Foundations of Information Systems in Business

Foundation Concepts
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

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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

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

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

A Cybernetic System

A Business as a System

Other System Characteristics

If a system is one of the components of a larger system, it is a subsystem
The larger system is an environment

Several systems may share the same environment

Some may be connected via a shared boundary, or interface

Components of an IS

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Information System Resources

People Resources
Specialists End users

Hardware Resources
Machines Media

Software Resources
Programs Procedures
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Information System Resources

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

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

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

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 Examples:
Sales data is names, quantities, and dollar amounts Sales information is amount of sales by product type, sales territory, or salesperson
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Types of Data

Table : Types of Data

The Value of Information

Value of information is directly linked to how it helps decision makers achieve their organizations goals For example, value of information might be measured in:
Time required to make a decision Increased profits to company

The Characteristics of Valuable Information

Table : Characteristics of Valuable Information

The Characteristics of Valuable Information (continued)

Table : Characteristics of Valuable Information

IS Activities
Input of data resources
Data entry activities

Processing of data into information

Calculations, comparisons, sorting, and so on

Output of information products

Messages, reports, forms, graphic images

Storage of data resources

Data elements and databases

Control of system performance

Monitoring and evaluating feedback
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What is an Information System?

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

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

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Information Technologies
Information Systems
All the components and resources necessary to deliver information and functions to the organization

Information Technologies
Hardware, software, networking, data management

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Fundamental Roles of IS in Business

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Trends in Information Systems

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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

Computer-Based Information Systems (continued)

Figure : The Components of a Computer-Based Information System

Purposes of Information Systems

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Types of Information Systems

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

Management Support Systems

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

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Operations Support Systems

What do they do?
Efficiently process business transactions Control industrial processes Support communications and collaboration Update corporate databases

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Types of Operations Support Systems

Transaction Processing Systems
Record and process business transactions Examples: sales processing, inventory systems, accounting systems

Process Control Systems

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

Enterprise Collaboration Systems

Enhance team and workgroup communication Examples: email, video conferencing
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Transaction Processing Systems

Figure : A Payroll Transaction Processing System

Two Ways to Process Transactions

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

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

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Types of Management Support Systems

Management Information Systems (MIS)
Reports and displays Example: daily sales analysis reports

Decision Support Systems (DSS)

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

Executive Information Systems (EIS)

Critical information for executives and managers Example: easy access to actions of competitors
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Management Information 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 operational efficiency

Management Information Systems

Figure : Management Information System

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

Decision Support Systems (continued)

Figure: Essential DSS Elements

Expert Systems
Give computer the ability to make suggestions and act like an expert in a particular field Allow organizations to capture and use the wisdom of experts and specialists The knowledge base contains the collection of data, rules, procedures, and relationships that must be followed to achieve value or the proper outcome Expert advice, Example: Investment Advisor Applications

Knowledge Management Systems

Knowledge management systems (KMSs): an organized collection of people, procedures, software, databases, and devices to create, store, share, and use the organizations knowledge and experience Support creation, organization, and dissemination of business knowledge throughout company Example: intranet access to best business practices

Artificial Intelligence

Figure: The Major Elements of Artificial Intelligence

IT Challenges and Opportunities

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Systems Development
Systems development: the activity of creating or modifying existing business systems A systems development project can be:
Done by people within the company Outsourced

To improve results of a systems development project, it is divided into several steps

Systems Development

Figure : An Overview of Systems Development

Developing IS Solutions

Systems Investigation and Analysis

Systems investigation: gain 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

Systems Design, Implementation, and Maintenance and Review

Systems design: how the new system will work to meet the business needs defined during systems analysis Systems implementation: creating or acquiring the various system components defined in the design step, assembling them, and putting the new system into operation Systems maintenance and review: check and modify the system so that it continues to meet changing business needs

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

Security, Privacy, and Ethical Issues in Information Systems and the Internet

The Cost and Cause of Computer Attacks

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 by individuals, groups, and organizations

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?

IT Careers

 Questions???