Principles of Information Systems Seventh Edition The value

Principles of Information Systems, Seventh Edition

• The value of information is directly linked to how it helps decision makers achieve the organization’s goals • Discuss why it is important to study and understand information systems • Distinguish data from information and describe the characteristics used to evaluate the quality of data Principles of Information Systems, Seventh Edition 2

• Models, computers, and information systems are constantly making it possible for organizations to improve the way they conduct business • Name the components of an information system and describe several system characteristics • Identify the basic types of models and explain how they are used Principles of Information Systems, Seventh Edition 3

• Knowing the potential impact of information systems and having the ability to put this knowledge to work can result in a successful personal career, organizations that reach their goals, and a society with a higher quality of life • List the components of a computer-based information system • Identify the basic types of business information systems and discuss who uses them, how they are used, and what kinds of benefits they deliver Principles of Information Systems, Seventh Edition 4

• System users, business managers, and information systems professionals must work together to build a successful information system • Identify the major steps of the systems development process and state the goal of each Principles of Information Systems, Seventh Edition 5

• Information systems must be applied thoughtfully and carefully so that society, business, and industry can reap their enormous benefits • Describe some of the threats to security and privacy that information systems and the Internet can pose • Discuss the expanding role and benefits of information systems in business and industry Principles of Information Systems, Seventh Edition 6

Introduction • Information system (IS) • A set of interrelated components that collect, manipulate, and disseminate data and information and provide feedback to meet an objective • Examples: ATMs, airline reservation systems, course reservation systems Principles of Information Systems, Seventh Edition 7

Information Concepts: Data Versus Information • Data: raw facts • Information: collection of facts organized in such a way that they have additional value beyond the facts themselves Principles of Information Systems, Seventh Edition 8

Table 1. 1: Types of Data Principles of Information Systems, Seventh Edition 9

Figure 1. 1: Defining and Organizing Relationships Among Data Creates Information Principles of Information Systems, Seventh Edition 10

Figure 1. 2: The Process of Transforming Data into Information Principles of Information Systems, Seventh Edition 11

Table 1. 2: Characteristics of Valuable Data Principles of Information Systems, Seventh Edition 12

Table 1. 2: Characteristics of Valuable Data (continued) Principles of Information Systems, Seventh Edition 13

System and Modeling Concepts • System: a set of elements or components that interact to accomplish goals • Components of a system • Input • Processing • Output • Feedback Principles of Information Systems, Seventh Edition 14

Figure 1. 3: Components of a System Principles of Information Systems, Seventh Edition 15

System Components and Concepts • System boundary: defines the system and distinguishes it from everything else (i. e. , the environment) • Configuration: the way system elements are organized or arranged • Systems can be classified as simple or complex, open or closed, stable or dynamic, adaptive or nonadaptive, and permanent or temporary Principles of Information Systems, Seventh Edition 16

Table 1. 3: Systems Classifications and Their Primary Characteristics Principles of Information Systems, Seventh Edition 17

System Performance and Standards • Efficiency: a measure of what is produced divided by what is consumed • Effectiveness: extent to which system attains its goals • System performance standard: a specific objective of a system Principles of Information Systems, Seventh Edition 18

System Variables and Parameters • System variable: quantity or item controlled by the decision maker • System parameter: value or quantity that cannot be controlled (e. g. , the cost of a raw material) Principles of Information Systems, Seventh Edition 19

Modeling a System • Model: an abstraction that is used to represent reality • Four major types of models: narrative (based on words); physical (tangible); schematic (graphic representation); mathematical (arithmetic representation) Principles of Information Systems, Seventh Edition 20

Figure 1. 6: Four Types of Models Principles of Information Systems, Seventh Edition 21

Figure 1. 7: The Components of an Information System Principles of Information Systems, Seventh Edition 22

Input, Processing, Output, Feedback • Input: activity of gathering and capturing raw data • Processing: converting or transforming data into useful outputs • Output: production of useful information, usually in form of documents and reports • Feedback: output used to make changes to input or processing activities Principles of Information Systems, Seventh Edition 23

Computer-Based Information Systems • Computer-based information system (CBIS) • A single set of hardware, software, databases, telecommunications, people, and procedures that are configured to collect, manipulate, store, and process data into information • Examples: a company’s payroll systems, order entry system, and inventory control systems Principles of Information Systems, Seventh Edition 24

Figure 1. 8: The Components of a Computer-Based Information System Principles of Information Systems, Seventh Edition 25

Business Information Systems • Most common types of information systems used in business organizations include: • Electronic and mobile commerce systems • Transaction processing systems • Management information systems • Decision support systems Principles of Information Systems, Seventh Edition 26

Electronic and Mobile Commerce • E-commerce: any business transaction executed electronically between parties • Parties involved include companies (B 2 B); companies and consumers (B 2 C); consumers and other consumers (C 2 C); businesses and the public sector; consumers and the public sector Principles of Information Systems, Seventh Edition 27

