1. Introduction to Information Systems Lecture 01
Foundations of IS in Business
Jaeki Song

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 and identify five areas of information systems knowledge they need.
Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business.
Become familiar with the myriad of career opportunities in information systems.

3. Why study Information Systems and Information Technology?
Vital component of successful businesses
Helps businesses expand and compete
Businesses use IS and IT
To improve efficiency and effectiveness of business processes
For managerial decision making
For workgroup collaboration

4. What is an Information System?
A system
Is a set of interrelated components
With a clearly defined boundary
Working together to achieve a common set of objectives
IS can be any organized combination of
People, hardware, software, communications networks, data resources, and policies and procedures
That stores, retrieves, transforms, and disseminates information in an organization

5. Information System (IS) versus Information Technology (IT)
IS is all the components and resources necessary to deliver information and functions to the organization
IT is hardware, software, networking and data management
In theory, IS could be paper based
We will focus on Computer-Based Information Systems (CBIS)

6. Key Questions
How does the management of IT differ in scope and complexity from the other business functions?
Why does the view of IT by IT executives differ form the views of other business executives?
What has to be done to better manage the IT resource?
What are some of the key issues in the management of IT organizations?
Why is the successful management of IT important?

7. Primary Purpose of IT
IT is important and necessary for a successful organization
As will be argued throughout the course/semester, successful management of IT is necessary for competitive advantage

8. Management of IT Strategic Tactical Operational
Pertinent to long-term attainment of goals and business as a whole
Tactical
Needed to achieve strategic plans and goals to produce changes for success
Operational
Process and actions that must be performed on a day-to-day basis to maintain performance level

9. Role of IT Traditional view Emerging views Supporting function
No longer just serves a business
Emerging views
Integral in business strategy
Impacts every area of business
Complexity increases
How does IT function vis-à-vis the entire organization
Responsible for the integration of information

10. E-Biz and Globalization Enabler
All aspects of IT are more externally visible
Serve as mediator among various functions
Disintermediation, Reintermediation (Insurance, banking), Hypermediation (Internet service provider), Infomediation
Globalization
Expands business presence beyond borders
IT maintenance of Infrastructure and Technologies

11. Gap Between IT and Business
IT/Business alignment critical
Alignment
Application of IT in an appropriate and timely manner, in harmony with business goals, strategies, and needs

12. IT vs. Other Functions Encompasses entire enterprise
Affects all business functions
Extends beyond business boundaries
Affects every level of management
Impact affects entire value chain, including suppliers and customers
Creates synergy between departments

13. IS Knowledge Framework for Business Professionals

14. What should a Business Professional know about IS?
Foundation Concepts: fundamental behavioral, technical, business and managerial concepts
Information Technology: Hardware, software, networks, data management and Internet-based technology
Business Applications: Major uses of the IS in the organization
Development Processes: How to plan, develop and implement IS to meet business opportunities
Management Challenges: The challenges of effectively and ethically managing IT

15. What does IS do for a business?
Examples of business processes: record purchases, track inventory, pay employees, etc. Business would stop without such IS.
Examples of decision making: what lines of merchandise need to be added, what kind of investment required.
Examples of competitive advantage: put kiosk in store to connect to e-commerce website. Help gain advantage over competitor without such a kiosk.

16. Business Applications expanding role over time
Note that while IS has expanded, they are still doing the same basic things that they’ve been doing.
What has changed is: more integration of functions, greater connectivity across components, better use for maximum advantage of business and strategic opportunities

17. What is E-business? The use of Internet technologies
to work and empower business processes, electronic commerce, and enterprise collaboration
within a company and with its customers, suppliers, and other business stakeholders.
An online exchange of value.

18. How e-business is being used

19. E-business use Reengineer internal business processes
Enterprise collaboration systems: support communications, coordination and collaboration among teams and work groups, e.g., virtual teams
Electronic commerce: buying, selling, marketing and servicing of products and services over computer networks

20. Types of IS

21. Operations support systems
What are they?
Efficiently process business transactions
Control industrial processes
Support communications and collaboration
Update corporate databases

22. Types of Operations Support Systems
Transaction Processing Systems
Record and process data from business transactions
Examples: sales processing, inventory systems, accounting systems
Process Control Systems
Monitor and control physical processes
Example: in a petroleum refinery use sensors to monitor chemical processes
Enterprise Collaboration Systems
Enhance team and work group communications
Examples: , videoconferencing

23. Two ways to process transactions
Batch Processing:
Accumulate transactions over time and process periodically
Example: a bank processes all checks received in a batch at night
Online Processing:
Process transactions immediately
Example: a bank processes an ATM withdrawal immediately

