Business Information System Examination Note

Perspective on Information Systems

Main components of information system

  • Input
  • Processing
  • Output
  • Feedback

Data vs Information

Process of transforming data into information

Dimensions of IS

  • Organization
  • Management
  • Information Technology

Organizational Dimension

  • People
  • Structure
  • Business function
  • Business process
  • Culture

Management Dimension

  • Set organizational strategy with management concerns
  • Allocate human and financial resources to lower the cost
  • By information technology to design, deliver new products to increase the sales
  • Re-creating organization when need to improve decision making

Technology Dimension

  • Computer hardware
  • Computer software
  • Data management
  • Networking and telecommunication
  • IT infrastructure

Business perspective on IS

  • Organizational and managerial nature
  • IS represents both solution
  • Challenge or problem posed by environment

Types of Business Information Systems

Transaction processing systems

  • Perform and record daily routine transactions necessary to conduct business (e.g. sales, cash deposits, payroll, credit)
  • Principal purpose is to track the flow of the transactions
  • Allow managers to monitor status of operations and relations with external environment
  • Server operational level, tasks, and resources
  • Serve predefined highly structured goals and decision making

Management Information Systems

  • Also named Business Intelligence Systems
  • Serve middle management
  • Basic transactions data from TPS are compressed
  • Provide reports on organization’s current performance
  • Not flexible and with little analytical capability
  • Provide answers to routine questions with predefined procedure

Decision Support Systems

  • Serve middle management
  • Focus on problems that are unique and rapidly changing
  • Use internal information from TPS and MIS
  • Also use information from external sources (e.g. stock prices)
  • Model driven DSS – e.g. voyage estimating systems
  • Data driven DSS – extract useful information from massive quantities of data

Executive Support Systems

  • Help senior management make decisions
  • Address non-routine decisions
  • Require judgement, evaluation and insight
  • Incorporate data about external events (e.g. new tax laws)
  • Also summarized information from internal MIS and DSS
  • Information is presented in digital dashboard on a single screen with graphs, charts of key performance indicators

Major Enterprise Applications

Enterprise Systems

  • Also known as Enterprise Resource Planning (ERP) systems
  • Integrates business processes into a single software system
  • Information previously fragmented in many areas now stored in a single comprehensive data repository
  • Can be used by different parts of business

Types of Business Information Systems

What is social business?

  • Social business – the use of social networking platforms
  • Including Facebook, Twitter, LinkedIn, etc.
  • Firms use them to engage with employees, customers, etc.
  • Enable workers to setup profiles, groups to follow updates
  • Goal is to deepen interactions inside and outside the firm
  • Result in enhancement of information sharing, innovation and decision making

Business benefits of social business

  • General belief – more “collaborative”, more successful firm
  • Global survey found investment in collaboration technology produced organizational improvements
  • Economic benefit of collaboration was significant
  • Prediction on social technologies used across enterprises could potentially raise the productivity of interaction workers

Evaluating and selecting collaboration and social software tools

Time / space collaboration matrix

  • Focuses on two dimensions of collaboration problem: time and space
  • Time is clearly an obstacle to collaboration on a global scale
  • Location also inhibits collaboration in global regional firms
  • Physical meeting is made difficult with the cost of travel, time limitations of managers

Michael Porter’s competitive force model

New Market Entrants

  • New companies are always entering the marketplace
  • Some industries have high barrier to entry, e.g. computer chip
  • New companies have several possible advantages:
    • Not locked into old plants and equipment
    • Often hire younger workers, less expensive and innovative
    • But little brand recognition

Unique features of E-commerce

Eight unique features of internet and web

  • Ubiquity
  • Global reach
  • Universal standards
  • Richness
  • Interactivity
  • Information density
  • Personalization / Customization
  • Social technology

Types of E-commerce

Mobile commerce (m-commerce)

  • another way of classifying electronic transactions in terms of the platforms used by participants
  • E-commerce transactions took place using several wireless mobile alternatives: smartphones, tablet computers
  • Both B2B and B2C e-commerce transactions can take place using m-commerce

E-commerce Payment Systems

Electronic wallets

  • Stores credit card, electronic cash, owner identification
    • Makes shopping easier and more efficient
      • Eliminates the need to repeatedly enter identification information in purchase
      • Works in many different stores for speedy checkout
    • HKMA granted Stored Value Facilities (SVF) licenses in 2016 to five existing stored-valued service providers.
      • Octopus & O! ePay
      • Apple Pay
      • MasterPass
      • Tap & Go
      • TNG Wallet

Faster Payment System (FPS)

  • Enhancing payment convenience and efficiency in Hong Kong
  • Providing an open platform for payment service providers
  • Strengthening financial stability in Hong Kong
  • Reinforcing Hong Kong’s status as international financial centre

