An Introduction to Information Systems in Organizations Chapter 1 Chapter 1: An Introduction to Information Systems This chapter presents basic concepts necessary to understand systems and business information systems. Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Learning Objectives What is information? What are the differences between data and information? How can you evaluate the quality of data? When is information valuable? After completing Chapter 1, you should be able to accomplish the objectives on this slide and the following slide. Information is key in business organizations. The value of information is closely related to how it helps decision makers achieve the organization’s goals. Models, computers and information system help make it possible for organizations to improve Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Learning Objectives What is an information system? What are the basic types of business information systems? Who uses them for which purposes? What are their benefits? Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Learning Objectives How do you develop information systems? What are the major steps? Who are involved in these steps? What does each step accomplish? Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Learning Objectives What are the value-added processes in the supply chain? How do information systems help these processes? How can the costs of an organization be lowered? How can an organization offer better service? What is a competitive advantage? Can organizations that use information systems to gain an advantage? Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Learning Objectives What roles are involved in designing, developing, and maintaining information systems? What are the functions of each role? What careers are available in information systems? Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Information Concepts Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition A set of interrelated components that Collect data Manipulate data Disseminate data & information Provide feedback to meet an objective. Examples: ATMs; airline reservation systems; course reservation systems An information system is a collection of related things that work together to achieve a common goal. The components collect, process or transform, and distribute data and information. Common examples of information systems include: ATMs, point of sale (POS) systems used by grocery checkout clerks; information systems used by airlines to make reservations or schedule flights; and the system you use at your university to register for classes. Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Data vs. Information Data: Raw facts Example: Name, last name, courses registered Information: Collection of facts organized in such a way that they have value beyond the facts themselves Example: Number of people that register for a course is more than a the course quota. The terms data & information are often used interchangeably. However, there is an important distinction: information is value-added data. Data is processed, organized or transformed to become information. Data are raw facts. For example, if you write down your age & grade on an English test & hand it to me, I see 2 numbers – raw data. However, if you include the average age and average test score for your class, the data would have some meaning to me as a teacher… it would become information. Interestingly, your name and grade – data to me- could very well be information to you. In the context of your life or experiences, those 2 numbers alone would most likely have meaning. Similarly, a grocery store manager would most likely find a list of every item sold today to be of little use – it is data. However, the amount that the store’s total sales are over or under planned sales would be information. Fundamentals of Information Systems, Second Edition

The Process of Transforming Data into Information Easy to come up with arbitrary transformations (easy to generate information) Difficult to come up with a useful transformation (difficult to generate valuable information) Fundamentals of Information Systems, Second Edition

Characteristics of Valuable Information (1) Accurate: Does not contain errors Complete: Contains all related facts Economical: Time-wise and Cost-wise Flexible: Can be used for different purposes Reliable: The combined data is correct Fundamentals of Information Systems, Second Edition

Characteristics of Valuable Information (2) Relevant: Can be used by the organization Simple: Easily understandable and usable Timely: Delivered when it can still be used Verifiable: Can be derived and confirmed again Accessible: Those that want to use the information can locate and receive it Secure: Accessible only to authorized individuals Fundamentals of Information Systems, Second Edition

The Components of an Information System Wrong price Missing course Scan barcodes Type user name Calculate price Look up schedule Print receipt Display schedule Fundamentals of Information Systems, Second Edition

Computer-Based Information Systems (CBIS) A computer-based information system is an information system that uses computer technology to perform input, processing & output activities. Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Components of a CBIS Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Components of a CBIS Hardware - computer equipment used to perform input, processing, and output activities. Software - computer programs that govern the operation of the computer. Database - an organized collection of facts and information, typically consisting of two or more related data files. People - the most important element in most computer-based information systems. Procedures - include the strategies, policies, methods, and rules for using the CBIS. Fundamentals of Information Systems, Second Edition

Telecommunications, Network, and the Internet Telecommunications - the electronic transmission of signals for communications. Networks - used to connect computers and computer equipment in a building, around the country, or around the world to enable electronic communications. Internet - the world’s largest computer network, actually consisting of thousands of interconnected networks Fundamentals of Information Systems, Second Edition

Business Information Systems The most common organizational business information systems are: electronic commerce systems, transaction processing systems, management information systems, and decision support systems. Some firms also use artificial intelligence systems, virtual reality systems or geographic information systems. Fundamentals of Information Systems, Second Edition

