HOOFDSTUK 1: BUSINESS INFORMATION SYSTEMS, STRATEGY AND GOVERNANCE
DEEL 1: WHAT IS A BUSINESS INFORMATION SYSTEM (BIS)
MOTIVATION
Companies under pressure: digital disruption
- Digital disruptors offer new opportunities to create added value
Business – IT alignment
- IT must join business: how to phase in new technologies?
- IT-people – marketing people: communication gap
- IT and business should closely interact
- Digital business strategy = fusion between IT and business strategy
Examples of how IT interrupts business models but also creates opportunities
- Analytics
o Amazon: recommendations based on your profile created by analytics
o Netflix: recommendations
- Internet of things
o Telematics: black box in your car monitors your driving behavior; allows insurer
provider to calculate your riskiness → insurance price
o Moocall: sensors monitor when cow is about to give birth
o Smart irrigation
- Drones
o Insurance: drones take pictures of sites after a disaster; compare the pictures
with the incoming insurance claims to prevent fraud
o Forest maintenance: detect which trees are about to die etc
o Package delivery
o Detection of poaching (Air Shepherd)
- Self driving cars: impacts the taxi industry
- Deepfake: AI can learn your voice, manners etc and create a model that can make ‘you’
say anything
Need for business leaders with great IT capabilities + everyone should be involved with IT
BUSINESS INFORMATION SYSTEMS
Data
- Raw observed facts or events
Information
- Processed data
- Takes place in a specific context: you add an interpretation to the data
,Knowledge
- Ability to perform certain tasks by combining data with own information and expertise
Metadata
- Data about data
- Extensible markup language (XML)
o Tag based language to describe metadata
o User can define their own tags
o XML: focusses on the content of the data
o HTML: focusses on the presentation of the data ( =/= metadata)
- Makes data more comprehensible to humans and computers
o Allows to ask specific questions about your data
o Allows to share information between companies easily
System
- Set of elements related to each other (and possibly to the external environment) and
joined for a specific purpose
- Elements
o Physical objects, energetic units etc
- Relations
o Time and distance, physical relations, cause/effect relations etc
- Purposes
o Delivery of services, production of finished goods etc
- Traffic system example
o Elements: road, vehicles, pedestrians etc
o Relations: distances between cities, allowed speed in certain areas etc
o Purposes: optimizing traffic flow, maximizing safety etc
- Description = looking at a system in a certain way
o Depends on who is looking and what their purpose is
o Examples
▪ Police officer monitors safety
▪ Taxi driver finds pick up hot spots
▪ Car driver drives from Leuven to Paris
- A system operates in an environment = universe of discourse
,Business information system
- Set of related components
- To collect, search, process, store and distribute information
- In order to support the coordination and control of the decision making process within
an organization
Business IT alignment
- Use BIS to realize business objectives
- Integrate existing and emerging IT into strategy, mission and goals of the company
BUSINESS INFORMATION SYSTEM TYPES
Strategic level
- Serves senior managers (group level)
- Long term decisions > 5 years
- Based on unstructured information
- Ex: mergers and acquisitions
Tactical (management) level
- Serves middle managers (project level)
- Mid long term decisions
- Ex: developing new products, adding features to existing products etc
Operational level
- Serves operational managers
- Daily operations and decisions
- Based on structured information
- Ex: storing information about what customers have bought
Sales and marketing
- Order processing
- Pricing
- Forecasts
Production and logistics
- Process control
- Planning
- Opening new production units
Finance and accountancy
- Registration of financial transactions
- Short term budgeting
, - Long term planning
Human resources
- Registration recruitments and dismissals
- Distribution of pay scales
- Planning personnel needs
Operational information systems
- Processes: structured, unambiguous, routinely
- Decisions: short term, frequent, little uncertainty
- Users: clerks (bediende), cashiers, sales assistants
- Information: easy to determine, independent of the individual, structured, from within
the organization
- Examples of IT systems that support operational activities
o OLTP: online transaction processing systems
▪ Payroll system
▪ Point of sale system (supermarket)
▪ Order entry system (deliveries)
▪ Financial transaction system (payments)
o ERP: enterprise resource planning
▪ Organization-wide coordination and integration of business processes
▪ Of-the-shelf modules based on best practices
▪ Plain vanilla: heavily standardized
▪ Or customized to specific business
▪ Vendors: SAP, Oracle/PeopleSoft, Odoo (open ERP)
▪ System: centralized database where various information feeds in and is
then extracted for different purposes
Tactical information systems
- Processes: less routinely
- Decisions: mid term, less often, more uncertainty
- Users: middle management
- Information: operational level + data warehouse, less easy to determine, dependent of
the individual and moment, less structured, need for external information increases
- Examples of IT systems that support tactical activities
o MIS: management information systems
▪ Input: transaction records, data warehouse
▪ Processing: routine reporting, low-level analysis
▪ Output: summary, exception reports
▪ Users: middle managers
▪ System: information → transaction processing systems → management
processing systems → managers: make mid-term decisions
o DSS: decision support systems
▪ Input: data – low volume and data warehouses, analytical models, data
analysis tools
▪ Processing: interactive, simulation
DEEL 1: WHAT IS A BUSINESS INFORMATION SYSTEM (BIS)
MOTIVATION
Companies under pressure: digital disruption
- Digital disruptors offer new opportunities to create added value
Business – IT alignment
- IT must join business: how to phase in new technologies?
