Questions & Answers for mid-term examination

Chapter 1:
1- List and describe four reasons why information systems are so important for business
today?
Answer:
- Capital Management
- Foundation of doing business
- Productivity
- Strategic opportunity and advantage
- !escribe five technology and business trends that have enhanced the role of
information systems in today"s competitive business environment#
Answer# $chapter 1# page %&
- 'nternet growth and technology convergence
- (ransformation of the business enterprise
- )lobali*ation
- +ise of the information economy
- ,mergence of the digital firm
-- !escribe the capabilities of a digital firm. /hy are digital firms so powerful?
Answer#
- !igital firm is one in which nearly all of the organi*ation"s significant business
relationships with customers0 suppliers0 and employers are digitally enabled
and mediated.
- !igital firms are so powerful because all companies can use internet
technology for e-commerce transactions with customers and suppliers0 for
managing internal business process0 and for coordinating with suppliers and
other business partners. ,-commerce includes e-commerce as well the
management and coordination of the enterprise. 1nd also digital management
of 2ey corporate assets.
3- /hat is information system? !istinguish between a computer0 a computer program0
and an information system. /hat is the different between data and information?
Answer:
- 1n information system can be defined technically as a set of interrelated
components that collect0 process0 store and distribute information to support
decision ma2ing and control in an organi*ation.
- !ata# streams of raw facts representing events such as business transactions.
- 'nformation# clusters of facts meaningful and useful to human beings in the
processes such as ma2ing decisions.
4- /hat activities convert raw data to ma2e information in information systems? /hat is
their relationship to feedbac2?
Answer:
- (hree basic activities produce the information organi*ations need# 'nput0
processing and output.
- Feedbac2 is output returned to appropriate people or activities in the
organi*ation to evaluate and refine the input.
5- /hat is purpose of an information system from a business perspective? /hat role
does it play in the business information value chain?
Answer:
- From a business perspective0 information systems are part or a series of value-
adding activities for ac6uiring0 transforming0 and distributing information that
managers can use to improve decision ma2ing0 enhance organi*ational
performance0 and0 ultimately0 increase firm profitability.
- 7sing information systems effectively re6uires an understanding of the
organi*ation0 management0 and information technology shaping the systems.
1n information system creates value for the firm as an organi*ational and
management solution to challenges posted by the environment.
8- /hat is information systems literacy? 9ow does it differ from computer literacy?
Answer:
- 'nformation systems literacy# broad-based understanding of information
systems that includes behavioral 2nowledge about organi*ation0 management
and individuals using information systems as well as technical 2nowledge
about computers.
- Computer literacy# :nowledge about information technology0 focusing on
understanding how computer technologies wor2.
%- /hat are the organi*ational0 management0 and technology dimensions of information
systems?
Answer:
- ;rgani*ational dimension# people0 structure0 business processes0 politics0 and
culture.
- Management dimension# Sense ma2ers0 decision ma2ers0 planners0 innovators
or new processes0 and leaders $set agendas&.
- (echnology dimensions# 9ardware0 software0 storage0 communication
technology0 and networ2.
<- /hat are the 'nternet and the /orld /ide /eb? 9ow have they changed the roles
played by information systems in organi*ations?
1nswer#
- 'nternet is the world"s largest and most widely used networ2.
- /orld /ide /eb is a system with universally accepted standards for storing0
retrieving0 formatting0 and displaying information a networ2ed environment.
1=- /hy do some firms obtain greater value from their information systems than others?
/hat role do complementary assets and organi*ational and management capital play?
Answer:
- Some firms obtain greater value from their information systems than others
because>>>>>>>>>>>>>>>>>..
- +ole of complementary assets play# ?ew business processes0 Management
behavior0 ;rgani*ational culture and training.
- +ole of organi*ational and management capital play# supportive business
culture that values efficiency and effectiveness0 ,fficient business processes0
decentrali*ation of authority. 9ighly distributed decision rights and a strong
information system development team.
11- !istinguish between a behavioral and a technical approach to information systems in
terms of the 6uestions as2ed and the answers provided. /hat ma@or disciplines
contribute to an understanding of information systems?
Answer:
- (he technical approach to information systems emphasi*es mathematically
based models to study information systems. 1nd Aehavioral approach
concentrates on changes in attitudes0 management and organi*ational policy0
and behavior.
- Ma@or disciplines contribute to an understanding of information systems are#
B (echnical approaches# computer science0 management science and
;perations research.
B Aehavioral approaches# Psychology0 sociology and economics.
1- /hat are the 2ey management challenges involved in building0 operating and
maintaining information systems today?
Answer:
- (he information systems investment challenge# 9ow can organi*ation obtain
business value from their information system?
- (he strategic business challenge# /hat complementary assets are needed to
use information technology effectively?