Business Information Systems Electronic Commerce Transaction Processing Systems and Enterprise Resource Planning (ERP) Information and Decision Support Systems Special-Purpose Business Information Systems: Artificial Intelligence, Expert Systems, and Virtual Reality Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition E-Commerce Business-to-consumer Example: Bookstore selling books to customers (amazon.com) Business-to-business Example: A data processing company handling data services for a company (adp.com) Consumer-to-consumer Example: A customer selling goods to another customer (e-bay.com) Fundamentals of Information Systems, Second Edition

E-Commerce Greatly Simplifies the Purchasing Process Fundamentals of Information Systems, Second Edition

Transaction Processing Systems and ERP Transaction processing system (TPS) - an organized collection of people, procedures, software, databases, and devices used to record completed business transactions. Enterprise Resource Planning (ERP) System - a set of integrated programs capable of managing a company’s vital business operations for an entire multisite, global organization. Fundamentals of Information Systems, Second Edition

A Payroll Transaction Processing System Fundamentals of Information Systems, Second Edition

Management Information System (MIS) (Help do things right) Report on number of components that need to be sold Report on number of components produced Report on budget Fundamentals of Information Systems, Second Edition

Decision Support Systems (DSS) (Help do the right thing) Organizations often have to make decisions. DSSs help making decisions for particular problems. The focus of a DSS is on decision-making effectiveness. Fundamentals of Information Systems, Second Edition

Essential DSS Elements Fundamentals of Information Systems, Second Edition

Special-Purpose Business Information Systems Artificial intelligence (AI) systems Virtual reality systems Improve personal experience Virtual tour of a real-estate Expert systems Improve business intelligence Suggest products Fundamentals of Information Systems, Second Edition

The Major Elements of Artificial Intelligence Fundamentals of Information Systems, Second Edition

A Head-Mounted Display Fundamentals of Information Systems, Second Edition

Fundamentals of Information Systems, Second Edition Systems Development The activity of creating or modifying existing business systems. Systems Investigation Systems Analysis Systems Design Systems Implementation Systems Maintenance and Review Fundamentals of Information Systems, Second Edition

Organizations and Information Systems Fundamentals of Information Systems, Second Edition

A General Model of an Organization Material, money Goods, services Organization - a formal collection of people and various other resources established to accomplish a set of goals Fundamentals of Information Systems, Second Edition

The Value Chain of a Manufacturing Company Fundamentals of Information Systems, Second Edition

Information Systems in Supply Chain Management Where does the information system stand? Outside the process Supports monitoring, reporting, etc. Inside the process Participate actively by creating service Fundamentals of Information Systems, Second Edition

Technology Diffusion, Infusion, and Acceptance Technology Diffusion - a measure of how widely technology is spread throughout an organization. Technology Infusion - is the extent to which technology permeates an area or department. Technology Acceptance Model (TAM) - specifies the factors that can lead to higher acceptance and usage of technology in an organization Fundamentals of Information Systems, Second Edition

Competitive Advantage A significant and (ideally) long-term benefit to a company over its competition. Factors That Lead Firms to Seek Competitive Advantage Rivalry among Existing Competitors Threat of New Entrants Threat of Substitute Products and Services Bargaining Power of Customers and Suppliers Fundamentals of Information Systems, Second Edition

Strategic Planning for Competitive Advantage Altering the Industry Structure Creating New Products and Services Improving Existing Product Lines and Services Using Information Systems for Strategic Purposes Fundamentals of Information Systems, Second Edition

Competitive Advantage Factors and Strategies Fundamentals of Information Systems, Second Edition

Performance-Based Information Systems Productivity= Achieved Output/ Required Input Quality: Satisfy customers’ needs Return on Investment and the Value of Information Systems Earnings Growth: Increase in Profit Market Share: Company Sales/Total Market Customer Awareness and Satisfaction: Measure by surveys Total Cost of Ownership: Includes setting up, training, maintaining, and so on Fundamentals of Information Systems, Second Edition

Three Stages in the Business Use of IS Fundamentals of Information Systems, Second Edition

Roles, Functions, and Careers in the Information Systems Department Operations Make sure IS works efficiently Start, stop, maintain hardware System & network operators, data-entry operators Systems Development Identify needs Produce programs System analyst, computer programmer Support Administration and assistance Train users; help maintain the system Web and database administrators; help-desk staff Fundamentals of Information Systems, Second Edition

The Three Primary Responsibilities of Information Systems Fundamentals of Information Systems, Second Edition

Typical IS Titles and Functions The Chief Information Officer LAN Administrators Internet Careers Fundamentals of Information Systems, Second Edition

Why Learn About Information Systems? Advance in your career Solve problems Realize opportunities Meet your career goals Fundamentals of Information Systems, Second Edition