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4 Elements of Information Systems

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The use of information technology (IT) has dramatically increased in the business world in the past decade.  It has been acknowledged that information systems (IS) is a very important step to compete and grow.  There are four elements of IS that new systems need to work correctly.

4 Elements

  1. Customers – The main function of IS is to be able to better support the end user or customer. This is both internal and external.  Externally it could be an online shopper who wants to buy from a website.  Internal customers would be something like employees or one department in a company who needs supplies from another department.  IS was developed in order to better support external customers.  Also something to focus on is flexibility supporting internal customers.
  2. Products and Services – This deals in data transformation. The IS has to work well in any industry.  It helps prepare many types of services and/or products based on design.  Customer expectations have to be satisfied in order to be considered successful.
  3. Business Processes – Improvements to processes directly influence performance. It provides relevant information to the company.  This improves said company’s processes by adding or removing steps as needed.
  4. Communication Technology and Computers – This is the central piece of the information system. They have to be able to deliver efficient business processes and make the customers happy.  This is done through either delivery of product or services rendered.  Technology helps to improve communication through email and chat internally.  Externally it provides a good website that people will enjoy visiting.  Information can be accessed much more quickly which increases the competitive edge.

Why Use IS?

Information systems helps improve relations between customers and the business, or business to business relationships.  The question is, which type of system does your company need?  A lot of questions to consider before making the leap to upgrading

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8 Types of Business Information Systems

functional, constituency, information, information gathering, data, data gathering, business information systems, information systems,

When upgrading what type of business information system you use at your company, everything has to be taken into account.  As the saying goes, no stone goes unturned.  If something is ignored or overlooked, it could potentially ruin the entire upgrade.  No system is the same and one system won’t provide all the information for one agency.

What Are The Different Systems?

There will always be a collection of systems in place to take care of different actions.  The different systems can be called either functional or constituency.  Functional perspectives look at systems by the business function that they perform.  Constituency perspectives look at systems through looking at the organization that they serve.

The four main information systems serving functional systems:

  1. Sales and Marketing –  They can improve how the company monitors sales transactions, can analyze sales trends and effectiveness of marketing campaigns.
  2. Manufacturing and Production – It provides information about numbers of items available in inventory so that they can build more product without interruption.
  3. Finance and Accounting – Provides accounts receivable system to track and store customer data.
  4. Human Resources – Maintains data on company data supporting HR functions.

The four categories of constituency are:

  1. Transaction Processing Systems (TPS) – Basic systems serving at the operation level of companies. They record daily routine transactions needed to conduct business like sales receipts.
  2. Management Information Systems (MIS) – Support middle managers’ interests. Support through giving historical performance information to perform decision making actions at the management level.  MIS and TPS data work together to build reports of basic operations.
  3. Decision Support Systems (DSS) – The business intelligence system. Helps managers with unique, fast changing and not easily found decisions that have to be made.  For example, they might be used to help the manager to develop a bid on contracts.
  4. Executive Support Systems (ESS) – Used by senior managers to find answers to strategic issues and long-term trends in both the company and their environment. This type of system pools data from both internal and external sources, consolidating the data found into a form that is easy to use.

Integration and Implementation

In order for these systems to work correctly it is good to use them with others.  For example, TPS is a major source of data for other systems while ESS is a recipient of data from external sources and lower systems.  They all work together interdependently in some manner or another.  But as it is, most businesses are starting to use new technologies that they create themselves.  This better combines information from all the different systems mentioned beforehand, therefore making the said company more competitive.

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Information Systems and Effective Management

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Information technology (IT) is a huge part of effective management that managers have to know.  They have to as they build and put into place new decisions every day.  The information systems (IS) are for the most part completely built from scratch.  The main purpose of strategic information systems planning (SISP) is to create implement new systems to use for the agency that the managers work for.  This is something that has to be worked from the top on down or it will never gain fruition.  There are complications to building these new systems, but if done correctly, it can be a godsend.

SISP Research and Implementation

Steven L. Alter did some research into which agencies have the most success with SISP through adapting to it correctly and optimally.  He has found that applications being created and used now are now built to support the managers who have to make decisions, instead of replacing them.  This is called decision support systems and are used to greatly improve managerial effectiveness.  The problem is that there is a restriction of knowledge as to what kinds of systems are used now.    This means that information systems are out there that the manager and their superiors have not built it themselves, so they don’t know what these systems do.  Don’t just focus on the technical aspect, focus on how the new system will work with the agency in question.

6 Types of Systems

The types of systems used are:

  1. Used to retrieve isolated data
  2. Uses mechanisms for ad hoc analysis of data
  3. Gathers aggregations specified beforehand in standard reports
  4. Can estimate consequences of all proposed decisions
  5. Can propose decisions based off of data gathered
  6. Can help to make strategic decisions based off of the data gathered

Examples of SISP Being Used

Some examples of how SISP is used are:

  • For retrieval of information only – shop floor IS
  • Retrieval and analysis – portfolio analysis system
  • Multiple data bases and analysis – sales IS
  • Eval of decisions using accounting models – source-and-application-of-funds budgeting
  • Eval of decisions using simulation models – marketing decision system
  • Proposing decisions – optimize raw materials usage
  • Making decisions – insurance renewal rate system

Questions to Ask Yourself

There is a huge range of approaches that can be taken here that would be helpful depending on what is needed for said company’s business model.  What do they do?  What needs to be fixed that they would bring this up?  What improvements are going to be implemented?  What do they want the company to strive towards?  What systems are they going to use in order to implement their changes?

