Lecturer: Dr Mohammad Nabil Almunawar Foundations of Information Systems in Business

2 Explain why knowledge of information systems is important for business professionals. Give examples to illustrate how E-business, electronic commerce, or enterprise collaboration systems could support a firm’s business. Provide examples of real world information systems Provide examples of several major types of information systems Identify Management Challenges of the E-Business Enterprise Learning Objectives

3 Why IS is important in Business? Information is a key factor in making decision. Information systems are aimed to provide information to help making decisions. Information systems play a vital role in the operations (especially E-business and E-commerce), enterprise collaboration and management, and strategic success of businesses. An understanding of the effective and responsible use and management of information systems and technologies is important for managers, business professionals, and other knowledge workers in today's internetworked enterprises

4 An IS Framework for Business Professionals

5 IS Framework … Foundation concepts: fundamental behavioral, technical, business, and managerial concepts like system components and functions, or competitive strategies. Information technologies: concepts, developments, or management issues regarding hardware, software, data management, networks, and other technologies. Business applications: major uses of IT for business processes, operations, decision making, and strategic/competitive advantage. Development processes: how end users and IS specialists develop and implement business/IT solutions to problems and opportunities arising in business. Management challenges: how to effectively and ethically manage the IS function and IT resources to achieve top performance and business value in support of the business strategies of the enterprise.

6 System Concepts A system is an integrated set of components, or entities, that interact to achieve a particular function or goal. A component of a system can be a physical component an abstract concept A component of a system may be another system. A system may be a component of another (bigger) system. Every system has a boundary, inputs, outputs and method for converting inputs to outputs and system interface. A system are composed of interrelated and interdependent subsystems.

7 System Boundary and Interface A system boundary depicts the scope of activities. For instance, the activities in a class include lectures, discussion, testing, grading and preparation of lectures, assignment, etc. These activities may represent the boundary of the system for which the teacher is responsible. Thus, the boundary delineate an area of responsibility. Systems usually consists of numerous sub-systems which has elements, interactions and objectives. Sub-systems perform specialized tasks related to the overall objectives of the total system. Sub-systems must work harmoniously to achieve the primary objective of the system. An interface is a connection at systems or subsystem boundaries. An interface serves as a medium to enter inputs or to show outputs.

8 Systems & Their Environments System’s environment is any system (other systems, in general) outside the system. System’s environment may or may not interact with the system. Open system is a system that interact with its environment. An open system needs to receive feedback to change and to continue to exist in its environment. Feedback is needed to measure the performance of the system and then to improve the system. Control involves monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal. Closed system is a relatively self-contained system (does not interact with its environment).

9 Manufacturing Process Input of Raw Materials Output of Finished Products Environment Other Systems Control by Management Control Signals Control Signals Feedback Signals Feedback Signals System Boundary Example: manufacturing Systems

10 Management Information System Economic Resources: People Money Material Machine Land Facilities Energy Information Goods and Services: Products Services Payments Contributions Information Other effects Organizational Processes: Market, develop, produces and deliver products and services Support Customer Other processes The Community Competitors Government Agencies Suppliers Government Agencies Stockholders Customers Financial institutionsLabor unions Example: Business organization System

11 What is an Information System? An IS can be defined as an organized combination of people, hardware, software, communication networks, and data resources that collects, transforms, and disseminates information in an organization. IS Resources People Software Hardware Data Networks

12 Components of an Information System

13 IS Recources People resources Specialists (system analysts, software developers, system operators) End users Hardware resources Machine (computers, printers, scanners, etc.) Media (magnetic disks, optical disks, tapes, etc.) Software resources System software + utilities Application software Data resources (product descriptions, HR, etc.) Network resources (Communication media, communication processors, networks access, etc.)

14 Data and Information Data: raw facts, such as an employee’s name and number of hours worked in a week, inventory part numbers, or sales orders. Information: a collection of facts organized in such a way that they have additional value beyond the value of the facts themselves.

15 Data & Information WestCharles Mann 79154TM Shoes Monthly Sales Report for West Region Sales Rep: Charles Mann Emp No Item Qty Sold Price TM Shoes 1200 $100

16 Transformation data to information Types of Data

17 Logical Data Elements Field Record File Database A field is a group of character that represent a characteristic of an entity. A record is a collection of interrelated fields. A file is a collection of interrelated records A database is an integrated collection of interrelated files.

18 Attributes of Information Quality

19 Value of Information The value of information is directly linked to how it helps decision makers achieve their organizations’ goals. For example, the value of information might be measured in the time required to make a decision or in increased profits to the company. In general value of information is the benefit gained from the information minus the cost incurred to get/produce the information.

20 Major Roles of Information Systems Support of Strategic Advantage Support of Managerial Decision Making Support of Business Operations

21 History of the role of Information Systems Data Processing Management Reporting Decision Support Strategic & End User Electronic Commerce Electronic Data Processing - TPS Management Information Systems Decision Support Systems - Ad hoc Reports End User Computing Exec Info Sys Expert Systems SIS Electronic Business & Commerce -Internetworked E-Business & Commerce

22 The Internetworked -Business Company Boundary Manufacturing and Production Engineering & Research Accounting, Finance, and Management Suppliers and Other Business Partners Procurement, Distribution, and Logistics Advertising Sales Customer Service Consumer and Business Customers Intranets The Internet Extranets

23 Types of Information Systems Transaction Processing Systems Process Control Systems Enterprise Collaboration Systems Operations Support Systems Management Information Systems Decision Support Systems Executive Information Systems Management Support Systems Information Systems

24 Other Categories of Information Systems Expert Systems Knowledge Management Systems Functional Business Systems Strategic Information Systems Cross-Functional Information Systems

25 The Information Systems Development Process

26 Management Challenges of the E-Business Enterprise Business Strategies Business Processes Business Needs Customer Relationships Business Partners Suppliers Business Customers Ethical Considerations Potential Risks? Potential Laws? Possible Responses? IS Human Resources IS Development IT Infrastructure IS Performance Organization Structure and Culture User Acceptance