2. Fundamentals of Information Systems, Third Edition2 Principles and Learning Objectives The value of information is directly linked to how it helps decision makers achieve the organization’s goals –Distinguish data from information and describe the characteristics used to evaluate the quality of data

3. Fundamentals of Information Systems, Third Edition3 Principles and Learning Objectives (continued) Knowing the potential impact of information systems and having the ability to put this knowledge to work can result in a successful personal career, organizations that reach their goals, and a society with a higher quality of life –Identify the basic types of business information systems and discuss who uses them, how they are used, and what kinds of benefits they deliver

4. Fundamentals of Information Systems, Third Edition4 Principles and Learning Objectives (continued) System users, business managers, and information systems professionals must work together to build a successful information system –Identify the major steps of the systems development process and state the goal of each

5. Fundamentals of Information Systems, Third Edition5 Principles and Learning Objectives (continued) The use of information systems to add value to the organization can also give an organization a competitive advantage –Identify the value-added processes in the supply chain and describe the role of information systems within them –Identify some of the strategies employed to lower costs or improve service –Define the term competitive advantage and discuss how organizations are using information systems to gain such an advantage

6. Fundamentals of Information Systems, Third Edition6 Principles and Learning Objectives (continued) Information systems personnel are the key to unlocking the potential of any new or modified system –Define the types of roles, functions, and careers available in information systems

7. Fundamentals of Information Systems, Third Edition7 Introduction Information system (IS) –Set of interrelated components: collect, manipulate, disseminate data and information –Provide feedback to meet an objective –Examples: ATMs, airline reservation systems, course reservation systems

8. Fundamentals of Information Systems, Third Edition8 Information Concepts: Data Versus Information Data: raw facts –Alphanumeric, image, audio, and video Information –Organized collection of facts –Have value beyond the facts themselves

9. Fundamentals of Information Systems, Third Edition9 Figure 1.1: Defining and Organizing Relationships Among Data Creates Information Data Versus Information (continued)

10. Fundamentals of Information Systems, Third Edition10 Figure 1.2: The Process of Transforming Data into Information Data Versus Information (continued)

11. Fundamentals of Information Systems, Third Edition11 The Characteristics of Valuable Information Table 1.2: Characteristics of Valuable Information

12. Fundamentals of Information Systems, Third Edition12 The Characteristics of Valuable Information (continued) Table 1.2: Characteristics of Valuable Information (continued)

13. Fundamentals of Information Systems, Third Edition13 What Is an Information System? Figure 1.3: The Components of an Information System

14. Fundamentals of Information Systems, Third Edition14 Computer-Based Information Systems Manual versus computerized information systems Computer-based information system (CBIS) –Hardware, software, databases, telecommunications, people, and procedures –Collect, manipulate, store, and process data into information

15. Fundamentals of Information Systems, Third Edition15 Computer-Based Information Systems (continued) Figure 1.4: The Components of a Computer-Based Information System

16. Fundamentals of Information Systems, Third Edition16 Business Information Systems Most common types of information systems used in business organizations: –Electronic and mobile commerce systems –Transaction processing systems –Management information systems –Decision support systems –Specialized business information systems

17. Fundamentals of Information Systems, Third Edition17 Electronic and Mobile Commerce E-commerce: any business transaction executed electronically between parties such as: –Companies (B2B) –Companies and consumers (B2C) –Consumers and other consumers (C2C) –Business and the public sector –Consumers and the public sector

18. Fundamentals of Information Systems, Third Edition18 Transaction Processing Systems and Enterprise Resource Planning Transaction: business-related exchange –Payments to employees –Sales to customers –Payments to suppliers Transaction processing system (TPS) –A collection of people, procedures, software, databases, devices –Records completed business transactions

19. Fundamentals of Information Systems, Third Edition19 Transaction Processing Systems and Enterprise Resource Planning (continued) Figure 1.7: A Payroll Transaction Processing System The inputs (numbers of employee hours worked and pay rates) go through a transformation process to produce outputs (paychecks)

20. Fundamentals of Information Systems, Third Edition20 Enterprise Resource Planning Integrated programs that manage all business operations Coordinate planning, inventory control, production, and ordering

21. Fundamentals of Information Systems, Third Edition21 Information and Decision Support Systems: Management Information Systems Management information system (MIS) –A collection of people, procedures, software, databases, devices –Provides information to managers/decision makers Primary focus is operational efficiency MIS outputs –Scheduled reports –Demand reports –Exception reports

22. Fundamentals of Information Systems, Third Edition22 Management Information Systems (continued) Figure 1.8: Functional management information systems draw data from the organization’s transaction processing system

23. Fundamentals of Information Systems, Third Edition23 Decision Support Systems Decision support system (DSS) –A collection of people, procedures, software, databases, devices –Supports problem-specific decision making Focus is on decision-making effectiveness

24. Fundamentals of Information Systems, Third Edition24 Decision Support Systems (continued) Figure 1.9: Essential DSS Elements

25. Fundamentals of Information Systems, Third Edition25 Specialized Business Information Systems: Artificial Intelligence, Expert Systems, and Virtual Reality Artificial intelligence (AI) systems Expert systems Virtual reality systems Other special-purpose business information systems

26. Fundamentals of Information Systems, Third Edition26 Artificial Intelligence Figure 1.10: The Major Elements of Artificial Intelligence

