BUSINESS INFORMATION SYSTEMS
CHAPTER 1: INFORMATION SYSTEMS, STRATEGY & GOVERNANCE
1.1 What is an IS?
A. What is BIS? = Business Information System
Digital disruptors = new technologies that disrupt the way businesses conduct their business nowadays with their
added value (phones, drones, apps, …) → businesses have to keep innovating their business plans
Importance of business people and IT people = business-IT alignment
f.e.: - Drones (insurance, forest maintenance, package
- Analytics (Netflix, Amazon) delivery)
- Internet of Things (Telematics, - Self-driving cars
Moocall) (IoT-system) - …
Danger: Deepfake = using AI to create videos/audios of people that aren’t real
Information?
- Data = raw observed facts of events like business transactions (f.e. symbols, numbers, documents, …)
- Information = processed data useful for decision-making process
Data are building blocks of information
- Knowledge = ability to perform certain tasks by combining data with own information and experience
metadata = data about data (f.e. range, type, by whom?, …)
o XML = Extensible Markup Language
o Tag-based language to describe metadata
o User can define own tags
• To make data more comprehensible to humans and computers
• Easy to share information between companies and/or people
System?
- Elements: system has a set of elements
f.e. physical objects, energetic units, biological units, …
- Relations: elements are related (sometimes for a specific purpose)
f.e. distance and time, physical relations, logical relations,
cause/effect relations, …
- Purposes f.e. delivery of services, production of finished goods,
obtaining profits, stimulating employment
→ f.e. traffic system (elements, relations and purposes on ppt)
→ description of system dependent on purpose (f.e. car driver,
police, GPS, Taxi driver, City council, …)
Business Systems?
➔ Purposes:
o Boost sales
o Profits
o Reduce costs
o Environment
o Shareholder value
Business Information Systems?
= set of related components to collect, search, process, store and
distribute information to support the coordination & control of the
decision-making process within an organization (company,
government, non-profit, …)
takes data
processes it
puts it to use for the company’s goals
1
, B. Types of BIS
Decision making levels: Functional areas:
- Strategic level: - Sales & marketing
o Long-term decisions o Order processing
o Group level o Pricing
o Based on unstructured information o Forecasts
o What if?-analytics - Production & logistics
- Management level: o Process control
o Mid-long-term decisions o Planning
o Identify execution plans for group decisions o Opening a new production unit
o Project management - Finance & accountancy
- Operational level: o Registration of financial transactions
o Daily operations & decisions o Short-term budgeting
o Based on structured information o Long-term planning
o Immediate results - Human resources
o Registration recruitments and dismissal
o Distribution of pay scales
o Planning personnel needs
TYPES OF BIS
Executive
5-year Support
Operating
Systems (ESS)
Plans
5-year Profit
Sales Planning
Trend Personnel
Forecasting Planning
Management
Information
Systems (MIS)
Sales Inventory Annual Relocation
management Control Budgeting Cost Control Decision-
Production Profitability Contract Support
Sales Region
Analysis Scheduling Analysis Cost Analysis Systems (DSS)
Material Payroll,
Order Employee Transaction
Movement Accounts
processing Recordkeeping
Control Payable Processing
Systems (TPS)
2
,OPERATIONAL INFORMATION SYSTEMS
- Characteristics:
o Processes: o Users:
• Wel structured • Clerks
• Ambiguous • Cashiers
• Routinely • Sales assistants
o Decisions: o Required information:
• Short-term • Easy to determine
• Occur frequently • Independent of individual
• Little uncertainties • Well structured
• From within organization
- Examples:
o Online Transaction Processing Systems (OLTP)
• Point of Sale (POS)
system
• Order-entry system
• Financial transaction
system
o Enterprise Resource Planning (ERP)
• Single information system for organization-wide coordination and integration of business
processes
• “Off-the-shelf” modules based on best practices
• “Plain vanilla” ERP
• vs. customisation
• Vendors
▪ SAP, Oracle/PeopleSoft,
Odoo(OpenERP), …
TACTICAL INFORMATION SYSTEMS
- Characteristics:
o Processes:
• less routinely
o decisions:
• mid-term
• less often
• more uncertainties/risks
o users:
• middle management
o required information:
• operational level + data warehouse
• less easy to determine
• dependent of individual and moment
• less well structured
• need for external information increases
3
, - Examples
o Management Information Systems (MIS)
Components:
• input: transaction records, data warehouse
• processing: routine reporting, low-level
analysis
• output: summary, exception reports
• users: middle managers
o Decision Support Systems (DSS)
Components:
• Management level: data analysis for decision making
• Input: data – low volume and data warehouses, analytical models, data analysis tools
• Processing: interactive, simulation
• Output: special reports, decision analysis, answer to specific queries
• Users: middle and executive managers
Credit scoring: decide to accept credit for a customer or not based on:
• Customer characteristics
• Loan characteristics
• Macro-economy
Recommendation: decide which Amazon products to promote based on:
• Previously bought products
• Reviews
• Time of year
STRATEGIC INFORMATION SYSTEMS
- Characteristics
o processes: o users:
• unstructured • C-level executives (CEO, CFO, CIO, etc.)
• less unambiguous, o required information:
• occasionally • very hard to determine
o decisions: • strongly dependent of individual
• concerning long term • highly less structured and occurs
• rather incidental and irregular character particularly in the company’s
• much uncertainty and/or risk environment
- Examples
o Executive Support Systems (ESS)
Components:
• communication and calculations at strategic level
• input: external and internal aggregated data
• processing: graphical, simulation, interactive
• output: projections, answer to queries
• users: top-level managers, board of directors
System Relations:
o Data warehousing, OLAP, data mining, web mining, ...
4
