What is a BIS?
A business information system consists of interconnected components that collaborate to perform input, processing, output, storage, and control functions, transforming data into valuable information products.
These information products help support forecasting, planning, control, coordination, decision-making, and operational activities within an organization.
Systems theory
Systems theory: Offers a powerful tool for analyzing and enhancing business processes.
A system: a collection of interrelated components that work together towards a collective goal. The function of a system is to receive inputs and transform these into outputs.
System Characteristics
- Objective – Every component of a system should be interconnected and aligned with a common objective.
- Environment – The external factors influencing the system, such as customers, sales channels/distributors, suppliers, partners, government regulations, and economic conditions in the case of an organization.
- Boundary – Defines the system’s scope, serving as the interface between the system and its external environment.
- Subsystems exchange information through interfaces.
- Coupling refers to the degree of connection between different subsystems.
- Interdependence means that a change in one part of the system causes or results from changes in one or more other parts.
Resources that support BIS
- People resources: People resources include the users of an
information system and those who develop, maintain and
operate the system. - Hardware resources: The term hardware resources refers to all
types of machines, not just computer hardware. - Software resources: In the same way, the term software
resources does not only refer to computer programs and the
media on which they are stored, but the term can also be used
to describe the procedures used by people. - Communications resources: Resources are also required to enable different
systems to transfer data. - Data resources: Data resources describe all of the data that an organization has
access to, regardless of its form.
Advantages of computer processing
Speed: Computers can execute millions of instructions per second, enabling them to complete tasks rapidly.
Accuracy: Calculations performed by a computer are highly precise, ensuring accurate results.
Reliability: Computer-based information systems function continuously, 24/7, with interruptions only for maintenance or repairs.
Programmability: The ability to update or modify software gives computers a high level of flexibility. Even basic personal computers, for instance, can be used for tasks such as writing letters, generating cash flow forecasts, or managing databases.
Repetitive Tasks: Computer-based information systems are ideal for handling repetitive tasks that could lead to boredom or fatigue in humans. Implementing technology helps minimize errors and allows employees to focus on other responsibilities.
Limitations of computer-based processing
Judgment/Experience: Despite advancements in artificial intelligence and expert systems, computer-based information systems still lack the ability to solve problems using their own judgment and experience.
Flexibility: Generally, computer-based information systems struggle to adapt to unexpected situations and events.
Innovation: Computers do not possess the creativity inherent in human beings.
Intuition: Human intuition plays a crucial role in certain social situations.
Qualitative Information: Managers often make unstructured decisions based on recommendations from others, with their confidence in the individual influencing the outcome. However, business information systems (BIS) are incapable of processing or acting on such qualitative data.
Example of information systems
What information systems might be found in your newsagent or corner shop? For each system identified, list the people, hardware, communications, software and data resources involved.
E-business and e-commerce
Electronic Business (e-Business): The exchange of information through electronic means, both within an organization and with external stakeholders, to support various business processes.
Electronic Commerce (e-Commerce): All electronically facilitated information exchanges between an organization and its external stakeholders.
Buy-Side e-Commerce: E-commerce transactions that occur between a purchasing organization and its suppliers.
Sell-Side e-Commerce: E-commerce transactions that take place between a supplier organization and its customers.
Enterprise Systems
Enterprise Systems: Designed to support an organization’s business processes across functional boundaries, enterprise systems utilize internet technology to integrate information within the business and with external stakeholders, including customers, suppliers, and partners.
The four key elements of an enterprise system are:
- Enterprise Resource Planning (ERP): Focuses on internal production, distribution, and financial processes.
- Customer Relationship Management (CRM): Manages marketing and sales processes to enhance customer interactions.
- Supply Chain Management (SCM): Oversees the movement of materials, information, and customers throughout the supply chain.
- Supplier Relationship Management (SRM): Handles sourcing, purchasing, and warehousing of goods and services.
Introduction BIS acquisition
BIS Acquisition: The process of assessing and implementing a Business Information System (BIS).
Systems Development Lifecycle (SDLC): A structured approach that information system projects follow, consisting of sequential development phases.