24. Management Support Systems
What are they?
Provide information and support for effective decision making by managers

25. Types of Management Support Systems
Management Information Systems (MIS)
Provide reports and displays to managers
Example: daily sales analysis reports
Decision Support Systems (DSS)
Provide interactive ad hoc support for decision making
Example: A what-if-analysis to determine where to spend advertising dollars
Executive Information Systems (EIS)
Provide critical information for executives and managers
Example: easy access to actions of competitors

26. Operational or Management Systems
Expert Systems
Provide expert advice
Example: credit application advisor
Knowledge Management Systems
Support creation, organization and dissemination of business knowledge throughout company
Example: Intranet access to best business practices
Support either operations or management applications

27. Classifications of IS by scope
Functional business systems
Focus on operational and managerial applications of basic business functions
Examples: support accounting, finance or marketing
Strategic information systems
Help get a strategic advantage over its customers
Examples: shipment tracking, e-commerce web systems
Cross-functional information systems
Systems that are combinations of several types of information systems
Provide support for many functions
In reality most systems are Cross-functional

28. Challenges and Opportunities of IT

29. Measuring success of an IS
Efficiency
Minimize cost, time and use of information resources
Effectiveness
Support business strategies
Enable business processes
Enhance organizational structure and culture
Increase the customer and business value

30. Developing IS Solutions

31. Ethical challenges of IT applications

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?
What uses of IT might be considered improper or harmful to other individuals or society? Improper uses might include collecting data that you don’t need, not protecting personal customer data, etc.
What is the proper business use of the Internet or a company’s IT resources? Is it proper to use the company’s computers to surf the web, send personal , etc.
How can you protect yourself from computer crime? Virus and spam protection, never replying to phishing, etc.

33. IT Careers
Outsourcing of basic programming to India, the Middle-East and Asia-Pacific countries
Strong employment opportunities in other areas in IS
Shortage of qualified IS personnel
Long-term job outlook positive and exciting

34. Career Opportunities in IS

35. Job growth Among the fastest growing occupations through 2012
Systems Analyst,
Database administrators,
Other managerial-level positions
Network specialists
Information security

36. 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
Repeating definition from earlier but adding accepting inputs, producing outputs, and transformation

37. Systems have three basic functions:
Input involves capturing and assembling elements that enter the system to be processed
Processing involves transformation process that convert input into output
Output involves transferring elements that have been produced by the transformation process to their ultimate destination

38. A business as a system
A business can be viewed as a system. This system does not operate in a vacuum rather it functions in an environment containing other systems. A business is an open system in that it interacts with other systems in the environment. It is also an adaptive system in that it can change itself or its environment in order to survive.

39. Information systems model
Major components of an information: people, hardware, software, data and networks.
These components perform input, processing, output, storage, and control activities.

40. Components of an IS People Hardware Resources Software Resources
End users: the people who use the IS or the information from the IS
IS specialists: the people who develop and operate IS
Hardware Resources
All physical devices used in information processing
Machines, data media, peripherals
Software Resources
All information processing instructions including programs and procedures
System software, application software and procedures
Hardware:
Peripherals include keyboard, mouse, video screen, printer

41. Components of an IS (cont.)
Data Resources
Facts about the business transactions
Processed and organized information
Databases of organized data
Network Resources
Communications media
Network infrastructure: hardware and software
The Internet, intranets and extranets
Communications media: twisted pair wire, coaxial cable, wireless technologies

42. Data versus Information
Data are raw facts about physical phenomena or business transactions
Information is data that has been converted into meaningful and useful context for end users
Example:
Sales data is names, quantities and dollar amounts
Sales information is amount of sales by product type, sales territory or salesperson

43. IS Activities Input of data resources
Data entry activities
Processing of data into information
E.g., calculate, compare, sort, classify, summarize
Output of information products
Messages, reports, forms and graphic images
Storage of data resources
Data elements and databases
Control of system performance
Monitoring and evaluating feedback

44. Recognizing IS
As a business professional, you should be able to look at an IS 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

45. Management Concerns Rankings IT and business alignment
IT strategic planning
Security and privacy
Retaining IT professionals
Measuring the value of IT investment
Measuring the performance of IT
Creating an information architecture
Complexity reductions
Speed and agility
IT governance

46. Management Concerns Rankings BPR Introducing rapid business solutions
Evolving CIO leadership role
IT asset management
Managing outsourcing readership
Leveraging the legacy investment …
Globalization
Offshore outsourcing
Societal implication of IT