Introduction to Information Systems Chapter 1

Cases on Information systems  American airlines  creating new businesses  Baxter company  competitive advantage  Mrs. Fields  organizational consequences  Open Market  fast evolution: business risk

IS and IS resources Information systems Information Systems Resources Management Challenges Business applications Development processes Foundation concepts Information technologies PEOPLE Software Hardware DataNetworks O’Brien p7-8

The importance of Information Systems  An information system is a set of people, procedures and resources that:  collect  transform  disseminates information in an organization.  Information is used for better management  Companies cannot operate any more without automated information systems O’Brien p 7-8

Properties of Information Systems Enterprise Perspective  major functional area of business  important cost that poses a resource management problem  important factor for efficiency, productivity, customer service and satisfaction  source of management information and support  important ingredient in strategic advantage and competitive position  vital, dynamic, and challenging career opportunity O’Brien p 10

Properties of Information Systems Enterprise Perspective  Worldwide information Society  Knowledge workers  Information create use dissiminate  Use information technology to manage people, finances, material, energy, …  Ethical aspects  social aspects: have - have not  privacy aspects: supermarket O’Brien p 8

Ethical considerations Improve market knowledge Improve response capabilities Improve persuasive communications Improve strategy selection Applications of ICT Infrigements on privacy Inaccurate information Collusion Exclusion from essential facilities Potential harmsPotential risks How likely are legal actions, consumer boy -cotts, strikes, other threats to occur Possible responses self-regulation Advocacy Education Codes of ethics Incentives certification O’Brien p 9

The Role of Information Systems Support of Strategic Advantage Support of Managerial Decision Making Support of Business Operations O’Brien p 11

The Internetwork- enterprises The Internet Intranets Extranets Client Enterprise Supplier Other Organizations Electronic Commerce

Business Process Reengineering  Before  managers took all decisions  only experts can do complex jobs  information is available on only one specific place  Collaborators in the field need an office to receive, store, consult and send information  Today  everybody can take decisions  a generalist can do the work of an expert based on available information  information is available for everybody at the same moment in time  collaborators can send and receive information from everywhere O’Brien p 16

Information Systems Information Systems Knowledge needed by managerial end users Management of IS Resources and activities Development of IS Solutions to business problems Applications of IS To operations management and strategic advantage Technology of IS Hardware, software, Telecommunications, and Data Management Foundation concepts of IS Fundamental Behavioral and Technical Aspects

The System Concept System: A group of interrelated components or interacting elements forming a unified whole.  input  processing  output  feedback  control } - environment - other systems O’Brien O’Brien p 21

Other System Concepts  Subsystem  Interface  Open System  Adaptive system O’Brien p 23

Stakeholders in the Business Environment The communityCompetitors Suppliers Government Agencies Customers Stockholders Financial InstitutionsLabor Unions Management Information Systems Economic Resources : People Money Material Land Facilities Energy Information Organizational Processes : Production Marketing Finance Personnel Other Processes Goods and Services: Products Services Payments Contributions Information Other Effects Control Feedback Input PROCESSING Output O’Brien p 24

Communications media and network support Components of an Information System People Resources : End users and IS specialists Data Resources Data, Model, and Knowledge Bases Software Resources Programs and Procedures Machines and Media Hardware Resources Communications media and network support Network resources Control of System Performance Storage of Data resources Input of Data Resources Processing Data into Information Output of Information Products O’Brien O’Brien p 25

IS Resources and Products People Resources  Specialists: system analysts, programmers, operators  End users : anyone else using the system Hardware Resources  Machines: computers, video monitors, disks, printers, scanners  Media: floppies, tapes, disks, plastic cards, paper forms,... Software Resources system, application, procedures  Programs: OS, spreadsheet programs, payroll programs,....  Procedures: data entry, error correction, paycheck distribution,... Data Resources database, model base, knowledge base  Product descriptions, customer records, inventory databases,... Network resources  Communication media, network support,... O’Brien p 26-27

Data versus Information  Data  raw facts or observations  meaningless  time independent  machine efficient  general purpose  Information  informative value  time dependent  human efficient  specific  based on previous knowledge Different types of information can be derived from the same source of data. O’Brien 24

Expanding Roles of Information Systems 1950s-1960s:Data Processing  electronic data processing systems transaction processing, record keeping, traditional accounting 1960s-1970s:Management reporting  Management Information Systems mgt. reports for pre-specified information to support decision making 1970s-1980s:Decision Support  Decision Support Systems Interactive ad hoc support of the managerial decision process O’Brien 28

Expanding Roles of Information Systems (cont)  1980s-1990s:Strategic and End User Support  End User Computing Systems: direct productivity support  Executive Information Systems:Critical Information  Expert Systems: Knowledge based expert advise for end users  Strategic Information Systems: for competitive advantage  1990s – 2000s : Global internetworking  Internetworked information systems  for end-user, enterprise, and inter-organizational computing, collaboration, including global operations and management on the internet and other interconnected enterprise and global networks. O’Brien p 31

Types of Information Systems O’Brien 29 O’Brien p 32-33

IT - usage in the Company

Nolan curve Four stages of DP growth: contagion control maturity initiation

NOLAN phases StageInitiationcontagioncontrolmaturity orientationcost reductionnew functionsmoratoriumdatabase inquiry organizationwhere first useddispersedcentralcontrolled distributed manageroperations manager middle manager director management viewlaxsellingcontrollinga resource applicationssupportingdiversificationdatabasesend-user computing controllittlevery littlestrongnormal user involvementinterviews, manuals PC'sproject groupstransparent

Information systems in the Company

Electronic Banking  account status  exchange rates  economic information  bank transfers  order checks  reports  batch payments ( SWIFT,...) Security via magnetic cards, password, control totals

Decision Support  financial models  what-if analyze  goal seeking  risk analysis  statistical analysis  management models  graphical representations  personal databases

Hospital Information Systems  patient registration  laboratory management  radiology  medical files  pharmacy  stock management and purchasing  human resources and scheduling  billing and A/C receivable  book keeping  operation theater

Other Applications  Transport  just in time  routing  shipping  Insurance  Tourism  Department stores