Publication 11 15953 1575

Lecture 6 15/11/2015
Information system applications:
1. Business support.
2. E-commerce.
3. Security.
1. Business support systems:
Different types of information systems are used by the various

management levels of an organization. They support the objectives of the
business by increasing the efficiency of business processes, cutting supply
costs, improving levels of customer service and improving managerial
decision-making.
Applications at Different Management Levels:
1. Transaction Processing Systems:

Common modules of a TPS include:
 Order processing: orders for goods or services can enter the system from
customers, salespeople, or other internal departments.
 General ledger: details of all transactions affecting the accounts of the
company are recorded to simplify bookkeeping and reporting.
 Accounts payable and receivable: data generated from buying orders can
be used to improve debt collection and cash flow.
 Inventory(‫ )قوائم الجرد‬management: IS is commonly used for tracking of
materials and for linking the organization to suppliers.
 Payroll(‫)الرواتب‬: employee details, pays, etc.
2. Management Information Systems:
Management Information Systems (MIS) are systems that use the data
generated by the TPS to help lower and middle management in their
decision making. MIS use a variety of techniques to process, summarize
and present the information in the form of useful reports: tables,
statistics, graphics, etc.
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Lecture 6 15/11/2015
3. Decision Support Systems

Decision Support Systems (DSS) are systems that assist managers with
very specific types of decision-making situations. The next Figure illustrates
the various steps of the typical decision making process.
Collect data about Generate a number of

decision or problem alternatives
If no acceptable
Feedback: can the decision be
alternative
improved
Implement the most Evaluate each of the

desirable option alternative
The following diagram of a DSS shows the three main components; the
database, model base and user interface.
Model Base
User User
Interface
DSS database
 DSS Database. This database contains current and historical data

from all the relevant business applications.
 Model base. This is a library of analytical tools that can be used to

evaluate and represent data, and data retrieval tools to select, sort and
summarize, and the ability to test possible scenarios through
sensitivity analysis and goal seeking.
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Lecture 6 15/11/2015
 User Interface. When a user requires a report or enquiry to be

performed by the DSS, he or she will enter the request in a high level,
user friendly business language. These user interfaces also offer
stylish output formatting with, for example, the results being
presented in text format or as business charts.
4. Executive Information Systems:

Executive Information Systems (EIS) provide rapid access to both
internal and external information, often presented in graphical format, but
with the ability to present more detailed underlying data if it is required.
Strategic Systems:
An important special type of organizational information system is used
in business: strategic information systems.
The following three possible strategies are typically distinguished.
1) Low-cost strategy: use of the information systems to produce
important cost-savings and thus offer services/products at a lower price
(or increase profit limits). One typical example is the use of alternative
marketing or distribution channels such as using the Internet for
receiving orders and eliminating middlemen such as dealers.
2) A differentiation strategy: use of information systems to add value to

your products or services. Technology can enhance quality through
better manufacturing processes (e.g. a quality control system or
automated manufacturing). Other possibilities are the use of computer
and communication technologies to enhance after-sales support.
3) A niche marketing strategy: using information systems technology to

service very small, isolated or exclusive markets that have specific
demands. A good example is the publishing industry: An example in
the publishing technology is the production of small design of
“textbooks on demand”.
Intelligent Systems:
Artificial intelligence (AI) is the branch of computer science concerned

with understanding the nature of human intelligence with the goal of
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Lecture 6 15/11/2015
simulating aspects of it with a computer. There are four areas of AI research

that have made some progress towards the goal of an intelligent machine:
 Natural languages: the ability for computers to understand the
spoken word.
 Robotics: where machines perform co-ordinated physical tasks.
 Visual perception: the ability of machines to recognize visually
shapes and objects.
 Expert Systems: systems developed to simulate the decision-making
behavior of humans in a narrow area of expertise.
Data Warehouses, Data Mining and OLAP:
1) Data warehouses: Business managers have only recently started to

realize how much valuable information is hidden inside the many
different databases underlying their information systems. Data
warehouses can be used to correlate and analyze the information
contained in different databases within the same organization.
2) On-line analytical processing: On-line analytical processing (OLAP)

is concerned with the real-time analysis of large business databases to
find trends and inter-relationship by managers and decision-makers.
3) Data mining: The huge amounts of information often make it very

difficult for humans to recognize important trends within the masses
of data in the data warehouse. Data mining is the use of statistical
methods, packaged in a single computer package to discover deep or
hidden data interrelationships.
2- Electronic commerce(E- commerce):
With the growth of the internet, electronic commerce is playing an

important role in linking organizations with their customers and their
business partners, and is becoming an essential component of the IT strategy
of modern businesses. When e-commerce is done in a wireless environment,
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Lecture 6 15/11/2015
such as through the use of cellphones, this is referred to as mobile

