Chapter 1 Foundations of Information Systems in Business

Learning Objectives 1.Importance of information systems and five needed areas of knowledge 2.Examples of business applications of information systems that support a firm’s business processes, managerial decision- making, and strategies for competitive advantage 3.Provide examples of several major types of information systems from your experiences with business organizations in the real world

Learning Objectives 4. Identify challenges a business manager might face in managing the successful and ethical development and use of information technology in a business 5. Components of real world information systems - the use of hardware, software, data, and networks to perform input, processing, output, storage, and control activities that transform data resources into information products

Foundation Concepts: Information Systems in Business What is the difference between IS and IT What is the difference between IS and IT Why Study IS and IT? Why Study IS and IT? An Essential Field of Study in Business An Essential Field of Study in Business Real World of Information Systems Real World of Information Systems Real World Case 1- Amazon.Com Real World Case 1- Amazon.Com

IT vs. IS IT – Information Technology IT – Information Technology “IT represents the ‘things’ that are available including hardware, software, procedures, communications, and techniques.” IS – Information Systems IS – Information Systems “IS has two parts: (A) the specific architecture of information technologies configured to meet a specific need and (B) the data, information, people and facilities.”

Foundation Concepts Management Challenges Information Technologies Business Applications Development Processes Management Challenges Information Systems Foundation Concepts Information Technologies Development Processes Business Applications Information Systems IS Framework for Business Management Challenges Business Applications Development Processes Management Challenges Information Systems Foundation Concepts Information Technologies Development Processes Business Applications Information Systems

Roles of IS in Business Support Business Processes and Operations Support Business Decision Making Support Strategies for Competitive Advantage

Trends in Information Systems Data Processing: 1950s – 1960s Electronic Data Processing Systems Management Reporting: 1960s – 1970s Management Information Systems Decision Support: 1970s – 1980s Decision Support Systems Electronic Business & Commerce: 1990s – 2000s Internet-Based E-Business and E- Commerce systems Strategic and End User Support: 1980s – 1990s End User Computing Systems Executive Information Systems Expert Systems Strategic Information Systems Expanding Participation of End Users and Managers in IS Expanding Roles of IS in Business and Management

Types of Information Systems Enterprise Collaboration Systems Management Information Systems Process Control Systems Transaction Processing Systems Decision Support Systems Executive Information Systems Operations Support Systems Management Support Systems Information Systems ProcessingBusinessTransactions Control of Industrial Processes Team and WorkgroupCollaboration PrespecifiedReporting for Managers InteractiveDecisionSupport Information Tailored for Executives Support of BusinessOperations Managerial Decision Making

Managerial Challenges of IT Customer Value/ Business Value The Business Enterprise Strategies/ Processes/ Structure/ Culture InformationTechnology Business/ITChallenges Business/ITDevelopments Business/ITGoals

Developing IS Solutions Investigate Analyze Design Implement Maintain

Challenges of Ethics and IT Ethical Responsibilities Ethical Responsibilities Be a Responsible End-User Be a Responsible End-User Applications of IT Potential Harms Potential Risks Possible Responses CustomerRelationshipManagement HumanResourcesManagement BusinessIntelligenceSystems Infringe- ments on Privacy InaccurateInformation Collusion CustomerBoycotts WorkStoppages GovernmentIntervention Codes of Ethics Incentives Certification

Systems Concepts What is a System? Any examples? Input Input Processing Processing Output Output Feedback Feedback Control Control

Systems Concepts Environment Environment Subsystem Subsystem Interface Interface Open Systems Open Systems Adaptive System Adaptive System Graphically…

Information System Model Stakeholders in the Business Environment The Community Competitors Financial Institutions Labor Unions Government Agencies Suppliers Customers Stockholders Management Information Systems Input Processing Output Control Feedback Economic Resources Business Resources Goods & Services

Components of an IS 1.People Resources - End Users - IS Specialists 2.Hardware - Machines - Media 3.Software - Programs - Procedures 4.Data Resources - Data and Knowledge Bases 5.Network Resources - Communications Media and Networks

Software Resources - System Software - Application Software - Procedures Data Resources - Data Bases - Knowledge Bases Data vs. Information Components of an IS

System Performance Measures and Standards Efficiency Efficiency A measure of what is produced divided by what is consumed. A measure of what is produced divided by what is consumed. Effectiveness Effectiveness A measure of the extent to which a system achieves its goals. A measure of the extent to which a system achieves its goals. Performance Standard Performance Standard A specific objective of the system. A specific objective of the system.

