1. Foundations of Information Systems in Business
Chapter 1
Foundations of Information Systems in Business

2. Learning Objectives
Understand the concept of a system and how it relates to information systems
Explain why knowledge of information systems is important for business professionals
Identify five areas of information systems knowledge they need

3. Learning Objectives
Give examples to illustrate how information systems can support a firm’s
Business processes
Managerial decision making
Strategies for competitive advantage
Provide examples of information systems from your experiences with business organizations in the real world

4. Learning Objectives
Identify challenges that managers might face in managing successful, ethical development and use of information technology
Provide examples of the components of real world information systems
Become familiar with the myriad of career opportunities in information systems

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

6. Case 1: Value Through Business Intelligence
eCourier
Tracks customer satisfaction in real time
Immediate attention to complaints, problems
Allows GPS tracking of couriers and orders
Books 95% of deliveries online
Uses SeeWhy software to spot trends and anomalies
Optimizes system on an ongoing basis

7. Case 1: Value Through Business Intelligence
Cablecom
Uses online surveys to retain customers
Responds to complaints and problems within 24 hours
Bryan Cave
Optimizes resources while delivering highest customer value
Allows lawyers to track budgets in real time
Provides diversity dashboard
Enables firm to monitor client needs
Allows quick response to demands

8. Case Study Questions
How do information technologies contribute to the business success of the companies depicted in the case?
Provide an example from each company, explaining how the technology implemented led to improved performance

9. Case Study Questions
The Bryan Cave law firm used BI technology to improve the availability, access, and presentation of existing information; this allowed them to provide tailored, innovative services to customers
What other professions could benefit from a similar use of these technologies, and how?

10. Case Study Questions
Cablecom developed a prediction model to better identify customers at risk of switching to another company
In addition to those noted in the case, what other actions could be taken if that information were available?
Would you consider letting some customers leave anyway?

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

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

13. What Should Business Professionals Know?

14. Fundamental Roles of IS in Business

15. Trends in Information Systems

16. 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

17. How E-Business is Being Used

18. E-Business Use Internal business processes Reengineering
Support communication, coordination, coordination among teams and work groups
Enterprise collaboration
Buying, selling, marketing, and servicing of products and services over networks
Electronic commerce

19. Types of Information Systems
Operations
Transaction processing
Process control
Enterprise collaboration
Updating of corporate databases
Management
Decision support systems
Executive information systems

20. Purposes of Information Systems

21. Types of Operations Support Systems
Transaction Processing Systems
Record and process business transactions
Sales, inventory, and accounting
Process Control Systems
Monitor and control physical processes
Using sensors to monitor refinery processes
Enterprise Collaboration Systems
Enhance team/workgroup communication
, video conferencing

22. Two Ways to Process Transactions
Batch Processing
Online Processing
Accumulate transactions over time and then process periodically
Ex: Banks process all checks in a batch at night
Process all transactions immediately
Ex: A bank processes ATM withdrawals immediately

23. 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

24. 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)
Critical information for executives and managers
Example: easy access to actions of competitors

25. Other Information Systems
Expert Systems
Provides expert advice
Credit application advisor
Knowledge Management Systems
Creation, organization, dissemination of knowledge throughout company
Intranet access to best business practices

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

27. IT Challenges and Opportunities

28. Measuring IT Success Efficiency Effectiveness
Minimizes cost, time, use of information resources
Effectiveness
Supports business strategies
Enables business processes
Enhances organizational structure and culture
Increases customer and business value

29. Developing IS Solutions

30. Challenges and Ethics of IT
Application of IT
Customer relationship management
Human resource management
Business intelligence systems
Potential Harm
Privacy infringement
Inaccurate information
Collusion

31. Challenges and Ethics of IT
Potential Risks
Consumer boycotts
Work stoppages
Government intervention
Possible Responses
Codes of ethics
Incentives
Certification

32. Ethical Responsibilities
What uses of IT might be considered improper or harmful to other individuals or society?
What is the proper business use of the Internet or a company’s IT resources?
How can you protect yourself from computer crime?

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

34. IT Careers

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

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

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

38. Case 2: JetBlue & the VA
Good IT processes are as important as hardware and software when it comes to creating business value
Even smaller, less-critical processes can have ramifications of a large magnitude in the interconnected world in which we live
The IS developed by JetBlue in 24 hours, implemented during a crisis in 2007, is now a full-time system
An unscheduled system failure took down key applications in 17 VA medical facilities for a day

39. Case Study Questions
Eric Brinker of JetBlue noted that the database developed during the crisis had not been needed before; the company had never experienced a meltdown
What are the risks and benefits associated with this approach to IT planning?

40. Case Study Questions
With hindsight, we know that the decision made by Eric Raffin of the VA to not fail over to the Denver site was the correct one. But, it involved ignoring established backup procedures
With the information he had at the time, what other alternatives could he have considered?

41. Case Study Questions
A small, undocumented change resulted in the collapse of the VA system, largely due to the high interrelationship between its applications
What is the positive side of this high degree of interconnection, and how does this benefit patients?

42. 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

43. 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

44. Cybernetic System All systems have input, processing, output
A cybernetic system, a self-monitoring, self-regulating system, adds …
Feedback… system performance data
Control… monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal

45. A Cybernetic System

46. A Business as a System

47. Other System Characteristics
A system that is a component of a larger system is a subsystem
The larger system is an environment
Several systems may share one environment
Connected via a shared boundary (interface)
Types of systems…
Open and Adaptive

48. Components of an IS

49. Information System Resources
People
Information
Hardware
Networks
Software
Data

50. 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
Aggregated, manipulated, and organized
Analyzed and evaluated
Placed in proper context for a human user

51. Basic IS Activities
Input
Processing
Output
Storage
Control

52. 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

53. Case 3: Sew What? Inc.
Provides custom theatrical draperies and fabrics for stages, concerts, fashion shows, and special events worldwide
Launched web site and acquired clients from all over the world; revenue grew more than 45% per year
Runs its business with Intuit’s Quick-Books Enterprise Solutions & Dell PowerEdge servers
Awarded “Small Business Excellence Award” for its innovative use of technology to improve customers’ experience

54. Case Study Questions
How do information technologies contribute to the business success of Sew What? Inc.?
Give examples from the case regarding the business value of information technology that demonstrate this conclusion

55. Case Study Questions
If you were a management consultant to Sew What? Inc., what would you advise Megan Duckett to do at this point to be even more successful in her business?
What role would information technology play in your proposals? Provide specific recommendations

56. Case Study Questions
How could the use of information technology help a small business you know be more successful?
Provide examples to support your answer