27. Fundamentals of Information Systems, Third Edition27 Systems Development Systems development –Creating or modifying existing business systems Systems investigation: gain an understanding of the problem to be solved or opportunity to be addressed Systems analysis: define problems and opportunities of the existing system

28. Fundamentals of Information Systems, Third Edition28 Systems Development (continued) Systems design: determine how the new system will work to meet the business needs defined during systems analysis Systems implementation: create or acquire the various system components defined in the design step, assembling them, and putting the new system into operation Systems maintenance and review: check and modify the system so that it continues to meet changing business needs

29. Fundamentals of Information Systems, Third Edition29 Organizations and Information Systems Organization: a collection of people and other resources established to accomplish a set of goals An organization is a system –Inputs: resources (materials, people, money) –Outputs: goods or services

30. Fundamentals of Information Systems, Third Edition30 Organizations and Information Systems (continued) Figure 1.13: A General Model of an Organization

31. Fundamentals of Information Systems, Third Edition31 Organizations and Information Systems (continued) Value chain: a series (chain) of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service Upstream management: management of raw materials, inbound logistics, and warehouse and storage facilities Downstream management: management of finished product storage, outbound logistics, marketing and sales, and customer service

32. Fundamentals of Information Systems, Third Edition32 Organizations and Information Systems (continued) Figure 1.14: The Value Chain of a Manufacturing Company

33. Fundamentals of Information Systems, Third Edition33 Organizational Culture and Change Organizational culture –Major understandings and assumptions –Influences information systems Organizational change –How organizations plan for, implement, and handle change

34. Fundamentals of Information Systems, Third Edition34 Technology Diffusion, Infusion, and Acceptance Technology diffusion: measure of widespread use of technology Technology infusion: extent to which technology permeates a department Technology acceptance model (TAM): specifies factors that can lead to higher acceptance and usage of technology

35. Fundamentals of Information Systems, Third Edition35 Organizations in a Global Society As companies rely on virtual structures and outsourcing to a greater extent, businesses can operate around the world Challenges to operating in a global society –Every country has a set of customs, cultures, standards, politics, and laws –Language barriers –Difficulty in managing and controlling operations in different countries

36. Fundamentals of Information Systems, Third Edition36 Competitive Advantage Significant, long-term benefit to a company over its competition Ability to establish and maintain a competitive advantage is vital to a company’s success

37. Fundamentals of Information Systems, Third Edition37 Factors That Lead Firms to Seek Competitive Advantage Rivalry among existing competition Threat of new entrants Threat of substitute products and services Bargaining power of customers and suppliers

38. Fundamentals of Information Systems, Third Edition38 Strategic Planning for Competitive Advantage Change the structure of the industry Create new products or services Improve existing products or services Use information systems for strategic purposes

39. Fundamentals of Information Systems, Third Edition39 Strategic Planning for Competitive Advantage (continued) Table 1.5: Competitive Advantage Factors and Strategies

40. Fundamentals of Information Systems, Third Edition40 Strategic Planning for Competitive Advantage (continued) Table 1.5: Competitive Advantage Factors and Strategies (continued)

41. Fundamentals of Information Systems, Third Edition41 Performance-Based Information Systems Consider both strategic advantage and costs Use productivity, return on investment (ROI), net present value, and other measures of performance

42. Fundamentals of Information Systems, Third Edition42 Performance-Based Information Systems (continued) Figure 1.15: Three Stages in the Business Use of Information Systems

43. Fundamentals of Information Systems, Third Edition43 Productivity Output achieved divided by input required Higher level of output for a given level of input means greater productivity

44. Fundamentals of Information Systems, Third Edition44 Return on Investment and the Value of Information Systems Earnings growth Market share Customer awareness and satisfaction Total cost of ownership

45. Fundamentals of Information Systems, Third Edition45 Careers in Information Systems Degree programs –Degrees in information systems –Business degrees with a global or international orientation Computer systems are making IS professionals’ work easier Opportunities in information systems are not confined to single countries

46. Fundamentals of Information Systems, Third Edition46 Careers in Information Systems (continued) Figure 1.16: The Three Primary Responsibilities of Information Systems

47. Fundamentals of Information Systems, Third Edition47 Roles, Functions, and Careers in the IS Department Primary responsibilities in information systems –Operations: focuses on the efficiency of information –Systems development: focuses on development projects and ongoing maintenance and review –Support: provides user assistance

48. Fundamentals of Information Systems, Third Edition48 Typical IS Titles and Functions Chief information officer (CIO): uses IS department equipment and personnel LAN administrators: set up and manage the network hardware, software, and security processes Internet careers –Strategists –Programmers –Web site operators –Chief Internet officer Other IS careers

49. Fundamentals of Information Systems, Third Edition49 Summary Data: raw facts Information: organized collection of facts System components: input, processing, output, and feedback Computer-based information system (CBIS) –Hardware, software, databases, telecommunications, people, and procedures –Collect, manipulate, store, and process data into information

50. Fundamentals of Information Systems, Third Edition50 Summary (continued) Transaction processing system (TPS): a collection of people, procedures, software, databases, and devices used to record completed business transactions Management information system (MIS): a collection of people, procedures, software, databases, and devices used to provide routine information to managers and decision makers

51. Fundamentals of Information Systems, Third Edition51 Summary (continued) Decision support system (DSS): a collection of people, procedures, software, databases, and devices used to support problem-specific decision making Systems development: creating or modifying existing business systems Competitive advantage: significant, long-term benefit to a company over its competition Primary responsibilities in information systems: operations, systems development, and support