CH001

Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Foundations of Information Systems in

Business

Chapter 1

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Outline

Section 1:

Why study IS and IT?

What is an Information System?

What Should Business Professionals Know about IS?

Fundamental Roles of IS in Business

Trends in Information Systems

What is E-Business?

Types of Information Systems

IT Careers

The IS Functions

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Outline

Section 2:

System Concepts: A Foundation

What is a System?

Basic Functions of a System

Cybernetic System

A Business as a System

Other System Characteristics

Components of an IS

Basic IS Activities

Recognizing Information Systems

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Foundation Concepts

Improves efficiency and effectiveness of

business processes

Improves efficiency and effectiveness of

business processes

Facilitates managerialdecision making

& workgroup collaboration

Facilitates managerialdecision making

& workgroup collaboration

Strengthens competitive position in

rapidly changing marketplaces

Strengthens competitive position in

rapidly changing marketplaces

Vital component of successful businesses

Vital component of successful businesses

Why studyinformation systems and information technology?

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Any organizedcombination of…

Policies andprocedures

Data resources

Communicationnetworks

Hardware andsoftware

Stores, retrieves, transforms, and disseminates information

in an organization

People

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Early Information Systems

They weren’t computerized– Smoke signals– Library card catalogs– Book bag, day planner, and notebooks– Cash registers– Accounting ledger

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What Should Business Professionals Know about IS?

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Fundamental Roles of IS in Business

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Trends in Information Systems

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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

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The primary information technology infrastructure that support E-Business

Intranet

extranet

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How E-Business is Being Used

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E-Business Uses

Internal business

processes

Reengineering

Support communication,

coordination, coordination

among teams and work groups

Enterprise collaboration

Buying, selling,

marketing, and servicing of products

and services over networks

Electronic commerce

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Types of Information Systems

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Purposes of Information Systems

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Operational Support Systems

Role\Uses of Operations

Support System

Transaction processing

Process control

Support Enterprise collaboration

Updating of corporate databases

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Types of Operations Support Systems

Transaction Processing Systems

Record and process data resulting from business transactionsProduce documents; Update organization database

Sales, inventory, and accounting systems

Process Control Systems

Monitor and control physical processes

Using sensors to monitor refinery processes

Enterprise Collaboration Systems

Enhance and support team/workgroup communication

Email, video conferencing

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Example of a Process Control System

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Two Ways to Process Transactions

Batch Processing

Accumulate transactions over time

and then process periodically

Ex: Banks process all checks in a batch at night

Online Processing

Process all transactions immediately

Ex: A bank processes ATM withdrawals immediately

Also called “real-time processing “

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Management Support Systems

What do they do?

Provide information and support foreffective 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)– Provide critical information from MIS, DSS and other

sources tailored for executives and managers needs

– Example: easy access to actions of competitors

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Other Information Systems

Knowledge-based systems that provides expert advice

Credit application advisor

Expert SystemsExpert

Systems

Knowledge-based systems that support the creation, organization,

dissemination of knowledge throughout company

Intranet access to best business practices

Knowledge Management

Systems

Knowledge Management

Systems

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Other Information Systems

Helps get strategic advantage

Shipment tracking, e-commerce

Strategic Information

Systems

Strategic Information

Systems

Focus on support operational and managerial application of basic

business functions

Accounting, finance, marketing

Functional Business Systems

Functional Business Systems

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IT Careers

Economic downturns affecting all job sectors, including IT

Rising labor costs are pushing jobs to India, the Middle East, Asia-Pacific

NegativeNegative

IT employment opportunities strong, with new jobs emerging daily

Frequent shortages of IT personnel

Long-term job outlook is positiveand exciting

PositivePositive

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IT Careers

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IT Careers

The need to backfill positions

Information sharing andclient/server environments

Rapid growth in computer system design and related services

Need for those with problem-solving skills

Falling hardware and software prices, which fuel expanded computerization of operations

Job increases will be driven by…

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The IS Function

Major functional area of business

Important contributor to operational efficiency, employee productivity,

customer service/satisfaction

Vital ingredient in developing competitive

products and services in global marketplace (SIS)

Major source of information and support

for decision making (e.g. DSS)

Dynamic and challenging career opportunity

Key component of today’s networked

business

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System Concepts: A Foundation

Hardware, software, data management, telecommunications

networks

To support inter-connected information systems

Finding ways to use information technology; includes designing basic

information system components

Emphasizes the quality, strategic business value, and security of an organization’s information systems

Technology

Applications

Development

Management

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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

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InputInput

Capturing and

assembling elements that enter

the system to be

processed

ProcessingProcessing

Transforma-tion process

converts input into

output

OutputOutput

Transferring transformed elements to

their ultimate

destination

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Cybernetic System

All systems have input, processing, output

A cybernetic system, a self-monitoring, self-regulating system.

– Feedback data about the performance of a system. E.g. speed.

– Control… monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal and make the necessary adjustments.

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A Cybernetic System

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Systems exist and function in an environment containing other systems

Subsystem: is a system that is a component of a larger system.

The larger system is an environment

– Several systems may share one environment

– Systems may be connected via a shared boundary (interface)

Types of systems…– Open (e.g. Marketing)and Adaptive (e.g. DSS)

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Example: Organizations such as businesses and government agencies are systems in the society (environment)

Open and Adaptive

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A Business as a System

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Components of an IS

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Information System Resources

InformationSystem Resources

People

Information

Hardware Networks

Software Data

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People Resources

People are the essential ingredient for the successful operation of all IS

– End users: (users or clients) in all levels of org. e.g. customers,

managers.Knowledge workers

– IS Specialistse.g. Systems analysts, software developers, system

operators.

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Hardware Resources

Machines and media

Examples of hardware in computer-based IS:

- Computer Systems. E.g. laptop

- Computer peripherals. E.g. keyboard

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Software Resources

Example of software resources:

System software e.g. OS Microsoft

Application software e.g. Word processing

Procedures e.g. instructions for using a software package.

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Data Resources

Data resources are as important as other resources.

Highly protected

Data takes many forms and types

Data resources are accessed by:

- Databases

- Knowledge bases

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Data Versus Information

Data are raw facts, typically about physical phenomena or business transactions

– Specifically, objective measurements of the attributes of entities

Information is data that was converted into meaningful and useful context for end users

– The form is : Aggregated, manipulated, and organized

– The content is : Analyzed and evaluated– Placed in proper context for a human user

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Network Resources

Network Resources include:

1. Communications media:• e.g. twisted pair wire, cables, cellular wireless

technology.

2. Network infrastructure• e.g. modem, browser.

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Basic IS Activities

Output

Input

Processing

Storage

Control