Chapter 1 Foundations of Information Systems in Business

What is an Information System? Communication networks Policies and procedures People Any organized combination of… Data resources Hardware and software Stores, retrieves, transforms, and disseminates information in an organization 2 -38

Early Information Systems l They weren’t computerized – Smoke signals – Library card catalogs – Book bag, day planner, and notebooks – Cash registers – Accounting ledger 3 -38

What Should Business Professionals Know? 4 -38

Fundamental Roles of IS in Business 5 -38

Trends in Information Systems 6 -38

What is E-Business? Using Internet technologies to empower… Business processes Electronic commerce Collaboration within a company Collaboration with customers, suppliers, other business stakeholders In essence, an online exchange of value 7 -38

How E-Business is Being Used 8 -38

E-Business Use Reengineering Internal business processes Enterprise collaboration Electronic commerce Support communication, coordination among teams and work groups Buying, selling, marketing, and servicing of products and services over networks 9 -38

Types of Information Systems Transaction processing Operations Process control Enterprise collaboration Updating of corporate databases Decision support systems Management Executive information systems 10 -38

Purposes of Information Systems 11 -38

Types of Operations Support Systems Transaction Processing Systems Record and process business transactions Sales, inventory, and accounting Process Control Systems Monitor and control physical processes Using sensors to monitor refinery processes Enterprise Collaboration Systems Enhance team/workgroup communication Email, video conferencing 12 -38

Two Ways to Process Transactions Batch Processing Online Processing Accumulate transactions over time and then process periodically Process all transactions immediately Ex: Banks process all checks in a batch at night Ex: A bank processes ATM withdrawals immediately 13 -38

Management Support Systems What do they do? Provide information and support for effective decision making by managers Management information systems Decision support systems Executive information systems 14 -38

Types of Management Support Systems l Management Information Systems (MIS) – Reports and displays – Example: daily sales analysis reports l Decision Support Systems (DSS) – Interactive and ad hoc support – Example: a what-if analysis to determine where to spend advertising dollars l Executive Information Systems (EIS) – Critical information for executives and managers – Example: easy access to actions of competitors 15 -38

Other Information Systems Expert Systems Knowledge Management Systems Provides expert advice Credit application advisor Creation, organization, dissemination of knowledge throughout company Intranet access to best business practices 16 -38

Other Information Systems Strategic Information Systems Functional Business Systems Helps get strategic advantage Shipment tracking, e-commerce Focus on operational and managerial application of basic business functions Accounting, finance, marketing 17 -38

IT Challenges and Opportunities 18 -38

Measuring IT Success l Efficiency – Minimizes cost, time, use of information resources l Effectiveness – Supports business strategies – Enables business processes – Enhances organizational structure and culture – Increases customer and business value 19 -38

Developing IS Solutions 20 -38

Challenges and Ethics of IT Application of IT Customer relationship management Human resource management Business intelligence systems Potential Harm Privacy infringement Inaccurate information Collusion 21 -38

Challenges and Ethics of IT Consumer boycotts Potential Risks Work stoppages Government intervention Codes of ethics Possible Responses Incentives Certification 22 -38

Ethical Responsibilities l What uses of IT might be considered improper or harmful to other individuals or society? l What is the proper business use of the Internet or a company’s IT resources? l How can you protect yourself from computer crime? 23 -38

IT Careers Economic downturns affecting all job sectors, including IT Negative Rising labor costs are pushing jobs to India, the Middle East, Asia-Pacific IT employment opportunities strong, with new jobs emerging daily Positive Frequent shortages of IT personnel Long-term job outlook is positive and exciting 24 -38

IT Careers Job increases will be driven by… Rapid growth in computer system design and related services The need to backfill positions Information sharing and client/server environments Need for those with problem-solving skills Falling hardware and software prices, which fuel expanded computerization of operations 25 -38

The IS Function Major functional area of business Dynamic and challenging career opportunity Important contributor to operational efficiency, employee productivity, morale, customer service/satisfaction Vital ingredient in developing competitive products and services in global marketplace Major source of information and support for decision making Key component of today’s networked business 26 -38

System Concepts: A Foundation Technology Hardware, software, data management, telecommunications networks Applications To support inter-connected information systems Development Finding ways to use information technology; includes designing basic information system components Management Emphasizes the quality, strategic business value, and security of an organization’s information systems 27 -38

What is a System? A system is… A set of interrelated components With a clearly defined boundary Working together To achieve a common set of objectives By accepting inputs and producing outputs In an organized transformation process 28 -38

Basic Functions of a System Input Processing Output Capturing and assembling elements that enter the system to be processed Transformation process converts input into output Transferring transformed elements to their ultimate destination 29 -38

Cybernetic System l All systems have input, processing, output l A cybernetic system, a self-monitoring, selfregulating system, adds … – Feedback… system performance data – Control… monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal 30 -38

A Cybernetic System 31 -38

A Business as a System 32 -38

Other System Characteristics l A system that is a component of a larger system is a subsystem l The larger system is an environment – Several systems may share one environment – Connected via a shared boundary (interface) l Types of systems… – Open and Adaptive 33 -38

Components of an IS 34 -38

Information System Resources People Hardware Software Information System Resources Networks Data 35 -38

Data Versus Information l Data are raw facts, typically about physical phenomena or business transactions – Specifically, objective measurements of the attributes of entities l Information is data that was converted into meaningful and useful context for end users – Aggregated, manipulated, and organized – Analyzed and evaluated – Placed in proper context for a human user 36 -38

Basic IS Activities Input Processing Output Storage Control 37 -38

Recognizing Information Systems l Business professionals should be able to look at an information system and identify… – The people, hardware, software, data, and network resources they use – The type of information products they produce – The way they perform input, processing, output, storage, and control activities 38 -38