- IT-people – marketing people: communication gap
- IT and business should closely interact
- Digital business strategy = fusion between IT and business strategy
Examples of how IT interrupts business models but also creates opportunities
- Analytics
o Amazon: recommendations based on your profile created by analytics
o Netflix: recommendations
- Internet of things
o Telematics: black box in your car monitors your driving behavior; allows insurer
provider to calculate your riskiness → insurance price
o Moocall: sensors monitor when cow is about to give birth
o Smart irrigation
- Drones
o Insurance: drones take pictures of sites after a disaster; compare the pictures
with the incoming insurance claims to prevent fraud
o Forest maintenance: detect which trees are about to die etc
o Package delivery
o Detection of poaching (Air Shepherd)
- Self driving cars: impacts the taxi industry
- Deepfake: AI can learn your voice, manners etc and create a model that can make ‘you’
say anything
Need for business leaders with great IT capabilities + everyone should be involved with IT
BUSINESS INFORMATION SYSTEMS
Data
- Raw observed facts or events
Information
- Processed data
- Takes place in a specific context: you add an interpretation to the data
,Knowledge
- Ability to perform certain tasks by combining data with own information and expertise
Metadata
- Data about data
- Extensible markup language (XML)
o Tag based language to describe metadata
o User can define their own tags
o XML: focusses on the content of the data
o HTML: focusses on the presentation of the data ( =/= metadata)
- Makes data more comprehensible to humans and computers
o Allows to ask specific questions about your data
o Allows to share information between companies easily
System
- Set of elements related to each other (and possibly to the external environment) and
joined for a specific purpose
- Elements
o Physical objects, energetic units etc
- Relations
o Time and distance, physical relations, cause/effect relations etc
- Purposes
o Delivery of services, production of finished goods etc
- Traffic system example
o Elements: road, vehicles, pedestrians etc
o Relations: distances between cities, allowed speed in certain areas etc
o Purposes: optimizing traffic flow, maximizing safety etc
- Description = looking at a system in a certain way
o Depends on who is looking and what their purpose is
o Examples
▪ Police officer monitors safety
▪ Taxi driver finds pick up hot spots
▪ Car driver drives from Leuven to Paris
- A system operates in an environment = universe of discourse
,Business information system
- Set of related components
- To collect, search, process, store and distribute information
- In order to support the coordination and control of the decision making process within
an organization
Business IT alignment
- Use BIS to realize business objectives
- Integrate existing and emerging IT into strategy, mission and goals of the company
BUSINESS INFORMATION SYSTEM TYPES
Strategic level
- Serves senior managers (group level)
- Long term decisions > 5 years
- Based on unstructured information
- Ex: mergers and acquisitions
Tactical (management) level
- Serves middle managers (project level)
- Mid long term decisions
- Ex: developing new products, adding features to existing products etc
Operational level
- Serves operational managers
- Daily operations and decisions
- Based on structured information
- Ex: storing information about what customers have bought
Sales and marketing
- Order processing
- Pricing
- Forecasts
Production and logistics
- Process control
- Planning
- Opening new production units
Finance and accountancy
- Registration of financial transactions
- Short term budgeting
, - Long term planning
Human resources
- Registration recruitments and dismissals
- Distribution of pay scales
- Planning personnel needs
Operational information systems
- Processes: structured, unambiguous, routinely
- Decisions: short term, frequent, little uncertainty
- Users: clerks (bediende), cashiers, sales assistants
- Information: easy to determine, independent of the individual, structured, from within
the organization
- Examples of IT systems that support operational activities
o OLTP: online transaction processing systems
▪ Payroll system
▪ Point of sale system (supermarket)
▪ Order entry system (deliveries)
▪ Financial transaction system (payments)
o ERP: enterprise resource planning
▪ Organization-wide coordination and integration of business processes
▪ Of-the-shelf modules based on best practices
▪ Plain vanilla: heavily standardized
▪ Or customized to specific business
▪ Vendors: SAP, Oracle/PeopleSoft, Odoo (open ERP)
▪ System: centralized database where various information feeds in and is
then extracted for different purposes
Tactical information systems
- Processes: less routinely
- Decisions: mid term, less often, more uncertainty
- Users: middle management
- Information: operational level + data warehouse, less easy to determine, dependent of
the individual and moment, less structured, need for external information increases
- Examples of IT systems that support tactical activities
o MIS: management information systems
▪ Input: transaction records, data warehouse
▪ Processing: routine reporting, low-level analysis
▪ Output: summary, exception reports
▪ Users: middle managers
▪ System: information → transaction processing systems → management
processing systems → managers: make mid-term decisions
o DSS: decision support systems
▪ Input: data – low volume and data warehouses, analytical models, data
analysis tools
▪ Processing: interactive, simulation
