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1 1 - 1 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved.

2 1 - 2 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Foundations of Information Systems in Business Chapter 1

3 1 - 3 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. 1.Explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need. 2.Give examples to illustrate how the business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage. Learning Objectives

4 1 - 4 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives 3.Provide examples of several major types of information systems from your experiences with business organizations in the real world. 4.Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business.

5 1 - 5 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives 5.Provide examples of the components of real world information systems. Illustrate that in an information system, people use hardware, software, data and networks as resources to perform input, processing, output, storage, and control activities that transform data resources into information products.

6 1 - 6 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Why Study Information Systems? Information technology can help all kinds of businesses improve the efficiency and effectiveness of their business processes, managerial decision making, and workgroup collaboration, thus strengthening their competitive positions in a rapidly changing marketplace.

7 1 - 7 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Why Study Information Systems Internet-based systems have become a necessary ingredient for business success in today’s dynamic global environment. Information technologies are playing an expanding role in business.

8 1 - 8 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. What is an Information System? Any organized combination of people, hardware, software, communications networks, and data resources that stores, retrieves, transforms, and disseminates information in an organization.

9 1 - 9 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Information Systems vs. Information Technology Information Systems (IS) – all components and resources necessary to deliver information and information processing functions to the organization Information Technology (IT) – various hardware components necessary for the system to operate

10 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Types of Information Technologies Computer Hardware Technologies including microcomputers, midsize servers, and large mainframe systems, and the input, output, and storage devices that support them Computer Software Technologies including operating system software, Web browsers, software productivity suites, and software for business applications like customer relationship management and supply chain management

11 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Types of Information Technologies Telecommunications Network Technologies including the telecommunications media, processors, and software needed to provide wire-based and wireless access and support for the Internet and private Internet-based networks Data Resource Management Technologies including database management system software for the development, access, and maintenance of the databases of an organization

12 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Conceptual Framework of IS Knowledge

13 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Roles of IS in Business

14 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Trends in Information Systems

15 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. What is E-Business? Definition: The use of Internet technologies to work and empower business processes, electronic commerce, and enterprise collaboration within a company and with its customers, suppliers, and other business stakeholders. An online exchange of value.

16 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. E-Business Information Technology Infrastructure

17 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Enterprise Collaboration Systems Definition: Involve the use of software tools to support communication, coordination, and collaboration among the members of networked teams and workgroups.

18 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. What is E-Commerce? Definition: The buying and selling, and marketing and servicing of products, services, and information over a variety of computer networks.

19 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Types of Information Systems

20 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Operation Support Systems Definition: Information systems that process data generated by and used in business operations Goal is to efficiently process business transactions, control industrial processes, support enterprise communications and collaboration, and update corporate databases

21 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Examples of Operations Support Systems Transaction Processing Systems (TPS) – process data resulting from business transactions, update operational databases, and produce business documents. Process Control Systems (PCS) – monitor and control industrial processes. Enterprise Collaboration Systems – support team, workgroup, and enterprise communications an collaboration.

22 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. A Transaction Processing System Example

23 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Management Support Systems Definition: Information systems that focus on providing information and support for effective decision making by managers

24 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Management Support Systems Management Information Systems (MIS) – provide information in the form of pre-specified reports and displays to support business decision making. Decision Support Systems (DSS) – provide interactive ad hoc support for the decision making processes of managers and other business professionals. Executive Information Systems (EIS) – provide critical information from MIS, DSS, and other sources tailored to the information needs of executives.

25 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. A Decision Support System Example

26 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Operational & Managerial IS Expert Systems – provide expert advice for operational chores or managerial decisions Knowledge Management Systems – support the creation, organization, and dissemination of business knowledge to employees and managers

27 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. IS Classifications by Scope Functional Business Systems – support basic business functions Strategic Information Systems – support processes that provide a firm with strategic products, services, and capabilities for competitive advantage Cross-functional Information Systems – integrated combinations of information systems

28 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Measures of Success Efficiency Minimize costs Minimize time Minimize the use of information resources Effectiveness Support an organization’s business strategies Enable its business processes Enhance its organizational structure and culture Increase the customer business value of the enterprise

29 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Developing IS Solutions

30 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. The Systems Development Lifecycle

31 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. What is a System? Definition: A group of interrelated components, with a clearly defined boundary, working together toward a common goal by accepting inputs and producing outputs in an organized transformation process.

32 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. System Components Input – capturing and assembling elements that enter the system to be processed Processing – transformation steps that convert input into output Output – transferring elements that have been produced by a transformation process to their ultimate destination

33 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Cybernetic Systems Definition: a self-monitoring, self-regulating system. Feedback – data about the performance of a system Control – monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal

34 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Example of a Cybernetic System

35 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. A Business System

36 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. IS Resources & Activities

37 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Information System Resources People – end users and IS specialists Hardware – physical devices and materials used in information processing including computer systems, peripherals, and media Software – sets of information processing instructions including system software, application software and procedures

38 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Information Systems Resources (con’t) Data – facts or observations about physical phenomena or business transactions Network – communications media and network infrastructure

39 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Data vs. Information Data – raw facts or observations typically about physical phenomena or business transactions Information – data that have been converted into a meaningful and useful context for specific end users

40 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Network Resources Communications Media – examples include twisted-pair wire, coaxial and fiber-optic cables, microwave, cellular, and satellite wireless technologies Network Infrastructure – examples include communications processors such as modems and internetwork processors, and communications control software such as network operating systems and Internet browser packages.

41 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Information Systems Activities Input of Data Resources Processing of Data into Information Output of Information Products Storage of Data Resources Control of System Performance

42 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Recognizing Information Systems Fundamental Components of IS People, hardware, software, data and network resources used Types of information products produced Input, processing, output, storage and control activities performed

43 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Summary There is no longer a distinction between an IT project and a business initiative. Information systems are an important contributor to operational efficiency, employee productivity and morale, and customer service and satisfaction.

44 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Summary Information systems are a major source of information and support needed to promote effective decision making by managers and business professionals. Information systems can be categorized based on their intended purpose.

45 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. Summary Managing and using information systems can pose several challenges including the development process and ethical responsibilities.

46 Copyright © 2006, The McGraw-Hill Companies, Inc. All rights reserved. End of Chapter Chapter 1


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