- (he globali*ation challenge# 9ow can firm understand the business and system
re6uirements of a global economic environment?
- (he information technology infrastructure challenge# 9ow can organi*ation
develop an information technology infrastructure that can support their goals
when business conditions and technologies are changing so rapidly?
- ,thic and security# (he responsibility and control challenge# 9ow can
organi*ation ensure that their information systems are used in an ethically and
socially responsible.
Chapter 2:
1- 'dentify and describe the three levels of the organi*ational hierarchy. /hich types of
information systems serve each level?
Answer:
(he three levels of the organi*ational hierarchy#
- Senior Managers
- Middle Managers
- ;perational Managers
(ypes of information systems serve each level#
- ;perational-level systems# support operational mangers0 2eeping trac2 of the
elementary activities and transactions.
- Management-level systems# serve the monitoring0 controlling0 decision-
ma2ing0 and administrative activities of middle managers.
- Strategic-level systems# help senior management tac2le and address strategic
issues.
- List and briefly describe the ma@or types of system in organi*ation?
Answer:
- (ransaction Processing Systems $(PS&# are the basic business systems that
serve the operational level of the organi*ation. 1nd it is also a computeri*ed
system that performs and records the daily routine transactions necessary to
conduct business.
- Management 'nformation Systems $M'S&# serve the management level of the
organi*ation0 providing managers with reports and often-online access to the
organi*ation"s current performance and historical records and primarily serve
the functions of planning0 controlling0 and decision-ma2ing.
- !ecision-Support System $!SS&# also serve the management level or the
organi*ation. !SS help mangers ma2e decisions that are uni6ue0 rapidly
changing0 and not easily specified in advance.
- ,Cecutive Support System $,SS&# serve the strategic level of the organi*ation.
(hey address nonroutine decisions re6uiring @udgment0 evaluation0 and insight
because there is no agreed on procedure for arriving at a solution.
-- /hat are the five types of (PS in business organi*ations? /hat functions do they
perform? )ive eCample of each.
Answer:
Five types of (PS with eCample#
- SaleDMar2eting Systems $eg. Sale management0 customer service>&
- ManufacturingDProduction Systems $eg. Purchase order0 scheduling0>..&
- FinanceD1ccounting Systems $eg. )eneral ledger0 payroll>>.&
- 9uman +esources Systems $eg. Personnel records0 training0>>.&
- ;ther types of (PS that are uni6ue to a particular industry. $eg. 7niversity#
admissions0 grade records0>..&
3- /hat are the characteristics of M'S? 9ow do M'S differ from (PS? From !SS?
Answer:
- Characteristics of M'S# $'nputs# high volume transaction level dataE
Processing# simple modelsE ;utputs# summary reportsE 7sers# Middle
Manager&
- M'S differ from (PS# M'S serve at management level and (PS serve at
;perational level.
- M'S differ from ,SS# M'S serve at management level and ,SS serve at
strategic level.
4- /hat are the characteristics for !SS? 9ow do they differ from those of ,SS?
Answer:
- Characteristics for !SS# $'nputs# transaction level dataE Processing# 'nteractiveE
;utputs# !ecision analysisE 7sers# Professional and staff&
- !SS differ from ,SS# !SS serve at management level and ,SS serve at
strategic level and its characteristics are# 'nputs# 1ggregate dataE ;utputs#
pro@ectionsE 7sers# senior managers.
5- !escribe the relationship between (PS0 M'S0 and ,SS.
Answer:
- (he relationship between (PS0 M'S0 and ,SS# (PS are typically a ma@or
source of data for other systems0 data also be eCchanged to M'S to produce
reports0 whereas ,SS are primarily a recipient of date from lower-level
systems.
8- List and describe the information systems serving each of the ma@or functional areas
of a business.
Answer:
- Sale and Mar2eting Systems#
System !escription ;rgani*ational
Level
;rder processing ,nter0 process0 and trac2 orders ;perational
Pricing analysis !etermine prices for products
and services
Management
Sale and forecasting Prepare 4 years sales forecasts Strategic
- Manufacturing and Production Systems
System !escription ;rgani*ational
Level
Machine control Control the actions of machines
and e6uipment
;perational
Production planning !ecide when and how many
products should be produced
Management
Facilities location !ecide where to locate new
production facilities.
Strategic
- Finance F 1ccounting Systems
System !escription ;rgani*ational
Level
1ccount +eceivable (rac2s money owed the firm ;perational
Audgeting Prepares short-term budgets Management
Profit planning Plans long-term profits Strategic
- 9uman +esource Systems
System !escription ;rgani*ational
Level
(raining and
!evelopment
(rac2s employee training0
s2ills0 and performance
appraisals
;perational
Compensation analysis Monitors the rang and
distribution of employee wages0
salaries0 and benefits
Management
9uman +esource
planning
Plans the long-term labor force
needs of the organi*ation
Strategic
-
%- /hat is a business process? )ive two eCamples of processes for functional areas of
the business and one eCample of a cross functional process.