SDLC Stages: Includes initiation, feasibility study, business requirements analysis, system design, system build and implementation, followed by review and maintenance.
Bespoke development
Bespoke Development: A custom-built information system (IS) developed from scratch by an IS professional to meet specific business requirements.
Benefits:
- Fully tailored to the organization’s needs
- Can provide a unique competitive advantage
Challenges:
- Cost: The most expensive method of developing an information system
- Time: Development can be time-consuming and subject to delays
- Quality: The software may contain bugs or require extensive testing
Off-the-shelf purchase
Off-the-Shelf Purchase: A method of acquiring a pre-written application that is used by multiple organizations.
Benefits:
- Time: Quick to purchase and implement
- Cost: More affordable due to economies of scale
- Quality: Typically stable and feature-rich
Drawbacks:
- May lack specific features required by the individual customer
- May necessitate changes to existing processes to align with the software’s functionality
Tailored Off-the-Shelf Purchase: An off-the-shelf application that has been customized through specific programming development or extensive configuration to meet the particular needs of the customer.
Component Off-the-Shelf Purchase: An off-the-shelf application that can be configured using pre-written modules, allowing for some customization without fully developing new code.
End-user-developed software
End-User-Developed Software: Software created by non-IS professionals, typically business users, rather than specialized IT professionals.
Benefits:
- Custom-built to meet the specific needs of end-users
- Often developed relatively quickly
Drawbacks:
- Maintenance can be challenging without proper technical expertise
- May not align with broader business objectives
- Quality could be compromised since it’s developed by non-IS professionals
Others factors affecting selection
- Size of the Organization: The scale of the organization can influence the choice of system, as larger organizations may require more complex or scalable solutions.
- Size of In-house IT Capability: The internal IT resources available can determine whether an organization is better suited to develop or maintain a system in-house or rely on external solutions.
- Complexity of Information System: The complexity of the system required, especially considering any specific issues related to the industry or market the company operates in.
- End-User Experiences: The technical skill level and familiarity of end-users with the system can impact the selection process, ensuring the system is user-friendly and meets their needs.
- Linkages to Other Applications/Data Sources: The ability to integrate the new system with existing applications or data sources is a critical factor in the selection process.
Summary-acquisition alternatives
System Development lifecycle
The process to build software typically follows a structured approach, often referred to as the Software Development Lifecycle (SDLC). Every project must go through this process to ensure successful development, deployment, and maintenance of the software. Here’s an overview of the typical SDLC process:
Initiation Phase:
The initiation phase marks the beginning of an information system (IS) development project. The main objective is to determine if the project is feasible and to set the groundwork for ensuring its success.
- Input: Creative thinking and/or a systematic evaluation of IS needs.
- Output: The idea to initiate a new information system.
Feasibility Assessment:
The feasibility assessment is an early-stage activity that evaluates whether the project is a viable business opportunity.
- Input: The idea for initiating a new information system.
- Output: A feasibility report with recommendations on whether to proceed with the project.
Systems Analysis:
In the systems analysis phase, the business requirements for the system are gathered through interviews, observations, and reviews of existing system documentation. It defines what the system will accomplish.
- Input: Terms of reference from the feasibility report that outline the requirements.
- Output: A detailed requirements specification that summarizes the system’s functions, supported by diagrams showing the information flow and required processes.
Systems Design:
The systems design phase outlines how the system will operate, including aspects such as user interfaces, program modules, security, database structure, and transactions.
- Input: The requirements specification.
- Output: A detailed design specification.
System Build:
The system build phase involves creating the software through programming. It includes writing code, constructing and populating the database, building release versions, and testing by both developers and end-users. Documentation and training are often prepared during this stage.
- Input: Requirements and design specifications.
- Output: A working software system, user guides, and system documentation.
System Implementation:
System implementation refers to the transition from the old system to the new one. It includes ensuring the new hardware and network infrastructure are in place, conducting system tests, and addressing human factors such as training staff who will use or be impacted by the new system.
- Input: A working system that has not yet been tested by users.
- Output: A fully operational information system that has been installed and signed off at all locations.
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