Build the System

These are just some of the questions that have to be answered before the company goes forward.  If there’s no clear vision on what is going to be done SISP can be a complete failure instead of being a bonus.  Build small prototypes first of specific areas in order to find where the bugs are.  Then they can be fixed with little or any cost before the big implementation begins.  Just remember as the author points out, building an IS makes sense when it is clear that changes are needed in how decisions are made in the company.  That and everyone learns what the role is of computers are in their workplaces, and helps managers to make decisions dealing with administration and competitive strategies against other companies in their industry.

 

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Key Methods of SISP

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SISP can be defined as the process to determine the computer applications that help achieve business objectives. SISP can be considered a critical management tool as it focuses on strategic goals of organizations. It’s needed in order to move strategic directions of organizations.  Otherwise things could get sloppy really fast. SISP keeps things organized when change is being implemented in agencies, especially with information technology (IT).

Why Use Any Methodology of SISP

Different methodologies that SISP uses is:

1. Business System Planning
2. Strategic Systems Planning
3. Information Engineering
4. Information Quality Analysis
5. Business Information Analysis

Whichever changes are chosen by the agency will influence methodology of implementation. It may also be more prudent to choose a bunch of different ways to complete it. This will help to keep a balancing act together when planning for the future.

Why Use SISP At All?

It seems that top management still doesn’t fully support using SISP methods in order to better compile and implement new changes. Research suggests agencies cannot reach success if there isn’t proper alignment of business and information systems strategies. There has to be a good mesh in order for the changes to be fully implemented with no problems. If there is no fit, it’s unlikely that there will be a proper alignment between information technology (IT) and the agency in question.

The Different Methodologies

The different methodologies are:

1. Business planning
2. Competitive impact
3. Computer-based applications
4. Conceptual analysis
5. Information systems planning
6. Information technology resource planning
7. Methodology
8. Strategic alignment
9. Strategic information systems planning (SISP)
10. Strategic management
11. SISP approach
12. SISP methodology
13. Strategic management planning
14. Strategic planning

The Why of All This

These methods can all be switched around and used in different ways in order to better find solutions. It has to be done correctly or a large amount of money will be invested with no results. Benefits from investing in IT can only be seen when there is a strategic alignment between IT and strategic business strategies. IT resources have to be able to target areas in the agency that are considered the most critical to their success. This has to be done with upper management, to include CEOs, CIOs and managers. This is why I have suggested in past posts that upper management is critical in SISP. If they are not willing to change initiatives and programs, there will be no change in the agency.

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Why is SISP Important for Organizations to Use?

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data, information, information technology, information systems, systems, IS, IT, SISP, strategic information systems planning, planning, IS planning, IT planning
The Relationship Between Data, Information and Intelligence

As time goes on there has been a recognition that information technology (IT) is becoming more and more integrated in businesses and organizations. But as it is, IT is only as successful as how aligned the information system (IS) development is within the company. This is where SISP comes into play. One issue is that there is raised pressure to leverage importance of SISP, and is a key issue to top management.

The Main Purpose

Basically SISP helps to find computer-based applications in order to better assist organizations. This helps them to use their business plans and reach business goals. So in this it helps to identify and use IS to reach both goals, objectives, and affect strategy. If it isn’t used correctly it instead can cause lost opportunities and waste money on resources not needed.

Strategic…How?

IS can be considered a strategic part of an organization. It helps conducting of daily activities, supports decision making, and works correctly in timely manners. There are four areas that IS can be considered a strength in:

1. It helps to gain competitive advantages
2. It helps increase productivity/performance
3. It enables new ways in management and organization
4. It assists to create new business opportunities

How Does SISP Work?

As to how the strategy works depends on how the customer wants the IS to be used in their organization. But SISP brings users and professionals together in order to help build a mutual understanding of what the information systems do and what problems can arise from them. This helps to create priorities in development. What the customer and professional does is rank systems in terms of efficiency, effectiveness and value to the company or organization that is considering switching systems.

The Five Phases of SISP

It can help build barriers against new entrants, change the competition, create new products to sell, and find cost-effective methods between they themselves as the customer with their suppliers. There are five phases in SISP:

1. The new business plan incorporating IT
2. Information systems assessment
3. Information systems vision
4. Information systems guidelines
5. New strategic initiatives

Four Objectives when Implementing

This is for both public and private organizations, as it is an incredibly important step in the entire process. SISP is only as good as how the organization implements and uses the ideas given. This in turn will decide how successful the company will be in the future. Always plan ahead as adopting IS creates a huge expense.
There are four objectives when implementing the new information systems:

1. Alignment
2. Analysis
3. Cooperation
4. Marked improvement of capabilities

Challenges

SISP improvements are considered a major challenge today for IS executives. Planning has to be successful in order to find out potential strategic impacts of IS. One thing to make sure of is, IS has to be planned and aligned with organization planning or it won’t work correctly. If it is aligned correctly then there will be fewer problems with the new hardware and software, along with a smooth and effective implementation of plans.