1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. Fundamentals of Information Systems, Second Edition
Information Concepts
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8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. Computer-Based Information Systems (CBIS)
A computer-based information system is an information system that uses computer technology to perform input, processing & output activities.
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15. Fundamentals of Information Systems, Second Edition
Components of a CBIS
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16. 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

17. 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

18. 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

19. 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
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20. 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

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

22. 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

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

24. 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

25. 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

26. Essential DSS Elements
Fundamentals of Information Systems, Second Edition

27. 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

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

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

30. 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

31. Organizations and Information Systems
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32. 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

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

34. 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

35. 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

36. 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

37. 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

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

39. 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

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

41. 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

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

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

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