Solving Business Problems with Information SystemsI. TOPIC OVERVIEWSection I, A Systems Approach to Problem Solving, describes and gives examples of the steps involved in using a systems approach to solve business problems.Section II, Developing Information Systems Solutions, describes the activities involved and products produced in each of the stages of the information systems development cycle, including computer-aided and prototyping approaches to systems development.II. LECTURE NOTES A Systems Approach to Problem Solving, describes and gives examples of the steps involved inusing a systems approach to solve business problems. A. The Scientific Method vs. The Systems ApproachThe Scientific MethodThe systems approach is based on the established problem-solving methodology known as the scientific method. The scientific method consists of five steps:1. Recognize phenomena in the real world.2. Formulate a hypothesis about the causes or effects of the phenomena.3. Test the hypothesis through experimentation.4. Evaluate the results of the experiments.5. Draw conclusions about the hypothesis.The Systems ApproachThe systems approach is a modification of the scientific method. It stresses a systematic process of problem solving. Problems and opportunities are viewed in a systems context. Studying a problem and formulating a solution becomes an organized system of interrelated activities, such as (Figure 1):1. Define a problem or opportunity in a systems context.2. Gather data describing the problem or opportunity3. Identify alternative solutions.4. Evaluate each alternative solution.5. Select the best solution.6. Implement the selected solution.7. Evaluate the success of the implemented solution.It is important to realize that the steps of the systems approach may overlap each other. Some activities can be used in more than one step of the process. The completion of activities in one step may extend into the performance of another. Sometimes it may be necessary to cycle back toa previously completed step for another try.The activities and steps of the systems approach are typically grouped into a smaller number of stages of problem solving:a. Understanding a problem or opportunity (steps 1 and 2).b. Developing a solution (steps 3 through 5).c. Implementing a solution (steps 6 and 7).B. Understanding a Problem or OpportunityTo solve a problem or pursue an opportunity requires a thorough understanding of the situation at hand. This implies viewing the problem/opportunity in a systematic fashion within a systems context.1. Defining Problems and Opportunities. Problems and opportunities must be identified when using the systems approach. Symptoms must be separated from problems. Symptoms are merely signals of underlying problems. a. A problem is a basic condition that causes undesirable results. b. An opportunity is a condition that presents the potential for desirable results.2. Gathering Data and Information. Data and information need to be captured to gain sufficient background into the problem or opportunity situation. In the context of a business systems problem, information gathering may encompass the following:a. Interviews with employees, customers, and managers.b. Questionnaires to appropriate end users in the organization.c. Personal observation or involvement in business operations.d. Examination of documents, reports, procedures manuals, and other documentation.e. Inspecting accounting and management reports to collect operating statistics, costdata, and performance results.f. Development, manipulation, and observation of a model of the business operations or systems affected by the problem or opportunity.Identifying Organizational Systems. In the systems approach, a problem or opportunity must be viewed in a systems context. To understand a problem or opportunity, you must understand both the organizational systems and environmental systems in which a problem or opportunity arises. You must have a systemic view of the situation.a. A Business as a System. A business faced with a problem or opportunity needs tobe viewed as an organizational system operating within a business environment (Figure 2). This concept helps us isolate and better understand how a problem oropportunity may be related to the basic system components of a business. b. Environmental Systems. A business is a subsystem of society and is surrounded by other systems in the business environment. Proper interrelationships with the economic, political, and social stakeholders within the environment should be maintained. These stakeholders that interact with a business need to be identified, to determine their effect on a problem or solution.c. Organizational Subsystems. Typically a business is subdivided into subdivisions that compose the organizational subsystem. i. These typically represent functional areas such as marketing, manufacturing, and finance, but can also represent geographic areas, product lines, distribution facilities, work groups, etc. Solving Business Problems with Information Systems, Page-2ii. Decomposition is the process of identifying the boundaries of subsystems within a business and determining the relationships between the subsystems. Those subsystems most affected by the problem or opportunity under consideration need to be identified.(1). Boundaries - for responsibility.(2). Relationships - between subsystems.d. Relationships Between Systems. A black box approach aids systems professionals in analyzing the relationships and interconnections between subsystems within the firm. In other words, the processing component remains a black box while inputs and outputs of subsystems are studied.i. Coupling - the process of determining how tight the function of subsystems are connected. e.g., JIT - requires a close association betweeninventory control and manufacturing.ii. Decoupling - the process of loosening the connections between systems. e.g., E-Mail may loosen communications connections within the organization. People can be more efficient by having differing avenues ofcommunication available to them.e. Evaluating Selected Systems. To understand a problem and solve it, you should try to determine if basic system functions are being properly performed. This should be done within a systems context by looking at inputs, processing, outputs, feedback, and control structures. Figure 3 illustrates this concept by example of a sales subsystem.i. Inputs.ii.