Benefits of FPS

  • Safe – designated system under the Payments Systems and Stored Value Facilities Ordinance (PSSVFO)
  • 24/7 real time retail payment service
  • Multiple currencies – HKD and RMB
  • Payments across different banks and stored-value facilities made possible
  • Choice to input the recipient’s mobile phone number or email address rather than account number to send a payment
  • Direct debit payment authorized electronically

Roles and legal status of FPS

  • Settlement institution of Hong Kong dollar Faster Payment System (HKD FPS)
    • The Hong Kong Monetary Authority (HKMA) provides the book for settlement of HKD FPS payments.
  • Settlement institution of Renminbi Faster Payment System (RMB FPS)
    • Bank of China (Hong Kong) Limited provides the book for the settlement of RMB FPS payments.
  • System operator of HKD FPS and RMB FPS
    • Hong Kong Interbank Clearing Limited (HKICL) operates both the HKD FPS and RMB FPS.
  • Designation under the Payment Systems and Stored Value Facilities Ordinance in Hong Kong

Important Dimensions of Knowledge

Knowledge is a firm asset

  • Intangible
  • Creation from data, information, requires organizational resources
  • It is shared, experience network effects

Knowledge has different forms

  • May be explicit (documented) or tacit (residing in minds)
  • Know-how, craft, skill
  • How to follow procedure
  • Knowing why things happen (causality)

Knowledge has a location

  • Cognitive event (mental models and maps of individuals)
  • Both social and individual basis
  • “Sticky” (hard to move), situated (enmeshed in a firm’s culture), contextual (works only in certain situations)

Knowledge is situational

  • Conditional: knowing when to apply procedure
  • Contextual: knowing circumstances to use certain tool

Knowledge acquisition

  • Build corporate repositories of documents, reports, presentations and best practices
  • Extended to unstructured documents (e.g. e-mail)
  • Developing online expert networks for employees to search
  • Create new knowledge by discovering patterns in corporate data
  • Tacking data from transaction processing systems and external sources

Knowledge storage

  • Create of database
  • Document management systems – digitize, index, tag
  • Incorporating knowledge into culture and processes
  • Role of management:
    • Support development of planned knowledge storage systems
    • Encouraging corporate-wide schemas for indexing documents
    • Reward employees for taking time to update and store documents properly

Knowledge dissemination

  • Portals, e-mail, instant messaging, wikis, search engines
  • Added to existing array of collaboration tools for data sharing
  • How to discover in the sea of information and knowledge?
    • Training programs
    • Informal networks
    • Shared management experience
  • All the above help managers to focus their attention on important knowledge and information

Knowledge application

  • Organizational knowledge must become systematic part of management decision making
  • And become situated in systems for decision support
  • New knowledge must be built into firm’s business processes
  • Management supports this process by creating:
    • New business practices
    • New products and services
    • New markets

Intelligent Techniques

Case-based reasoning (CBR)

  • Past experiences of human specialists stored in database
  • Will be retrieved when new case encounters similar parameters
  • System searches stored cases and find closest fit and applies solutions of old case to new case
  • Successful and unsuccessful applications are grouped with case
  • Applying set of IF-THEN-ELSE rules extracted from human experts
  • Knowledge base is continuously expanded and refined by users
  • Can found CBR in – Medical diagnostic systems, customer support

Decision-making process


  • Discovering, identifying, and understanding the problems occurring in the organization
  • Why a problem exists, where and what effects having to firm


  • Identifying and exploring various solutions to the problem


  • Choosing among solution alternatives


  • Making chosen alternatives work and continuing to monitor

Stages in decision making

Executive Support Systems

Balanced scorecard method

  • Focusing on measurable outcomes on four dimensions:
    • Financial
    • Business process
    • Customer
    • Learning and growth
  • Key performance indicators (KPIs):
    • Measures proposed by senior management
    • To understand how well the firm is performing along given dimension

Moral dimensions of IS

Six Data Protection Principles (HK Cap.486, sch1)

  • DPP1 – Data collection principle
    • Personal data must be collected in a lawful and fair way, for a purpose directly related to a function/activity of data user
    • Data subjects must be notified of the purpose and the classes of persons to whom the data may be transferred
    • Data collected should be necessary but not excessive
  • DPP2 – Accuracy & retention principle
    • Practicable steps shall be taken to ensure personal data is accurate and not kept longer than is necessary to fulfill the purpose for which it is used
  • DPP3 – Data use principle
    • Personal data must be used for the purpose for which the data is collected or for a directly related purpose, unless voluntary and explicit consent with a new purpose is obtained from the data subject
  • DPP4 – Data security principle
    • A data user needs to take practicable steps to safeguard personal data from unauthorized or accidental access, processing, erasure, loss or use
  • DPP5 – Openness principle
    • A data user must take practicable steps to make personal data policies and practices known to the public regarding the types of personal data it holds and how the data is used
  • DPP6 – A data subject must be given access to his/her personal data and allowed to make corrections if it is inaccurate

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