IT For Business Phase 1 Session 1-2

IT For Business
By Ramanathan V
TAPMI Oct 2022
Course credit distribution
• Text Book we shall use : “Laudon, K. C., & Laudon, J. P. (2020).
Management Information Systems: Managing the digital firm
(17th Edition), Pearson Education Limited”
• Mid Term 20%
• Case Analysis 15% (Group) – For 2 cases (meant for session 9
and 20) written analysis should be given a day before the session
• Quiz 5%
• Assignment 10% (Group) – For written analysis before session 21
and group presentation during sessions 21,22 and 23.
• Term End Exam 50%
• Total 100%
Confidential Oct 2022 2

Information Technology
in organisation
Session 1, 2
Let us explore
What is
Information? IS Information
Technology Systems
different from
Management
Information Systems?
Can we live /work

without IT systems?
Amazon Smart Warehouse

Inside Amazon's Smart Warehouse - Bing video

Information Stack
• Data – Data is primitive form of information with or without attribute. '60'
is a mere number, and if we say 'Age 60' then there is an attribute attached
to it. But still primitive as use is very limited.
• Information – Information is either data with more attributes or a
collection of data with same attribute. 'Ramanathan's age is 60 years' or
'collection of ages (even without names) of this class' is
information. Information has a definite use.
• Knowledge - Information that is processed in such a way to present
a useful purpose for action. 'Average age of class is 27' provides some
information to act upon. Higher the level of purpose or larger
the purpose, then knowledge becomes more important and critical. But
knowledge is limited in timeline in general
• Wisdom – A well-researched knowledge / information that provides
insights into how data behaves (with its attributes) so that such wisdom is
useful to predict future possibilities and action to change future state.

Data to information
Raw data from a supermarket checkout counter can be processed and

organized to produce meaningful information, such as the total unit sales
of dish detergent or the total sales revenue from dish detergent for a
specific store or sales territory.

Information systems
Business : Strategy -> Objectives -> Processes
Software – Applications that help perform

business processes & thus interact with
Information Systems
business users
Hardware – Technologies including databases

that provide the hard components to make
software work
Telecommunication – Wide and local area

network that help business users exchange
information and collaborate across organisation
In contemporary systems there is a growing interdependence between a firm’s information

systems and its business capabilities. Changes in strategy, rules, and business processes
increasingly require changes in hardware, software, databases, and telecommunications.

Information Systems …
• Information system: Three activities produce information

systems need
• Input: Captures raw data from organization or external
environment
• Processing: Converts raw data into meaningful form
• Output: Transfers processed information to people or activities
that makes further use it
• Computers and software are technical foundation or tools,

similar to the material and tools used to build a house

Information Systems …
• Why we need IT systems?

• Operations – Ability, efficiency and/or excellence
• Amazon warehouse operations
• Offer products and services
• OTIS smart elevators, Uber
• Connect to Stakeholders of business – Customer, suppliers, employees
• Portals and EDI (electronic document interchange)
• Improve decision making
• Walmart - replenishing, re-ordering and trend based new orders
• Provide competitive advantage
• Private Banks differentiated from PSU Banks by Digitization
• Basic need to survival (run business successfully)
• Digital KYC

Information Systems Framework
Three basic activities—input, processing, and output—produce the information organizations

need. Feedback is output returned to appropriate people or activities in the organization to
evaluate and refine the input. Environmental actors, such as customers, suppliers,
competitors, stockholders, and regulatory agencies, interact with the organization and its
information systems.
Trends in Information Systems

IT and MIS
IT MIS
Understanding of organizational dynamics,

Provide technology components
processes and control systems
Centered on people; should be well-versed in

Centered on machines; Mastering requires
communication and problem-solving to be
technical knowledge
successful
Theoretical foundation in engineering and Applied area: problem-solving and project

mathematics management skills are more important
Generic; addresses problems in science and Organization specific. Focus in solving

technology domains managerial problems
Interpersonal skills play a more important

