Management Information System
MANAGEMENT INFORMATION SYSTEMS
CHAPTER 8
BASIC SYSTEMS CONCEPTS AND TOOLS
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AGENDA
• The Systems View
• Business Processes
• Systems Development Life Cycle and Structured Techniques
• Information Systems Controls
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Management Information System
THE SYSTEMS VIEW
What is a system?
• System: A set of interrelated components that must work
together to achieve some common purpose
Information System: The collection of IT, procedures, and
people responsible for the capture, movement, management, and
distribution of data and information
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THE SYSTEMS VIEW
• The term “System” is used to refer to something broader than an
information system:
• Systems thinking is:
- A discipline for seeing wholes
- A framework for seeing interrelationships rather than things
- An antidote to feeling of helplessness when dealing with
complexity
• A systems perspective is useful for understanding the
relationships among business units and organizational events.
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Management Information System
THE SYSTEMS VIEW
• Each piece needs to be well-designed, but the pieces also need
to work well together
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THE SYSTEMS VIEW
Seven key system elements:
1. Boundary
2. Environment
3. Inputs
4. Outputs
5. Components
6. Interfaces
7. Storage
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SEVEN KEY SYSTEM ELEMENTS
1. BOUNDARY
•Delineation of which elements are within the system and which
are outside
•Where to draw the boundary depends on:
- What can be controlled
- What scope is manageable within a given time frame
- The impact of a boundary change
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SEVEN KEY SYSTEM ELEMENTS
2. ENVIRONMENT
• Everything outside the system
.
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Management Information System
SEVEN KEY SYSTEM ELEMENTS
.
3. INPUTS
Resources from the environment that are consumed and
manipulated within the system
4. OUTPUTS
Resources or products provided to the environment by the
activities within the system
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SEVEN KEY SYSTEM ELEMENTS
5. COMPONENTS
• Activities or processes within the system that transform inputs
into intermediate forms or that generate system outputs
• Some system components can be viewed as systems with their
own sets of interrelated components = subsystems
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Management Information System
SEVEN KEY SYSTEM ELEMENTS
6. INTERFACES
The place where two components or the system and its
environment meet or interact
7. STORAGE
Holding areas used for the temporary and permanent storage of
information, energy, materials, etc.
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KEY SYSTEM ELEMENTS :
PAYROLL EXAMPLE
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Management Information System
COMPONENT DECOMPOSITION
Sales Summary System Produce Sales Summary Subsystem
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COMPONENT DECOMPOSITION
• Hierarchical decomposition: the process of breaking a
system down into successive levels of subsystems
• Goals of hierarchical decomposition:
- Cope with system complexity
- Analyze or change only part of the system
- Design and build each subsystem at different times
- Direct the attention of a target audience
- Allow components to operate more independently
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Management Information System
INTERFACES
Functions of Interfaces include:
- Filtering - Buffer
- Disposing of useless data (or - Allowing two subsystems to
noise) work together without being
tightly synchronized
- Coding/decoding - Security
- Translating data from one - Rejecting unauthorized requests
format into another for data and providing other
- Error detection and protection mechanisms
correction - Summarizing
- Checking for compliance to - Condensing large volumes of
input to reduce the amount of
standards and for
work needed by subsequent
consistency
subsystems
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THE SYSTEMS VIEW
Organizations as systems
• One useful framework for examining how information systems
fit into organizational systems is based on the Leavitt diamond
• Four fundamental components in an organization:
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Management Information System
THE SYSTEMS VIEW
• Leavitt Diamond tells us that:
• If one component is changed, the others will likely be
affected as well
• Example: New software
- Business processes need to be redesigned
- Organizational structures might need to be modified
- People have to be trained
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SYSTEMS ANALYSIS AND DESIGN (SA&D)
Five Key Design Principles for Information Systems
• Two principles stem from key systems characteristics:
1. Choose an appropriate scope
- Selecting the boundary for the IS greatly influences
complexity and success of the project
2. Logical before physical
- You must know what an IS is to do before you can
specify how a system is to operate
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Management Information System
SYSTEMS ANALYSIS AND DESIGN (SA+D)
• Three principles are problem-solving steps:
3. A problem is actually a set of problems and an
appropriate strategy is to keep breaking down a problem
into smaller, more manageable problems
4. A single solution is not usually obvious to all
stakeholders, so alternative solutions representing all
parties should be generated before a final solution is
selected
5. The problem and your understanding of it could change,
so a staged approach that incorporates reassessments and
incremental commitment to a solution is best
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BUSINESS PROCESSES
• Beginning in the early 1990s many organizations changed from a
more functional approach to a more process-oriented approach to
better compete
Business Process: Chain of activities required to achieve an
outcome -- such as order fulfillment or materials acquisition
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Management Information System
BUSINESS PROCESSES
• Business Process gurus in the early 1990s urged companies to
radically change the way they did business -- by starting with a
“clean slate” and utilizing information technology
Hammer, Michael. 1990. “Reengineering work: Don’t automate, obliterate.”
