, services, products, customers, suppliers, competitors, constraints and future direction” (b) (b) Shelley Cashman et al p8
Business Process model The following slide contains an example of a Business process model • Business process modelling requires a series of models which document a company’s Business profile and various business practices
A simple business model might consist of an Event 3 Business Processes and a Result Question: Does this show Business profile or Business process?
Information systems in Business IT Managers often divide systems into categories These categories are based upon the User group the system serves. These include • Office systems, (Admin) • Operations systems (Transaction processing) • Decision support systems and Executive Information systems.
Tutorial time For this tutorial you need to find another student to work with. If you were an A last week, then you need to find a B student and vice versa. You can move to sit next to your new working partner. This will prevent your falling asleep!
Tutorial – Business process modelling • Choose one Business example from the three examples given in slide 9. (Hotel, Retail store, auction site) • Brainstorm to answer the following questions: “What typical business processes would this Organisation would want to perform?”
Feedback This is your chance to ask if you have correctly brainstormed or ‘gone off at a tangent’ Do not worry, you will get more brainstorming practice in our tutorials this term.
Business Operations 1. Transaction processing system • One of the most important areas of Information management • Transaction processing can involve thousands of transactions each day.
Business Operations - TPS • Transaction processing (TP) systems process data generated by day to day business operations. For example customer order processing, producing invoices and processing claims under warranty.
Transaction Processing example A simple transaction can require six tasks which the TPS Processes as a group.
Business Operations • Internet based commerce (e-commerce (electronic commerce) or i-commerce (Internet commerce) • B2B – Business to Business • B2C – Business to Consumer
B2C (Business to Consumer) • Using the Internet, purchasers can go on line to purchase an enormous variety of products and services • B2C commerce is changing traditional business models • Web designers create attractive sites that increase online sales.
B2B (Business to Business) effects • B2B Allows companies to access the Global marketplace (online trading) • The volume of B2B transactions is much greater than that of B2C. • It enables instant information about market prices and availability.
Growth areas in system development • Internet based system development • Software services (e.g. Internet systems with Web pages, levels of data management software and web based database server)
In Conclusion You have now had the opportunity to: • Examine the impact of IT on businesses • Examined how modern business(es) use Information Technology • Consider how the Internet has effected modern business needs and practice.
Recommended Reading ‘Technology’ Chapter 1 up to page 14 of the recommended text ‘Systems Analysis & Design’, Shelley Cashman Series, Thomson Course