1. Foundations of Information Systems in Business
Chapter 1
Foundations of Information Systems in Business

2. 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

3. 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

4. Foundation Concepts Vital component of successful businesses
Improves efficiency and effectiveness of business processes
Why study information systems and information technology?
Important to understand as any other functional area of the business
You might just as well ask why study accounting, finance, operations management, marketing, human resources, management.
Most business majors include a class in IS.
efficiency
doing the thing right
doing things in the most economical way (good input to output ratio)
effectiveness
doing the right thing
doing "right" things, i.e. setting right targets to achieve an overall goal (the effect)
Case 1: Value Through Business Intelligence
eCourier
Tracks customer satisfaction in real time
Immediate attention to complaints, problems
Allows GPS tracking of couriers and orders
Books 95% of deliveries online
Uses SeeWhy software to spot trends and anomalies
Optimizes system on an ongoing basis
Uses online surveys to retain customers
Responds to complaints and problems within 24 hours
Strengthens competitive position in rapidly changing marketplaces
Facilitates managerial decision making & workgroup collaboration

5. What is an Information System?

6. What is an Information System?
Communication networks
Policies and procedures
People
Any organized combination of…
Data resources
Hardware and software
In theory, IS could be paper based
Retrieves= recover
disseminates = spread, distribution of information
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
Almost everything is a system
One system can be made up of other systems or can be part of a bigger system
A computer is a system, like many others.  A system has 3 components:
Input
Process
Output
Take a cash machine for example.
It should be noted that a system does not necessarily need to contain a computer.  Delivering a letter is a system for example:
You input the letter (to the mailbox).
The system processes it.
Your recipient receives the output.
Stores, retrieves, transforms, and disseminates information in an organization

7. Early Information Systems
They weren’t computerized
Smoke signals
Library card catalogs
Book bag, day planner, and notebooks
Cash registers
Accounting ledger
Even today we have loads of IS that have nothing to do with information systems
THEY ALL transmit info.
Book bag with day planner, notebooks, that allows you organize inputs from lectures, presentations and discussions. Process them in to the output is homework and good exam grades.

8. What Should Business Professionals Know about IS?
Foundation Concepts: fundamental behavioral, technical, business and managerial concepts
Examples: general systems theory, competitive strategies. Covered in chapters 1, 2
Information Technology: Hardware, software, networks, data management and Internet-based technology
Business Applications: Major uses of the IS in the organization
Chapter 7: applications in functional areas, Chapter 8: electronic commerce applications and Chapter 9: decision making
Development Processes: How to plan, develop and implement IS to meet business opportunities
By both business professionals and IS specialists.
Management Challenges: The challenges of effectively and ethically managing IT
Managing IT at the end user, enterprise and global levels of a business. Chapter 11 is security challenges and Chapter 12 is how to manage IT in global businesses.

9. Fundamental Roles of IS in Business
Support business process: help record , do work faster, keep accurate information
Ex: IS used in the college, in the book store down stares.
Support business decision: help make better decisions
Ex: SIS can help college management decide to open or close sections,
Support strategies: help create a competitive advantage
Competitive advantage ميزة تنافسية
an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. the strategic advantage one business entity has over its rival entities within its competitive industry. Achieving competitive advantage strengthens and positions a business better within the business environment.
allowing it to generate greater sales or margins and/or retain more customers than its competition. There can be many types of competitive advantages including the firm's cost structure, product offerings, distribution network and customer support.
All roles interact with each others and they try to achieve integration in their systems so information can flow freely which add flexibility and more business support
Integrate = to unite with something else ; blend into a functioning or unified whole

10. Trends in Information Systems
Note that while IS has expanded, they are still doing the same basic things that they’ve been doing.
What has changed is: more integration of functions, greater connectivity across components, better use for maximum advantage of business and strategic opportunities
AI: computer systems to simulate the processes of problem solving and duplicate human brain functions.
Expert systems (ES) are a category of programs based on the  theory and methods of  artificial intelligence.
Strategic Information System SIS: such as ERP
Ad hoc :
is a Latin phrase meaning "for this". It generally signifies a solution designed for a specific problem or task, non-generalizable, and not intended to be able to be adapted to other purposes

11. What is E-Business? Using Internet technologies to empower…
Business processes
Electronic commerce
Collaboration within a company
Collaboration with customers, suppliers, other business stakeholders
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.
Exchange = give and take.
In essence, an online exchange of value

12. How E-Business is Being Used

13. The primary information technology infrastructure that support E-Business
Intranet
extranet

14. 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

15. Types of Information Systems
Operations Support Systems
Management Support Systems

16. Purposes of Information Systems

17. Operational Support Systems
Role\Uses of Operations Support System
Transaction processing
Process control
Support Enterprise collaboration
Updating of corporate databases
The role of operation support system pg.13

