Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Foundations of Information Systems in Business Chapter 1

1-2 Outline Section 1: Why study IS and IT? What is an Information System? What Should Business Professionals Know about IS? Fundamental Roles of IS in Business Trends in Information Systems What is E-Business? Types of Information Systems IT Careers The IS Functions

1-3 Outline Section 2: System Concepts: A Foundation What is a System? Basic Functions of a System Cybernetic System A Business as a System Other System Characteristics Components of an IS Basic IS Activities Recognizing Information Systems

1-4 Foundation Concepts Improves efficiency and effectiveness of business processes Facilitates managerial decision making & workgroup collaboration Strengthens competitive position in rapidly changing marketplaces Vital component of successful businesses Why study information systems and information technology?

1-5 What is an Information System?

1-6 What is an Information System? Any organized combination of… Policies and procedures Data resources Communication networks Hardware and software Stores, retrieves, transforms, and disseminates information in an organization People

1-7 Early Information Systems They weren’t computerized –Smoke signals –Library card catalogs –Book bag, day planner, and notebooks –Cash registers –Accounting ledger

1-8 What Should Business Professionals Know about IS?

1-9 Fundamental Roles of IS in Business

1-10 Trends in Information Systems

1-11 What is E-Business? Using Internet technologies to empower… Business processes Electronic commerce Collaboration within a company Collaboration with customers, suppliers, other business stakeholders In essence, an online exchange of value

1-12 How E-Business is Being Used

1-13 The primary information technology infrastructure that support E-Business Intranet extranet

1-14 E-Business Uses Reengineering Enterprise collaboration Electronic commerce

1-15 Types of Information Systems Information Systems Operations Support Systems Management Support Systems

1-16 Purposes of Information Systems

1-17 Operational Support Systems Role\Uses of Operations Support System Transaction processing Process control Support Enterprise collaboration Updating of corporate databases

1-18 Types of Operations Support Systems Transaction Processing Systems Record and process data resulting from business transactions Produce documents; Update organization database Sales, inventory, and accounting systems Process Control Systems Monitor and control physical processes Using sensors to monitor refinery processes Enterprise Collaboration Systems Enhance and support team/workgroup communication , video conferencing

1-19 Example of a Process Control System

1-20 Two Ways to Process Transactions Batch Processing Accumulate transactions over time and then process periodically Ex: Banks process all checks in a batch at night Online Processing Process all transactions immediately Ex: A bank processes ATM withdrawals immediately Also called “real-time processing “

1-21 Management Support Systems What do they do? Provide information and support for effective decision making by managers Management information systems Decision support systems Executive information systems

1-22 Types of Management Support Systems Management Information Systems (MIS) –Reports and displays –Example: daily sales analysis reports Decision Support Systems (DSS) –Interactive and ad hoc support –Example: a what-if analysis to determine where to spend advertising dollars Executive Information Systems (EIS) –Provide critical information from MIS, DSS and other sources tailored for executives and managers needs –Example: easy access to actions of competitors

1-23 Other Information Systems Knowledge-based systems that provides expert advice Credit application advisor Expert Systems Knowledge-based systems that support the creation, organization, dissemination of knowledge throughout company Intranet access to best business practices Knowledge Management Systems

1-24 Other Information Systems Helps get strategic advantage Shipment tracking, e-commerce Strategic Information Systems Focus on support operational and managerial application of basic business functions Accounting, finance, marketing Functional Business Systems

1-25 IT Careers Economic downturns affecting all job sectors, including IT Rising labor costs are pushing jobs to India, the Middle East, Asia-Pacific Negative IT employment opportunities strong, with new jobs emerging daily Frequent shortages of IT personnel Long-term job outlook is positive and exciting Positive

1-26 IT Careers

1-27 IT Careers The need to backfill positions Information sharing and client/server environments Rapid growth in computer system design and related services Need for those with problem-solving skills Falling hardware and software prices, which fuel expanded computerization of operations Job increases will be driven by…

1-28 The IS Function Major functional area of business Important contributor to operational efficiency, employee productivity, customer service/satisfaction Vital ingredient in developing competitive products and services in global marketplace (SIS) Major source of information and support for decision making (e.g. DSS) Dynamic and challenging career opportunity Key component of today’s networked business

1-29 System Concepts: A Foundation Hardware, software, data management, telecommunications networks To support inter-connected information systems Finding ways to use information technology; includes designing basic information system components Emphasizes the quality, strategic business value, and security of an organization’s information systems Technology Applications Development Management

1-30 What is a System? A system is… A set of interrelated components With a clearly defined boundary Working together To achieve a common set of objectives By accepting inputs and producing outputs In an organized transformation process

1-31 Basic Functions of a System Input Capturing and assembling elements that enter the system to be processed Processing Transforma- tion process converts input into output Output Transferring transformed elements to their ultimate destination

1-32 Basic Functions of a System

1-33 Cybernetic System All systems have input, processing, output A cybernetic system, a self-monitoring, self- regulating system. –Feedback data about the performance of a system. E.g. speed. –Control… monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal and make the necessary adjustments.

1-34 A Cybernetic System

1-35 Other System Characteristics Systems exist and function in an environment containing other systems Subsystem: is a system that is a component of a larger system. The larger system is an environment –Several systems may share one environment –Systems may be connected via a shared boundary (interface) Types of systems… –Open (e.g. Marketing)and Adaptive (e.g. DSS)

1-36 Other System Characteristics Example: Organizations such as businesses and government agencies are systems in the society (environment)

1-37 A Business as a System

1-38 Components of an IS

1-39 Information System Resources People Information Hardware Networks Software Data

1-40 People Resources People are the essential ingredient for the successful operation of all IS End users (users or clients) in all levels of org. e.g. customers, managers. - Knowledge workers IS Specialists e.g. Systems analysts, software developers, system operators.

1-41 Hardware Resources Machines and media Examples of hardware in computer-based IS: - Computer Systems. E.g. laptop - Computer peripherals. E.g. keyboard

1-42 Software Resources Example of software resources: System software e.g. OS Microsoft Application software e.g. Word processing Procedures e.g. instructions for using a software package.

1-43 Data Resources Data resources are as important as other resources. Highly protected Data takes many forms (alphanumeric data, text data, image data, audio data) Data resources are accessed by: - Databases - Knowledge bases

1-44 Data Versus Information Data are raw facts, typically about physical phenomena or business transactions –Specifically, objective measurements of the attributes of entities Information is data that was converted into meaningful and useful context for end users –The form is : Aggregated, manipulated, and organized –The content is : Analyzed and evaluated –Placed in proper context for a human user

1-45 Network Resources Network Resources include: - Communications media e.g. twisted pair wire, cables, cellular wireless technology. - Network infrastructure e.g. modem, browser.

1-46 Basic IS Activities Output Input Processing Storage Control

1-47 Recognizing Information Systems Business professionals should be able to look at an information system and identify… –The people, hardware, software, data, and network resources they use –The type of information products they produce –The way they perform input, processing, output, storage, and control activities

1-48 My Personal Web-page