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The Strategic Role Of

Information Systems

Information system (IS)

Set of interrelated components: collect,
manipulate, store, and disseminate data and
Provides feedback to meet an objective
Examples: ATMs, airline reservation systems,
course reservation systems
Information Concepts: Data, Information,
and Knowledge

Data: raw facts

Alphanumeric, image, audio, and video
Information: collection of facts
organized in such a way that they have
additional value beyond the value of the
facts themselves
Data, Information, and Knowledge

Figure 1.2: The Process of Transforming Data into

The Value of Information
Value of information is directly linked to
how it helps decision makers achieve their
organization’s goals
For example, value of information might be
measured in:
Time required to make a decision
Increased profits to the company
The Characteristics of Valuable

Table 1.2: Characteristics of Valuable Information

The Characteristics of Valuable

Table 1.2: Characteristics of Valuable Information

What Is an Information

Figure 1.3: The Components of an Information System

Computer-Based Information Systems

Figure 1.4: The Components of a Computer-Based

Information System
Traditional View of the Systems
Global System Configuration

Four types of system configuration:

Centralized Systems
Duplicated Systems
Decentralized Systems
Networked Systems
Business Information Systems

Figure 1.5: Business Information Systems

Types of Information Systems
Enterprise Systems
Enterprise Systems

Benefits: Challenges:

 Firm structure and  Difficult to build: Require

organization: One organization fundamental changes in the way
the business operates

 Management: Firm-wide  Technology: Require complex

knowledge-based management pieces of software and large
processes investments of time, money, and

 Technology: Unified platform  Centralized organizational

coordination and decision making:
Not the best way for the firms to
 Business: More efficient operate
operations and customer-driven
business processes
Management Information
Management information system
Organized collection of people,
procedures, software, databases, and
Provides routine information to
managers/decision makers
Primary focus is operational efficiency
Management Information Systems

Figure 1.10: Management Information System

Decision Support Systems

Decision support system (DSS)

Organized collection of people, procedures,
software, databases, and devices
Supports problem-specific decision making
Focus is on decision-making effectiveness
Decision Support Systems

Figure 1.11: Essential DSS Elements

Specialized Business Information Systems:
Knowledge Management, Artificial Intelligence,
Expert Systems, and Virtual Reality
 Knowledge management systems (KMSs): an
organized collection of people, procedures, software,
databases, and devices to create, store, share, and
use the organization’s knowledge and experience
 Artificial intelligence (AI): field in which the
computer system takes on the characteristics of
human intelligence
Artificial Intelligence

Figure 1.12: The Major Elements of Artificial Intelligence

Organizations and Information Systems

Figure 1.16: The Value Chain of a Manufacturing Company

Organizations and Information Systems

Supply chain management (SCM)

Determines required supplies, needed
quantities, processing, and shipment
Customer relationship management (CRM)
Helps company manage all aspects of customer
encounters, including marketing,
advertisement, sales, service, and maintaining
Specific Applications: Customer
Relationship Management (CRM)
Specific Applications: Supply Chain

How do information systems facilitate supply chain

Specific Applications: Collaborative Commerce

How do information systems facilitate collaborative

Performance-Based Information

Figure 1.18: Three Stages in the Business Use of

Information Systems
Roles, Functions, and Careers in the IS

Figure 1.19: The Three Primary Responsibilities of Information

Global Challenges in Information Systems

 Cultural challenges  Product and service

 Language challenges challenges
 Time and distance  Technology transfer
challenges issues
 Infrastructure  State, regional, and
challenges national laws
 Currency challenges  Trade agreements