Business Environment and the AIS

The Business Firm as a System

System Characteristics of Business Firms

Objectives
Environment Constraints

Input-Process-Output
Feedback Controls

Subsystems

Major Subsystems

Major Subsystems

1. Organizational Structure
It shows how the tasks are divided, grouped and coordinated. An organizational chart is a diagram that depicts an organbizational structure.

Major Subsystems

2. Information System
The information system can be depicted as a group of related subsystems, such as the production information system, the accounting information system, and the marketing information system.

Major Subsystems

3. Operational Sytem
The operational system of a firm is the collection of primary physical processes.

The Operational System of a Manufacturing Firm

The Operational System of a Manufacturing Firm Facilities Manufacturing Firm Supporting Operations

Labor (human services)

Material from Supplier

Acquiring Materials

Producing Finished Goods

Storing Finished Goods

Shipping Finished Goods

Goods to Customer

Data AIS Funds

Information

Data and information flow Physical flows

Funds

Organizational Structures

Organizational Structures

Hierarchal Structure
The

activities and operations of a firm are subdivided, with the levels of management being arrayed vertically.

Organizational Structures

Matrix Structure
It

blends functional and project oriented structures.

Organizational Structures

Decentralized Structure
A

considerable degree of authority is delegated to middle-level and lower level managers within the structures.

Organizational Structures

Network Structure
It

represents an interconnected but nonhierarchal structure that is both flexible and fluid.

Operational System
An

operational system is a term used in data warehousing to refer to a system that is used to process the day-to-day transactions of an organization. These systems are designed so processing of day-to-day transactions is performed efficiently and the integrity of the transactional data is preserved.

Operational Systems vs. Data Warehousing

The

fundamental difference between operational systems and data warehousing systems is that operational systems are designed to support transaction processing whereas data warehousing systems are designed to support online analytical processing (or OLAP, for short).

 Based

on this fundamental difference, data usage patterns associated with operational systems are significantly different than usage patterns associated with data warehousing systems. As a result, data warehousing systems are designed and optimized using methodologies that drastically differ from that of operational systems.

Comparison Operational Systems Data Warehousing Systems

Operational systems are generally designed to support Data warehousing systems are generally designed to high-volume transaction support high-volume analytical processing (i.e. OLAP) processing with minimal back- and subsequent, often elaboratereport generation. end reporting. Data warehousing systems are generally subjectOperational systems are oriented, organized around business areas that the generally processorganization needs information about. Such subject oriented or process-driven, areas are usually populated with data from one or meaning that they are focused more operational systems. As an example, revenue on specific business processes may be a subject area of a data warehouse that or tasks. Example tasks include incorporates data from operational systems that billing, registration, etc. contain student tuition data, alumni gift data, financial aid data, etc.

Comparison Operational Systems

Operational systems are generally concerned with current data.

Data Warehousing Systems

Data warehousing systems are generally concerned with historical data.

Data within a data warehouse is generally non-volatile, Data within operational meaning that new data may be added regularly, but once systems are loaded, the data is rarely changed, thus preserving an generally updated ever-growing history of information. In short, data within regularlyaccording to need. a data warehouse is generally read-only. Operational systems are generally optimized to perform fast inserts and updates of relatively small volumes of data.

Data warehousing systems are generally optimized to perform fast retrievals of relatively large volumes of data.

Comparison

Operational Systems

Data Warehousing Systems

Operational systems are generally applicationspecific, resulting in a Data warehousing systems are generally integrated at a multitude of partially or layer above the application layer, avoiding data non-integrated systems redundancy problems. andredundant data (e.g. billing data is not integrated with payroll data). Operational systems generally require a nonData warehousing systems generally appeal to an endtrivial level of computing user community with a wide range of computing skills, skills amongst the end-user from novice to expert users. community.