Answer:
- Ausiness process refer to sets of logically related activities for accomplishing a
specific business result0 and also refer to the uni6ue ways in which
organi*ation and management coordinate these activities.
- ,Cample for functional area of business process# $Finance and 1ccounting#
paying creditors0 creating financial statements and managing cash accounts&E
$9uman +esources# hiring employees0 evaluating employees" @ob performance
and enrolling employees in benefits plans&
- ,Cample of a cross functional process# ;rder fulfillment process $Sales
!epartment# )enerate order and submit orderE 1ccounting !epartment# Chec2
credit and approve credit and then Manufacturing F Production department#
1ssemble product and ship product0 and finally 1ccounting !epartment#
)enerate invoirce&.
<- /hy are organi*ations trying to integrate their business processes? /hat are the four
2ey enterprise applications for organi*ation-wide process integration?
Answer:
- ;rgani*ations are trying to integrate their business processes because they
want to enhance the performance of the organi*ations as a whole. (he system
ta2es advantage of corporate intranets and web technologies that enable the
efficient transfer of information within the firm and to partner firms. 1nd these
systems are inherently cross-level0 cross-functional0 and business process
oriented.
- (he four 2ey enterprise applications# ,nterprise Systems0 Supply Chain
Management Systems0 Customer +elationship Management Systems0 and
:nowledge Management Systems.
1=- /hat are enterprise systems? 9ow do they change the way an organi*ation wor2?
Answer:
- ,nterprise Systems0 also 2nown as enterprise resource planning systems0
provide a single information system for organi*ation-wide coordination and
integration of 2ey business processes.
- 'nformation that was previously fragmented in different systems can
seamlessly flow throughout the firm so that it can be shared by business
processes in manufacturing0 accounting0 human resources0 and other areas.
11- /hat are supply chain management systems# 9ow do they benefit business?
Answer:
- Supply chain management systems are more outward facing0 focusing on
helping the firm manage its relationship with suppliers to optimi*e the
planning0 sourcing0 manufacturing0 and delivery of products and services.
(heses systems provide information to help suppliers0 purchasing firms0
distributors0 and logistics companies coordinate0 schedule0 and control business
processes for procurement0 production0 inventory management0 and delivery or
products and services.
- Aenefit to business# !ecide when and what to produce0 store0 and moveE
+apidly communicate ordersE (rac2 the status of ordersE Chec2 inventory
availability and monitor inventory levelsE +educe inventory0 transportation0
and warehousing costsE (rac2 shipmentsE Plan production based on actual
customer demandE +apidly communicate changes in product design.
1- /hat are customer relationship management systems? 9ow do they benefit business?
Answer:
- Customer +elationship Management Systems focus on coordinating all of the
business processes surrounding the firm"s interactions with its customers in
sales0 mar2eting0 and service to optimi*e revenue0 customer satisfaction0 and
customer retention.
- 7sers can manage and evaluate mar2eting campaigns across multiple channels0
including e-mail0 direct mail0 telephone0 the web0 and wireless message.
1-- /hat is the role of 2nowledge management systems in the enterprise? /hat
organi*ational processes are supported by 2nowledge management applications?
Answer:
+ole of :nowledge Management Systems#
- Collects relevant 2nowledge and ma2e it available wherever and whenever it is
needed.
- Support business processes and management decisions
- 1lso lin2 the firm to eCternal sources of 2nowledge
- Support processes for ac6uiring0 storing0 distributing0 and applying 2nowledge.
;rgani*ational process that supported by :M applications#
- 1c6uiring 2nowledge
- Storing 2nowledge
- !istributing 2nowledge
- 1pply 2nowledge
13- /hat are the challenges posed by the eCistence of various types of information
systems in the enterprise? 9ow can these challenges be addressed?
Answer:
Challenges#
- 'ntegration and the whole firm view# )iven the different interests and
perspectives within a firm0 it is difficult to achieve consensus about the need
for the whole firm viewpoint.
- Management and employee training# (raining a large number of employees on
many systems in a large organi*ation involves commensurately large
investments.
- 1ccounting for the cost of systems and managing demands for systems# )iven
the large number of different types of systems in a firm0 and the large number
of people involved with using them. 't is a compleC tas2 to understand which
systems are truly necessary and productive with high returns on investment.
Challenges be addressed#
- 'nventory the firm"s information systems# !evelop a list of firm-wide
information re6uirements to give a -5=-degree view of the most important
information needs of the firm.
- ,mployee and Management education# ,nsure that you understand how much
training is re6uired.
- 1ccount for the costs and benefits# !evelop an accounting system for
information services firm-wide.