SYSTEMS, DATA, AND INFORMATION A system is: A set of interrelated components That interact To achieve a goal

SYSTEMS, DATA, AND INFORMATION Most systems are composed of smaller subsystems . . . . . . and vice versa!

SYSTEMS, DATA, AND INFORMATION Every organization has goals. The subsystems should be designed to maximize achievement of the organization’s goals. Even to the detriment of the subsystem itself. EXAMPLE: The production department (a subsystem) of a company might have to forego its goal of staying within its budget in order to meet the organization’s goal of delivering product on time.

SYSTEMS, DATA, AND INFORMATION Goal conflict occurs when the activity of a subsystem is not consistent with another subsystem or with the larger system. Goal congruence occurs when the subsystem’s goals are in line with the organization’s goals. The larger and more complicated a system, the more difficult it is to achieve goal congruence.

SYSTEMS, DATA, AND INFORMATION The systems concept encourages integration (i.e., minimizing the duplication of recording, storing, reporting, and processing). Data are facts that are collected, recorded, stored, and processed by an information system. Organizations collect data about: Events that occur Resources that are affected by those events Agents who participate in the events

SYSTEMS, DATA, AND INFORMATION Information is different from data. Information is data that have been organized and processed to provide meaning to a user. Usually, more information and better information translates into better decisions.

SYSTEMS, DATA, AND INFORMATION However, when you get more information than you can effectively assimilate, you suffer from information overload. Example: Final exams week! When you’ve reached the overload point, the quality of decisions declines while the costs of producing the information increases.

SYSTEMS, DATA, AND INFORMATION Benefits of information - Cost of producing information Value of information Benefits of information may include: Reduction of uncertainty Improved decisions Improved ability to plan and schedule activities

SYSTEMS, DATA, AND INFORMATION Benefits of information - Cost of producing information Value of information Costs may include time and resources spent: Collecting data Processing data Storing data Distributing information to users

SYSTEMS, DATA, AND INFORMATION Benefits of information - Cost of producing information Value of information Costs and benefits of information are often difficult to quantify, but you need to try when you’re making decisions about whether to provide information.

SYSTEMS, DATA, AND INFORMATION Characteristics that make information useful: Relevance It reduces uncertainty by helping you predict what will happen or confirm what already has happened.

SYSTEMS, DATA, AND INFORMATION Characteristics that make information useful: Relevance Reliability It’s dependable, i.e., free from error or bias and faithfully portrays events and activities.

SYSTEMS, DATA, AND INFORMATION Characteristics that make information useful: Relevance Reliability Completeness It doesn’t leave out anything that’s important.

SYSTEMS, DATA, AND INFORMATION Characteristics that make information useful: Relevance Reliability Completeness Timeliness You get it in time to make your decision.

SYSTEMS, DATA, AND INFORMATION Characteristics that make information useful: Relevance Reliability Completeness Timeliness Understandability It’s presented in a manner you can comprehend and use.

SYSTEMS, DATA, AND INFORMATION Characteristics that make information useful: Relevance Reliability Completeness Timeliness Understandability Verifiability A consensus notion—the nature of the information is such that different people would tend to produce the same result.

SYSTEMS, DATA, AND INFORMATION Characteristics that make information useful: Relevance Reliability Completeness Timeliness Understandability Verifiability Accessibility You can get to it when you need it and in a format you can use.

SYSTEMS, DATA, AND INFORMATION Information is provided to both: External users Internal users

SYSTEMS, DATA, AND INFORMATION Information is provided to both: External users Internal users

SYSTEMS, DATA, AND INFORMATION External users primarily use information that is either: MANDATORY INFORMATION—required by a governmental entity, such as Form 10-K required by the SEC; or ESSENTIAL INFORMATION—required to conduct business with external parties, such as purchase orders.

SYSTEMS, DATA, AND INFORMATION In providing mandatory or essential information, the focus should be on: Minimizing costs. Meeting regulatory requirements. Meeting minimum standards of reliability and usefulness.

SYSTEMS, DATA, AND INFORMATION Information is provided to both: External users Internal users

SYSTEMS, DATA, AND INFORMATION Internal users primarily use discretionary information. The primary focus in producing this information is ensuring that benefits exceed costs, i.e., the information has positive value.

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

Information Technologies Information Systems All the components and resources necessary to deliver information and functions to the organization Could be paper based Information Technologies Hardware, software, networking, data management Our focus will be on computer-based information systems (CBIS)