Presentation on theme: "Foundations of Information Systems in Business"— Presentation transcript:
1 Foundations of Information Systems in Business Chapter OneFoundations of Information Systems in Business
2 Learning ObjectivesUnderstand the concept of a system and how it relates to information systems.Explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need.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.
3 Learning ObjectivesProvide examples of several major types of information systems from your experiences with business organizations in the real world.Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business.
4 Learning ObjectivesProvide 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.Demonstrate familiarity with the myriad of career opportunities in information systems.
5 Why study Information Systems and Information Technology? Vital component of successful businessesHelps businesses expand and competeBusinesses use IS and ITTo improve efficiency and effectiveness of business processesFor managerial decision makingFor workgroup collaborationYou might just as well ask why study accounting, finance, operations management, marketing, human resources, management.Most business majors include a class in IS.
6 What is a system? A system Is a set of interrelated components With a clearly defined boundaryWorking together to achieve a common set of objectivesAlmost everything is a systemOne system can be made up of other systems or can be part of a bigger system
7 What is an Information System? An organized combination ofPeopleHardwareSoftwareCommunications networksData resourcesPolicies and proceduresThat stores, retrieves, transforms, and disseminates information in an organizationThis is a simple definition that we will expand upon laterWhat’s an example?Smoke signals to transmit informationCard catalogs in a libraryBook bag with day planner, notebooks, that allows you organize inputs from lectures, presentations and discussions. The output is homework and good exam gradesCash register at restaurantOther examples?
8 Information System (IS) versus Information Technology (IT) IS is all the components and resources necessary to deliver information and functions to the organizationIT is hardware, software, networking and data managementIn theory, IS could be paper basedBut we will focus on Computer-Based Information Systems (CBIS)Definition of IS from prior slide:An organized combination ofPeopleHardwareSoftwareCommunications networksData resourcesPolicies and proceduresThat stores, retrieves, transforms, and disseminates information in an organizationIn theory, an IS could be pencil and paper based
9 IS Knowledge Framework for Business Professionals
10 What should a Business Professional know about IS? Foundation Concepts: fundamental behavioral, technical, business and managerial conceptsInformation Technology: Hardware, software, networks, data management and Internet-based technologyBusiness Applications: Major uses of the IS in the organizationDevelopment Processes: How to plan, develop and implement IS to meet business opportunitiesManagement Challenges: The challenges of effectively and ethically managing ITRefers back to figure 1.2 on prior slideFoundation Concepts: Examples: general systems theory, competitive strategies. Covered in chapters 1, 2Information Technology: Covered in chapters 3-6Business Applications: Chapter 7: applications in functional areas, Chapter 8: electronic commerce applications and Chapter 9: decision makingDevelopment Processes: By both business professionals and IS specialists. Chapter 10.Management Challenges: 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.
11 Fundamental Roles of IS in Business Support of business processes and operations.Support of decision making by employees and managers.Support of strategies for competitive advantage.
12 What does IS do for a business? Examples of business processes: record purchases, track inventory, pay employees, etc. Business would stop without such IS.Examples of decision making: what lines of merchandise need to be added, what kind of investment required.Examples of competitive advantage: put kiosk in store to connect to e-commerce website. Help gain advantage over competitor without such a kiosk.
13 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
14 What is E-business? The use of Internet technologies to work and empower business processes, electronic commerce, and enterprise collaborationwithin a company and with its customers, suppliers, and other business stakeholders.An online exchange of value.
16 E-business use Reengineer internal business processes Enterprise collaboration systems: support communications, coordination and collaboration among teams and work groups, e.g., virtual teamsElectronic commerce: buying, selling, marketing and servicing of products and services over computer networks
18 Operations support systems What are they?Efficiently process business transactionsControl industrial processesSupport communications and collaborationUpdate corporate databases
19 Types of Operations Support Systems Transaction Processing SystemsRecord and process data from business transactionsExamples: sales processing, inventory systems, accounting systemsProcess Control SystemsMonitor and control physical processesExample: in a petroleum refinery use sensors to monitor chemical processesEnterprise Collaboration SystemsEnhance team and work group communicationsExamples: , videoconferencing
20 Two ways to process transactions Batch Processing:Accumulate transactions over time and process periodicallyExample: a bank processes all checks received in a batch at nightOnline Processing:Process transactions immediatelyExample: a bank processes an ATM withdrawal immediately
21 Management Support Systems What are they?Provide information and support for effective decision making by managers
22 Types of Management Support Systems Management Information Systems (MIS)Provide reports and displays to managersExample: daily sales analysis reportsDecision Support Systems (DSS)Provide interactive ad hoc support for decision makingExample: A what-if-analysis to determine where to spend advertising dollarsExecutive Information Systems (EIS)Provide critical information for executives and managersExample: easy access to actions of competitors
23 Operational or Management Systems Expert SystemsProvide expert adviceExample: credit application advisorKnowledge Management SystemsSupport creation, organization and dissemination of business knowledge throughout companyExample: Intranet access to best business practicesSupport either operations or management applications
24 Classifications of IS by scope Functional business systemsFocus on operational and managerial applications of basic business functionsExamples: support accounting, finance or marketingStrategic information systemsHelp get a strategic advantage over its customersExamples: shipment tracking, e-commerce web systemsCross-functional information systemsSystems that are combinations of several types of information systemsProvide support for many functionsIn reality most systems are Cross-functional
26 Measuring success of an IS EfficiencyMinimize cost, time and use of information resourcesEffectivenessSupport business strategiesEnable business processesEnhance organizational structure and cultureIncrease the customer and business valueWhat’s the difference between Efficiency and Effectiveness?