Skills in analytical thinking
role in implementation
Context-independent tools Tools generally context-specific

Why organizations Require IT Systems?
• Operational excellence
• Improvement of efficiency – e.g., Wal-Mart’s Retail Link system links suppliers
to stores for superior replenishment system
• New products , services and business models
• e.g., Digilocker, mobile based banking applications
• Customer and supplier intimacy
• High-end hotels that use computers to track customer preferences and use to
monitor and customize environment
• Improved decision making
• Digital dashboards
• Competitive advantage
• Responding to customers and suppliers in real time
• Survival
• Governmental regulations requiring record-keeping

Information For Decision Makers
Ad hoc Prespecified
Unscheduled Scheduled
Summarized Detailed
Infrequent Strategic Frequent
Forward looking Management Historical
External Internal
Wide scope Narrow focus
Tactical Management
Operational Management

Information For Decision making
Unstructured
EIS
Semi-structured
MIS
Structured TPS

Transaction processing systems
• Perform and record daily routine transactions necessary to

conduct business
• Examples: sales order entry, payroll, shipping
• Allow managers to monitor status of operations and

relations with external environment
• Serve operational levels
• Serve predefined, structured goals and decision making

A Payroll TPS
A TPS for payroll processing captures employee payment transaction data (such as a time
card). System outputs include online and hard-copy reports for management and employee
paychecks.
Management information systems
• Serve middle management

• Provide reports on firm’s current performance, based on
data from TPS
• Provide answers to routine questions with predefined
procedure for answering them
• Typically have little analytic capability

TPS → MIS
In the system illustrated by this diagram, three TPS supply summarized transaction data
to the MIS reporting system at the end of the time period. Managers gain access to the
organizational data through the MIS, which provides them with the appropriate reports.

Sample MIS report

Decision support systems
• Serve middle/senior management

• Support nonroutine decision making
• Example: What is impact on production schedule if December
sales doubled?
• Often use external information as well from TPS and MIS

• Model driven DSS
• Data driven DSS

Voyage-Estimating DSS
This DSS operates on a powerful PC. It is used daily by

managers who must develop bids on shipping contracts.

Executive support systems
• Support senior management

• Address nonroutine decisions requiring judgment,
evaluation, and insight
• Incorporate data about external events (e.g. new tax laws
or competitors) as well as summarized information from
internal MIS and DSS
• Example: Dashboards
• Data driven
• Model driven

Dashboard - Data driven

Dashboard - Model driven
This system pools data from diverse internal and external sources and
makes them available to executives in easy-to-use form.

Enterprise systems
Enterprise systems integrate the key business processes of an entire firm into a single
software system for seamless information flow and focus primarily on internal processes
but may include transactions with customers and vendors.

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IT For Business

Confidential Oct 2022 2

Can we live /work

Amazon Smart Warehouse

Confidential Oct 2022 4

Confidential Oct 2022 5

Raw data from a supermarket checkout counter can be processed and

Confidential Oct 2022 6

Business : Strategy -> Objectives -> Processes

Software – Applications that help perform

Hardware – Technologies including databases

Telecommunication – Wide and local area

In contemporary systems there is a growing interdependence between a firm’s information

Confidential Oct 2022 7

• Information system: Three activities produce information

• Computers and software are technical foundation or tools,

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• Why we need IT systems?

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Three basic activities—input, processing, and output—produce the information organizations

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Understanding of organizational dynamics,

Centered on people; should be well-versed in

Theoretical foundation in engineering and Applied area: problem-solving and project

Generic; addresses problems in science and Organization specific. Focus in solving

Interpersonal skills play a more important

Context-independent tools Tools generally context-specific

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• Perform and record daily routine transactions necessary to

• Allow managers to monitor status of operations and

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• Serve middle management

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• Serve middle/senior management

• Often use external information as well from TPS and MIS

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This DSS operates on a powerful PC. It is used daily by

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• Support senior management

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