18. Types of Operations Support Systems
Transaction Processing Systems
Record and process data resulting from business transactions
Produce documents; Update organization database
Sales, inventory, and accounting systems
Process Control Systems
Monitor and control physical processes
Using sensors to monitor refinery processes
Transaction is an agreement, communication, or movement carried out between separate entities or objects, often involving the exchange of items of value, such as information, goods, services, and money.
A transaction is an event that generates or modifies data that is eventually stored in an information system.
Batch processing is not transaction processing. Batch processing involves processing several transactions at the same time, and the results of each transaction are not immediately available when the transaction is being entered; there is a time delay. Transactions are accumulated for a certain period (say for day) where updates are made especially after work.
Real-time and batch processing
There are a number of differences between real-time and batch processing. These are outlined below:
Each transaction in real-time processing is unique. It is not part of a group of transactions, even though those transactions are processed in the same manner. Transactions in real-time processing are stand-alone both in the entry to the system and also in the handling of output.
Real-time processing requires the master file to be available more often for updating and reference than batch processing. The database is not accessible all of the time for batch processing.
Real-time processing has fewer errors than batch processing, as transaction data is validated and entered immediately. With batch processing, the data is organised and stored before the master file is updated. Errors can occur during these steps.
Infrequent errors may occur in real-time processing; however, they are often tolerated. It is not practical to shut down the system for infrequent errors.
More computer operators are required in real-time processing, as the operations are not centralised. It is more difficult to maintain a real-time processing system than a batch processing system.
Enterprise Collaboration Systems
Enhance and support team/workgroup communication
, video conferencing

19. Example of a Process Control System
testing the temperature of food as it’s being prepared

20. Two Ways to Process Transactions
Batch Processing
Online Processing
Accumulate transactions over time and then process periodically
Ex: Banks process all checks in a batch at night
Process all transactions immediately
Ex: A bank processes ATM withdrawals immediately
Also called “real-time processing “

21. Management Support Systems
What do they do?
Provide information and support for effective decision making by managers
Management information systems
Decision support systems
Executive information systems

22. 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

23. Other Information Systems
Expert Systems
Knowledge-based systems that provides expert advice
Credit application advisor
Knowledge Management Systems
Knowledge-based systems that support the creation, organization, dissemination of knowledge throughout company
Intranet access to best business practices

24. Other Information Systems
Strategic Information Systems
Helps get strategic advantage
Shipment tracking, e-commerce
Functional Business Systems
Focus on support operational and managerial application of basic business functions
Strategic Information Systems
Support operations or management processes that provide a firm with strategic products that helps get strategic advantage
Accounting, finance, marketing

25. IT Careers Economic downturns affecting all job sectors, including IT
Negative
Rising labor costs are pushing jobs to India, the Middle East, Asia-Pacific
IT employment opportunities strong, with new jobs emerging daily
Positive
Frequent shortages of IT personnel
Long-term job outlook is positive and exciting

26. IT Careers

27. Job increases will be driven by…
IT Careers
Job increases will be driven by…
Rapid growth in computer system design and related services
The need to backfill positions
Information sharing and client/server environments
Need for those with problem-solving skills
Falling hardware and software prices, which fuel expanded computerization of operations

28. The IS Function Major functional area of business
Dynamic and challenging career opportunity
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)
Key component of today’s networked business

29. System Concepts: A Foundation
Technology
Hardware, software, data management, telecommunications networks
Applications
To support inter-connected information systems
Development
Finding ways to use information technology; includes designing basic information system components
Management
Emphasizes the quality, strategic business value, and security of an organization’s information systems

30. 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

31. Basic Functions of a System
Input
Capturing and assembling elements that enter the system to be processed
Processing
Transforma-tion process converts input into output
Output
Transferring transformed elements to their ultimate destination

32. Basic Functions of a System

33. 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.

34. A Cybernetic System

35. Other System Characteristics
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)
Example of an Adaptive system:
Digital cameras – Digital cameras use adaptive systems software to adjust various parameters depending on the environmental conditions.
Fraud detection – Banks and other financial institutes use adaptive systems for fraud detection (credit cards, transactions etc). The adaptive system learns the habits and style of the account holder and it can detect anomalies. Since the broader introduction of these technologies, credit card fraud has dropped, breaking a decade long trend of ever increasing rates.

36. Other System Characteristics
Example: Organizations such as businesses and government agencies are systems in the society (environment)
Open and Adaptive

37. A Business as a System

38. Components of an IS

39. Information System Resources
produce
People
Information System Resources
Hardware
Networks
Software
Data

40. 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 Specialists
e.g. Systems analysts, software developers, system operators.

41. Hardware Resources Machines and media
Examples of hardware in computer-based IS:
- Computer Systems. E.g. laptop
- Computer peripherals. E.g. keyboard

42. 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.

43. 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

44. 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

45. Network Resources Network Resources include: Communications media:
e.g. twisted pair wire, cables, cellular wireless technology.
Network infrastructure
e.g. modem, browser.

46. Basic IS Activities
Input
Processing
Output
Storage
Control

47. Recognizing Information Systems
Business professionals should be able to look at an information system and identify…
The people, hardware, software, data, and network resources they use
The type of information products they produce
The way they perform input, processing, output, storage, and control activities

48. Homework
Visit this website and figure out how does this supermarket reengineer (selling goods) process to make it online?
4 points
Typed

49. My Personal Web-page