commerce (m-commerce).
Important categories of e-commerce include:
1. Business-to-consumer (B2C).
2. Business-to-business (B2B).
3. Consumer-to-consumer (C2C).
1- Business-to-Consumer (B2C):
Business-to-consumer commerce allows customers to make enquiries
about products, place orders, pay accounts, and obtain service support via
the Internet. Since customers can enter transactions at any time of the day or
night, and from any geographical location, this can be a powerful tool for
expanding the customer base of a business.
A successful web site should be attractive to look at and easy to use. In
addition, it should offer its customers good performance, efficient service,
and security. Insufficient server power and communications capacity may
cause customers to become upset when browsing or selecting products.
Many sites record details of their customers’ interests, so that they can
be guided to the appropriate parts of the site and provide discounts and
special offers for regular customers.
2- Business-to-Business (B2B):
Business-to-business e-commerce comprises the common of electronic
transactions, involving the supply chain between organizations and their
distributors, suppliers and other partners.
Efficient management of the supply chain can cut costs, increase profits,
improve relationships with customers and suppliers, and gain good
advantage.
To achieve this, companies need to:
 Get the right product to the right place at the least cost;
 Keep inventory as low as possible while meeting customer
requirements;
 Reduce cycle times by speeding up the gaining and processing of raw
materials.
Information technologies used to support business-to-business e-
commerce include email, product catalogues, and order processing systems.
These functions may be linked to traditional accounting and business
information systems, to ensure that inventory and other databases are
automatically updated via web transactions.
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Lecture 6 15/11/2015
Intranets provide a facility for members of an organization to chat, hold

meetings and exchange information, while at the same time sensitive
information is protected from unauthorized access by means of a firewall.
An extranet provides a means of access to the intranet for authorized
users such as business consultants.
3- C2C e-Commerce:
Sales are the most popular method of leading business between
individuals over the Internet. Other C2C activities include, selling of
personal services such as astrology and medical advice, and the exchange of
files especially music and computer games.
Electronic funds transfer:
Electronic payment systems can be used to transfer funds between the

bank accounts of a business and its suppliers, or from a customer to the
business. The most popular payment method used by individual consumers
is the credit card, which requires the merchant to pay a commission to the
bank on each transaction.
An important issue in electronic commerce is the security of Internet
transactions. Data is commonly encrypted to reduce the weakness of credit
card transactions.
Secure Sockets Layer (SSL) and Secure Electronic Transaction (SET)
are two of the standards used to secure electronic payments on the Internet.
Secure sites usually have URLs that begin with https instead of the usual
http.
Some issues in e-commerce:
For e-commerce to succeed, companies need to make large

investments in hardware and telecommunications infrastructures that will be
up and running 100% of the time, and software that is easy to use and
reliable.
A number of early members in the e-commerce market suffered
financial losses because their technology was not able to handle the huge
numbers of transactions to be processed. Internet customers are often
impatient, and will move to a competing site if the response is too slow.
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Lecture 6 15/11/2015
Gaining the trust of customers can be difficult - the seller is often

unwilling to dispatch goods before payment, and the buyer may be unwilling
to pay before receiving the goods.
Social problems have also appeared, with children, gamblers and
shopping addicts enjoying free access to electronic commerce sites.
Since e-commerce supports global business transactions, it presents
the challenge of modifying web sites to suit people of different populations
and cultures (and even different languages).

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Lecture 6 15/11/2015

Information system applications:

1. Business support systems:

Different types of information systems are used by the various

Applications at Different Management Levels:

1. Transaction Processing Systems:

2. Management Information Systems:

3. Decision Support Systems

Collect data about Generate a number of

Implement the most Evaluate each of the

 DSS Database. This database contains current and historical data

 Model base. This is a library of analytical tools that can be used to

 User Interface. When a user requires a report or enquiry to be

4. Executive Information Systems:

2) A differentiation strategy: use of information systems to add value to

3) A niche marketing strategy: using information systems technology to

Artificial intelligence (AI) is the branch of computer science concerned

simulating aspects of it with a computer. There are four areas of AI research

Data Warehouses, Data Mining and OLAP:

1) Data warehouses: Business managers have only recently started to

2) On-line analytical processing: On-line analytical processing (OLAP)

3) Data mining: The huge amounts of information often make it very

2- Electronic commerce(E- commerce):

With the growth of the internet, electronic commerce is playing an

such as through the use of cellphones, this is referred to as mobile

Intranets provide a facility for members of an organization to chat, hold

Electronic funds transfer:

Electronic payment systems can be used to transfer funds between the

Some issues in e-commerce:

For e-commerce to succeed, companies need to make large

Gaining the trust of customers can be difficult - the seller is often

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