Transaction Processing Systems and Enterprise Resource Planning • Transaction: any business-related exchange, such as payments to employees, sales to customers, and payments to suppliers • Transaction processing system (TPS): an organized collection of people, procedures, software, databases, and devices used to record completed business transactions Principles of Information Systems, Seventh Edition 28

Figure 1. 11: A Payroll Transaction Processing System The inputs (numbers of employee hours worked and pay rates) go through a transformation process to produce outputs (paychecks) Principles of Information Systems, Seventh Edition 29

Enterprise Resource Planning • Enterprise resource planning (ERP) system: set of integrated programs that can manage a company’s entire set of business operations • ERP systems often coordinate planning, inventory control, production, and ordering Principles of Information Systems, Seventh Edition 30

Information and Decision Support Systems • Management information system (MIS): an organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers • Primary focus of an MIS is on operational efficiency Principles of Information Systems, Seventh Edition 31

Figure 1. 12: Functional Management Information Systems Principles of Information Systems, Seventh Edition 32

Management Information Systems • MIS outputs • Scheduled reports • Demand reports • Exception reports Principles of Information Systems, Seventh Edition 33

Decision Support Systems • Decision support system (DSS): an organized collection of people, procedures, software, databases, and devices used to support problem-specific decision making • Focus of a DSS is on decision-making effectiveness Principles of Information Systems, Seventh Edition 34

Figure 1. 13: Essential DSS Elements Principles of Information Systems, Seventh Edition 35

Specialized Business Information Systems • Artificial intelligence (AI) systems • Virtual reality systems • Expert systems • Other special-purpose business information systems Principles of Information Systems, Seventh Edition 36

Figure 1. 14: The Major Elements of Artificial Intelligence Principles of Information Systems, Seventh Edition 37

Systems Development • Systems development: the activity of creating or modifying existing business systems • Systems investigation: gaining a clear understanding of the problem to be solved or opportunity to be addressed • Systems analysis: defines the problems and opportunities of the existing system Principles of Information Systems, Seventh Edition 38

Figure 1. 17: An Overview of Systems Development Principles of Information Systems, Seventh Edition 39

Systems Development (continued) • Systems design: determines how new system will work to meet business needs defined during systems analysis • Systems implementation: creating or acquiring the various system components defined in design step, assembling them, and putting new system into operation • Systems maintenance and review: check and modify system so that it continues to meet changing business needs Principles of Information Systems, Seventh Edition 40

Information Systems in Society, Business, and Industry • Information systems must be implemented thoughtfully and carefully • Information systems face a variety of threats from unethical people Principles of Information Systems, Seventh Edition 41

Figure 1. 18: Attacks on Businesses and Other Organizations in One Year Principles of Information Systems, Seventh Edition 42

Figure 1. 19: The Cost and Cause of Computer Attacks Principles of Information Systems, Seventh Edition 43

Computer and Information Systems Literacy • Computer literacy: knowledge of computer systems and equipment and the ways they function • Information systems literacy: knowledge of how data and information are used Principles of Information Systems, Seventh Edition 44

Information Systems in the Functional Areas of Business • Finance and accounting (e. g. , forecast revenues and business activity; analyze investments; perform audits) • Sales and marketing (e. g. , product analysis; promotion analysis; price analysis) • Manufacturing (e. g. , process orders; develop schedules; control inventory) Principles of Information Systems, Seventh Edition 45

Information Systems in Industry • Airline industry (e. g. , Internet auction sites) • Investment firms (e. g. , analyze stocks and bonds) • Banks (e. g. , online check payment) • Transportation industry (e. g. , schedule trucks and trains) • Publishing companies (e. g. , analyze markets) Principles of Information Systems, Seventh Edition 46

Information Systems in Industry (continued) • Healthcare organizations (e. g. , track patient records) • Retail companies (e. g. , process customer orders) • Power management and utility companies (e. g. , monitor and control power generation and usage) • Professional services (e. g. , provide information on products and services to its consultants) Principles of Information Systems, Seventh Edition 47

Summary • Data: raw facts • Information: collection of facts organized in such a way that they have value beyond the facts themselves • System: a set of elements that interact to accomplish a goal • Components of a system: input, processing, output, and feedback • A model is an abstraction that is used to represent reality Principles of Information Systems, Seventh Edition 48

Summary (continued) • Computer-based information system (CBIS): a single set of hardware, software, databases, telecommunications, people, and procedures that are configured to collect, manipulate, store, and process data into information • Transaction processing system (TPS): an organized collection of people, procedures, software, databases, and devices used to record completed business transactions Principles of Information Systems, Seventh Edition 49

Summary (continued) • Management information system (MIS): an organized collection of people, procedures, software, databases, and devices used to provide routine information to managers and decision makers • Decision support system (DSS): an organized collection of people, procedures, software, databases, and devices used to support problem-specific decision making • Systems development: the activity of creating or modifying existing business systems Principles of Information Systems, Seventh Edition 50