Harvard Business Review 68 (July-August): 104-112
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BUSINESS PROCESS REENGINEERING (BPR)
Business Process Reengineering (BPR): Radical business redesign
initiatives that attempt to achieve dramatic improvements in business
processes by questioning the assumptions, or business rules, that
underlie the organization’s structures and procedures
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EARLY BPR EXAMPLES
• Accounts Payable at Ford Motor Company
- 75% improvement gains after assumptions were
questioned and a reengineered solution was identified
• Mutual Benefit Life Insurance
- Changed a process that involved 19 people in five
departments so that it could be accomplished by one
person
- Time to issue a policy decreased from 3 weeks to 3
hours
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EVALUATING BUSINESS PROCESSES
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HAMMER’S 6 PRINCIPLES FOR BPR
Six Key Principles for Redesigning Business Processes
• Organize business processes around outcomes, not tasks
• Assign those who use the output to perform the process
• Integrate information processing into the work that produces
the information
• Create a virtual enterprise by treating geographically distributed
resources as though they were centralized
• Lick parallel activities instead of integrating their results
• Have people who do the work make all the decisions, and let
controls built into the system monitor the process
Hammer 1990
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WAYS THAT IT CAN ENABLE
A NEW BUSINESS PROCESS
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SYSTEMS DEVELOPMENT LIFE CYCLE (SDLC)
• 3 SDLC Phases:
Figure 8.8
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SYSTEMS DEVELOPMENT LIFE CYCLE (SDLC)
Definition: end users and systems analysts conduct a
multistep analysis of the current business operations and
the information system or systems in the area of concern
Construction: designing, building, and testing of a system
that satisfies the requirements developed in the Definition
phase
Implementation: install the new system, which often involves
converting data and procedures from an old system
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Management Information System
STRUCTURED TECHNIQUES
Tools to document system needs, requirements, functional
features, dependencies, and design decisions
• Procedural-oriented:
- Most common approach
- Include data-oriented, sequential, process-oriented
activities
• Object-oriented:
- Newer approach
- Works well for GUIs and multimedia applications
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PROCEDURE- ORIENTED TECHNIQUES
• Describe what you have, define what you want, and describe
how you will make what you want.
1. As-Is (what you have)
2. Logical To-Be (what you want)
3. Physical To-Be (how to make what you want)
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Management Information System
PROCEDURE- ORIENTED TECHNIQUES
1. As-Is
• Identifies existing processes, external participants, other
databases or applications, and inputs and outputs
2. Logical To-Be
• Describes “what” rather than “how”
• High-level model of a nonexistent new system
• Identifies processes and data
• Does not identify who does activity, where accomplished, or
type of hardware or software
3. Physical To-Be
• Maps the logical requirements to available technology
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PROCEDURE- ORIENTED TECHNIQUES
Context Diagram
• Diagrams system with regard to other entities and
activities with which it interacts
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PROCEDURE- ORIENTED TECHNIQUES
Data Flow Diagram (DFD)
• Diagrams the flows of information through the system
• Four symbols represent:
- External Entity
- Data Flow
- Process
- Data Store
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PROCEDURE- ORIENTED TECHNIQUES:
TOP-LEVEL DFD EXAMPLE
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PROCEDURE- ORIENTED TECHNIQUES
Data Dictionary/Directory
- Used to define data elements
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PROCEDURE- ORIENTED TECHNIQUES
Entity-Relationship Diagram (ERD)
- Used to define relationships among entities
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PROCEDURE- ORIENTED TECHNIQUES
Physical To-Be Model
• Draft Layout of screen interface design
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OBJECT- ORIENTED (O-O) TECHNIQUES
• Primary advantages:
- Facilitates object reuse & quick prototyping
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OBJECT-ORIENTED CONCEPTS
• Encapsulation
- An object contains data and related operations
- Allows loosely coupled modules and reuse
• Inheritance
- One class of objects can inherit characteristics from
others
• Polymorphism
- The ability to treat child objects the same as parent
objects (i.e., call methods exactly the same)
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OBJECT-ORIENTED TECHNIQUES
Unified Modeling Language (UML)
• A set of standardized techniques and notations for O-O
analysis and design
• Examples of UML diagrams:
- Use Case diagram
- Sequence diagram
- Class diagram
UML
UML Diagrams
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UNIFIED MODELING LANGUAGE (UML)
Use Case Design
- Represents the interaction of users with the system
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UNIFIED MODELING LANGUAGE (UML)
Sequence Diagram
- Captures the messages that pass between objects
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UNIFIED MODELING LANGUAGE (UML)
Class Diagram
- Represents each object’s attributes, methods, and
relationships with other objects
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INFORMATION SYSTEMS CONTROLS
• Controls can be built into an information system, to mitigate some
business risks, throughout the SDLC process.
• Three types of control mechanisms
- Management policies
- Operating procedures
- Auditing function
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SYSTEMS CONCEPTS SUMMARY
• Systems Thinking is a hallmark of good management in general.
• Systems characteristics are important for IS work:
- Determining the system boundary
- Component decomposition
- Designing a system interface
• Structured techniques are still most common, but Object-Oriented
techniques (including UML) have become more prevalent
• Systems controls need to be identified and implemented throughout
the systems development cycle
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