29 Ethical responsibilities What uses of IT might be considered improper or harmful to other individuals or society?What is the proper business use of the Internet or a company’s IT resources?How can you protect yourself from computer crime?What uses of IT might be considered improper or harmful to other individuals or society? Improper uses might include collecting data that you don’t need, not protecting personal customer data, etc.What is the proper business use of the Internet or a company’s IT resources? Is it proper to use the company’s computers to surf the web, send personal , etc.How can you protect yourself from computer crime? Virus and spam protection, never replying to phishing, etc.
30 Challenges of IT Careers Outsourcing of basic programming to India, the Middle-East and Asia-Pacific countriesStrong employment opportunities in other areas in ISShortage of qualified IS personnelLong-term job outlook positive and exciting
32 Job growth Among the fastest growing occupations through 2012 Systems Analyst,Database administrators,Other managerial-level positionsNetwork specialistsInformation security
33 IS Function represents Major functional area of businessImportant contributor to operational efficiency, employee productivity, morale, customer service and satisfactionMajor source of information and support for effective decision makingVital ingredient in developing competitive products and services in the global marketplaceDynamic and challenging career opportunityKey component of today’s networked business
34 What is a system? A system Is a set of interrelated components With a clearly defined boundaryWorking together to achieve a common set of objectivesBy accepting inputs and producing outputs in an organized transformation processRepeating definition from earlier but adding accepting inputs, producing outputs, and transformation
35 Systems have three basic functions: Input involves capturing and assembling elements that enter the system to be processedProcessing involves transformation process that convert input into outputOutput involves transferring elements that have been produced by the transformation process to their ultimate destination
36 Cybernetic system All systems have input, processing and output A cybernetic system, a self-monitoring, self-regulating system, adds feedback and control:Feedback is data about the performance of a systemControl involves monitoring and evaluating feedback to determine whether a system is moving towards the achievement of its goal
37 A Cybernetic systemA cybernetic system has both feedback and control. A home thermostat accepts the desired room temperature as input and sends a message to fire the furnace. The thermostat provides feedback to shut the system down when the desired temperature is reached.
38 A business as a systemA business can be viewed as a system. This system does not operate in a vacuum rather it functions in an environment containing other systems. A business is an open system in that it interacts with other systems in the environment. It is also an adaptive system in that it can change itself or its environment in order to survive.
39 Information systems model Major components of an information: people, hardware, software, data and networks.These components perform input, processing, output, storage, and control activities.
40 Components of an IS People Resources Hardware Resources End users: the people who use the IS or the information from the ISIS specialists: the people who develop and operate ISHardware ResourcesAll physical devices used in information processingMachines, data media, peripheralsSoftware ResourcesAll information processing instructions including programs and proceduresSystem software, application software and proceduresHardware:Peripherals include keyboard, mouse, video screen, printer
41 Components of an IS (cont.) Data ResourcesFacts about the business transactionsProcessed and organized informationDatabases of organized dataNetwork ResourcesCommunications mediaNetwork infrastructure: hardware and softwareThe Internet, intranets and extranetsCommunications media: twisted pair wire, coaxial cable, wireless technologies
42 Data versus Information Data are raw facts about physical phenomena or business transactionsInformation is data that has been converted into meaningful and useful context for end usersExample:Sales data is names, quantities and dollar amountsSales information is amount of sales by product type, sales territory or salesperson
43 IS Activities Input of data resources Data entry activitiesProcessing of data into informationE.g., calculate, compare, sort, classify, summarizeOutput of information productsMessages, reports, forms and graphic imagesStorage of data resourcesData elements and databasesControl of system performanceMonitoring and evaluating feedback
44 Recognizing ISAs a business professional, you should be able to look at an IS and identifyThe people, hardware, software, data and network resources they useThe type of information products they produceThe way they perform input, processing, output, storage and control activities