Data vs. Information Data: raw facts Data: raw facts Information: collection of facts organized in such a way that they have value beyond the facts themselves. Often this is a summary or special arrangement of the data. Information: collection of facts organized in such a way that they have value beyond the facts themselves. Often this is a summary or special arrangement of the data. Data Transformed into information Data Transformed into information Data and information are NOT the same thing Data and information are NOT the same thing

Hierarchy Knowledge Information Data Less More

Knowledge* “An awareness and understanding of a set of information and ways that information can be useful to support a specific task or reach a decision.” Types  Explicit knowledge consists of anything that can be documented, archived and codified, often with the help of IT.  Tacit knowledge is the know-how contained in people's heads *Source:

Types of Data DataRepresented by Alphanumeric (text) Data Numbers, letters, and other char Image Data Graphic images or pictures Audio Data Sound, noise or tones Video Data Moving images or pictures

Information Technologies Computer Hardware Computer Hardware Computer Software Computer Software Telecommunications Network Telecommunications Network Data Resource Management Data Resource Management

Roles of e-Business in Business Suppliers and Other Business Partners The Internet Extranets Company Boundary Consumers and Business Customers Extranets Supply chain management: Procurement, Distribution, and Logistics Customer relationship management: Marketing Sales Customer Service Engineering and Research Manufacturing and Production Accounting and Finance Intranets

Distributor of Electrical Products & Supplies Distributor of Electrical Products & Supplies Over 6,000 Employees Over 6,000 Employees 5 Distribution Centers 5 Distribution Centers 360 Branches Worldwide 360 Branches Worldwide Over 100,000 Customers Over 100,000 Customers New E-Business Ordering System New E-Business Ordering System Increased Sales and Cut Costs Increased Sales and Cut Costs Est. $12 million Savings Annually Est. $12 million Savings Annually WESCO International E-Business Sales and Supplier System Roles of e-Business in Business

Challenges of Ethics and IT Protection from Crime and Other Risks Protection from Crime and Other Risks Link Staffing: Network Security and Ethical Use Network Security and Ethical Use and Antivirus Filtering and Antivirus Filtering Limits on Size and Types of Attachments, Chatting Banned Limits on Size and Types of Attachments, Chatting Banned Use of Secure VPN Service Use of Secure VPN Service Tough Employee Standards Tough Employee Standards Termination for Violations Termination for Violations

Challenges of IT Careers Amazon.Com: Amazon.Com: IT Career Challenges Huge Demand for Systems Professionals Huge Demand for Systems Professionals On-line Customer Sales Support On-line Customer Sales Support Technology as a Means to an End Where the End is the Customer or Just Have Technical Skills Technology as a Means to an End Where the End is the Customer or Just Have Technical Skills Hard to Find a Combination of Skills Hard to Find a Combination of Skills Functioning in Unexplored Territory Functioning in Unexplored Territory

The IS Function A Major Functional Area of Business – Important to Success A Major Functional Area of Business – Important to Success Important Contributor to Operational Efficiency, Employee Productivity and Morale, and Customer Service and Satisfaction Important Contributor to Operational Efficiency, Employee Productivity and Morale, and Customer Service and Satisfaction A Major Source of Information for Decision Making A Major Source of Information for Decision Making

The IS Function Vital for Developing Competitive Products and Services to Gain Strategic Advantage Vital for Developing Competitive Products and Services to Gain Strategic Advantage Dynamic, Rewarding, and Challenging Career Opportunities Dynamic, Rewarding, and Challenging Career Opportunities Key Component of the Resources, Infrastructure, and Capabilities of Networked Business Enterprises Key Component of the Resources, Infrastructure, and Capabilities of Networked Business Enterprises

Information System Activities Input Data Resources - Source Document - User Interface Processing Data into Information Products Storage of Data Resources Control of System Performance

Summary 1.An IS Framework for Business Professionals Foundation Concepts - Fundamental Concepts of IS Foundation Concepts - Fundamental Concepts of IS Information Technologies – Hardware, Software, Data Management, and Networks Information Technologies – Hardware, Software, Data Management, and Networks Business Applications – Processes, Operations, Decision Making, Strategic/Competitive Advantage Business Applications – Processes, Operations, Decision Making, Strategic/Competitive Advantage Development Processes – Develop and Implement Business/IT Solutions Development Processes – Develop and Implement Business/IT Solutions Managerial Challenges – IT Uses for Top Performance and Business Value Managerial Challenges – IT Uses for Top Performance and Business Value

Summary 2.Business Roles of Info. Systems Three Vital Roles of IS – Three Vital Roles of IS – A - Support Business Processes B - Business Decision Making C - Strategic Competitive Advantage Management Support Systems Management Support Systems Management Information Systems Management Information Systems Decision Support Systems Decision Support Systems Executive Information Systems Executive Information Systems Expert Systems Expert Systems Knowledge Management Systems Knowledge Management Systems Strategic Information Systems Strategic Information Systems Functional & Cross-Functional Information Systems Functional & Cross-Functional Information Systems

Summary 3.Systems Concepts Interrelated Components – Common objectiveInterrelated Components – Common objective InputsInputs ProcessingProcessing OutputsOutputs FeedbackFeedback ControlControl

Summary 4.An Information System Model People People Hardware Hardware Software Software Data Data Networks Networks Storage Storage

Summary 5.IS Resources and Products Hardware Resources Hardware Resources Software Resources Software Resources - Programs - Procedures People Resources People Resources - Systems Specialists - Users

Amazon.Com Fundamental Roles of IS Including: Fundamental Roles of IS Including: Support of Operations, Decision Making and Strategic Competitive Advantages Support of Operations, Decision Making and Strategic Competitive Advantages Use of E-Business Environment Use of E-Business Environment Usage of Internet, Intranet and Extranet Technologies Usage of Internet, Intranet and Extranet Technologies Management Style of Decision Making Management Style of Decision Making Dependence on IT for Competitive Strategies Dependence on IT for Competitive Strategies 1- Could Amazon.com achieve business success without information technology? Why or why not?