Chapter 1 Foundations of Information Systems in Business

Why study information systems and information technology?

Vital component of successful businesses

Helps businesses expand and compete

Improves efficiency and effectiveness of business

processes

Facilitates managerial decision making and workgroup

collaboration

Types of OSS

Transaction Processing Systems

o
Record and process business transactions
o
Example:
sales
processing,
inventory
systems, accounting systems

Process Control Systems

o
Monitor and control physical processes
o
Example: using sensors to monitor chemical
processes in a petroleum refinery

Enterprise Collaboration Systems

o
Enhance
team
and
workgroup
communication
o
Example: email, video conferencing

What is a System?

A set of interrelated components

With a clearly defined boundary

Working together

To achieve a common set of objectives

What is an Information System?

An organized combination of
o
People
o
Hardware and software
o
Communication network
o
Data resources
o
Policies and procedures

This system
o
Stores,
retrieves,
transforms,
and
disseminates information in an organization

Two Ways to Process Transactions

Batch Processing
o
Accumulate transactions over time and
process periodically
o
Example: a bank processes all checks
received in a batch at night

Online Processing
o
Process transactions immediately
o
Example: a bank processes an ATM
withdrawal immediately

Information Technologies

Information Systems
o
All the components and resources necessary
to deliver information and functions to the
organization
o
Could be paper based

Information Technologies
o
Hardware,
software,
networking, data
management

Our focus will be on computer-based information

systems (CBIS)

Management System Do

Provide information and support for effective decision

making by managers
o
Management information systems
o
Decision support systems
o
Executive information systems
Types of Management Support Systems

Management Information Systems (MIS)

o
Reports and displays
o
Example: daily sales analysis reports

Decision Support Systems (DSS)

o
Interactive and ad hoc support
o
Example: a what-if analysis to determine
where to spend advertising dollars

Executive Information Systems (EIS)

o
Critical information for executives and
managers
o
Example: easy access to actions of
competitors

What Should Business Professionals Know?

Information Systems
o
Information Technology\foundation concepts
o
Development processes
o
Business Applications
o
Management Challenges
What is E-Business?

Using Internet technologies to empower

o
Business processes
o
Electronic commerce
o
Collaboration within a company
o
Collaboration with customers, suppliers, and
other business stakeholders

In essence, an online exchange of value

Other Information Systems

Expert Systems - provide expert advice

o
Example: credit application advisor

Knowledge Management Systems - support creation,

organization,
and
dissemination
of
business
knowledge throughout company
o
Example: intranet access to best business
practices

Strategic Information Systems - help get a strategic

advantage over customer
o
Example: shipment tracking, e-commerce
Web systems

Functional Business Systems - focus on operational

and managerial applications of basic business
functions
o
Example: accounting, finance, or marketing

E-Business Use

Reengineering
o
Internal business processes

Enterprise collaboration systems

o
Support communications, coordination and
coordination among teams and work groups

Electronic commerce
o
Buying, selling, marketing, and servicing of
products and services over networks
Types of Information Systems

Operations Support Systems

o
Efficiently process business transactions
o
Control industrial processes
o
Support communication and collaboration
o
Update corporate databases

Efficiently process business transactions

Control industrial processes
Support communications and collaboration
Update corporate databases

Measuring IT Success

Efficiency
o
Minimize cost, time, and use of information
resources

Effectiveness
o
Support business strategies
o
Enable business processes
o
Enhance
organizational
structure
and
culture
o
Increase customer and business value

Management Support Systems

o
Provide information as reports and displays
o
Give direct computer support to managers
during decision-making

Operating system do

Challenges and Ethics of IT

Application of IT
o
Customer relationship management
o
Human resources management
o
Business intelligence systems

Potential Harm
o
Infringements on privacy
o
Inaccurate information
o
Collusion

Potential Risks
o
Consumer boycotts
o
Work stoppages
o
Government intervention

Possible Responses
o
Codes of ethics
o
Incentives
o
Certification

Development: developing ways to use information

technology includes designing the basic components
of information systems
Management: emphasizes the quality, strategic
business value, and security of an organizations
information systems

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

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

Ethical Responsibilities

What uses of IT might be considered improper or

harmful to other individuals or society?

What is the proper business use of the Internet or a

companys IT resources?

How can you protect yourself from computer crime?

Information System Resources

People Resources
o
Specialists
o
End users

Hardware Resources
o
Machines
o
Media

Software Resources
o
Programs
o
Procedures

Data Resources
o
Product descriptions, customer records,
employee files, inventory databases

Network Resources
o
Communications media, communications
processors, network access and control
software

Information Resources
o
Management
reports
and
business
documents using text and graphics
displays, audio responses, and paper forms

IT Careers

Economic downturns have affected all job sectors,

including IT

Rising labor costs are pushing jobs to India, the

Middle East, and Asia-Pacific countries

However, IT employment opportunities are strong,

with new jobs emerging daily

Shortages of IT personnel are frequent

The long-term job outlook is positive and exciting

Figure
IT Careers

Job increases will be driven by

o
Rapid growth in computer system design
and related services
o
The need to backfill positions
o
Information
sharing
and
client/server
environments
o
The need for those with problem-solving
skills
o
Falling hardware and software prices, which
will fuel expanded computerization of
operations

The IS Function

A major functional area of business

An important contributor to operational efficiency,

employee productivity, morale, customer service and
satisfaction

A major source of information and support for

decision making

vital ingredient in developing competitive products

and services in the global marketplace

A dynamic and challenging career opportunity

A key component of todays networked business

Data are raw facts about physical phenomena or

business transactions
Information is data that has been converted into
meaningful and useful context for end users
Example:
o
Sales data is names, quantities, and dollar
amounts
o
Sales information is amount of sales by product
type, sales territory, or salesperson

IS Activities

System concepts help us understand

Technology: hardware, software, data management,

telecommunications networks

Applications: to support inter-connected information

systems

Input of data resources

o
Data entry activities
Processing of data into information
o
Calculations, comparisons, sorting,
and so on
Output of information products
o
Messages, reports, forms, graphic
images
Storage of data resources
o
Data elements and databases
Control of system performance
o Monitoring
and
evaluating
feedback