1. McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

2. McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Foundations of Information Systems in Business Chapter 1

3. 1-3 1.Understand the concept of a system and how it relates to information systems 2.Explain why knowledge of information systems is important for business professionals Identify five areas of information systems knowledge needed Learning Objectives

4. 1-4 3.Give examples to illustrate how business applications of information systems can support a firm’s Business processes Managerial decision making Strategies for competitive advantage 4.Provide examples of information systems from your experiences with business organizations in the real world Learning Objectives

5. 1-5 Learning Objectives 5.Identify challenges that a business manager might face in managing the successful, ethical development and use of information technology 6.Provide examples of the components of real world information systems 7.Become familiar with the myriad of career opportunities in information systems

6. 1-6 Foundation Concepts Why study information systems and information technology? Vital component of successful businesses Helps businesses expand and compete Improves efficiency and effectiveness of business processes Facilitates managerial decision making and workgroup collaboration

7. 1-7 Case 1: Heidelberg, Honeywell, Eaton Smart services, smart products Using information technology to monitor, intervene, assist Machines relay information via the Internet and wireless systems Optimized performance Minimized maintenance and repair costs Less unanticipated downtime Increased value justifies premium charge

8. 1-8 Case Study Questions 1.Why should manufacturing companies build smart products and provide smart services? What business benefits can be gained? Provide examples beyond those discussed in this case 2.What information technologies are used by the companies in this case to build smart products and provide smart services? What other IT components might be used? Give examples of the capabilities they would provide

9. 1-9 Case Study Questions 3.What are some limitations of a smart products and smart services strategy? Give several examples that a business might encounter Explain how it might overcome them

10. 1-10 What is a System? A set of interrelated components With a clearly defined boundary Working together To achieve a common set of objectives

11. 1-11 What is an Information System? An organized combination of… People Hardware and software Communication networks Data resources Policies and procedures This system… Stores, retrieves, transforms, and disseminates information in an organization

12. 1-12 Information Technologies Information Systems All the components and resources necessary to deliver information and functions to the organization Could be paper based Information Technologies Hardware, software, networking, data management Our focus will be on computer-based information systems (CBIS)

13. 1-13 What Should Business Professionals Know?

14. 1-14 Fundamental Roles of IS in Business

15. 1-15 Trends in Information Systems

16. 1-16 What is E-Business? Using Internet technologies to empower… Business processes Electronic commerce Collaboration within a company Collaboration with customers, suppliers, and other business stakeholders In essence, an online exchange of value

17. 1-17 How E-Business is Being Used

18. 1-18 E-Business Use Reengineering Internal business processes Enterprise collaboration systems Support communications, coordination and coordination among teams and work groups Electronic commerce Buying, selling, marketing, and servicing of products and services over networks

19. 1-19 Types of Information Systems Operations Support Systems Efficiently process business transactions Control industrial processes Support communication and collaboration Update corporate databases Management Support Systems Provide information as reports and displays Give direct computer support to managers during decision-making

20. 1-20 Purposes of Information Systems

21. 1-21 Operations Support Systems What do they do? Efficiently process business transactions Control industrial processes Support communications and collaboration Update corporate databases

22. 1-22 Types of Operations Support Systems Transaction Processing Systems Record and process business transactions Examples: sales processing, inventory systems, accounting systems Process Control Systems Monitor and control physical processes Example: using sensors to monitor chemical processes in a petroleum refinery Enterprise Collaboration Systems Enhance team and workgroup communication Examples: email, video conferencing

23. 1-23 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. 1-24 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

25. 1-25 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

26. 1-26 Other Information 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

27. 1-27 Other Information Systems Strategic Information Systems Help get a strategic advantage over customer Examples: shipment tracking, e-commerce Web systems Functional Business Systems Focus on operational and managerial applications of basic business functions Examples: accounting, finance, or marketing

28. 1-28 IT Challenges and Opportunities

29. 1-29 Measuring IT Success Efficiency Minimize cost, time, and use of information resources Effectiveness Support business strategies Enable business processes Enhance organizational structure and culture Increase customer and business value

30. 1-30 Developing IS Solutions

31. 1-31 Challenges and Ethics of IT Application of IT Customer relationship management Human resources management Business intelligence systems Potential Harm Infringements on privacy Inaccurate information Collusion

32. 1-32 Challenges and Ethics of IT Potential Risks Consumer boycotts Work stoppages Government intervention Possible Responses Codes of ethics Incentives Certification

33. 1-33 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?

34. 1-34 IT Careers Economic downturns have affected all job sectors, including IT Rising labor costs are pushing jobs to India, the Middle East, and Asia-Pacific countries However, IT employment opportunities are strong, with new jobs emerging daily Shortages of IT personnel are frequent The long-term job outlook is positive and exciting

35. 1-35 IT Careers

36. 1-36 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 The need for those with problem-solving skills Falling hardware and software prices, which will fuel expanded computerization of operations

37. 1-37 The IS Function The IS function is… A major functional area of business An important contributor to operational efficiency, employee productivity, morale, customer service and satisfaction A major source of information and support for decision making A vital ingredient in developing competitive products and services in the global marketplace A dynamic and challenging career opportunity A key component of today’s networked business

38. 1-38 System Concepts: A Foundation System concepts help us understand… Technology: hardware, software, data management, telecommunications networks Applications: to support inter-connected information systems Development: developing ways to use information technology includes designing the basic components of information systems Management: emphasizes the quality, strategic business value, and security of an organization’s information systems

39. 1-39 Real World Case: Lufthansa Lufthansa wants to… Keep 3,500 pilots Trained on the latest technology and procedures Plugged into the corporate infrastructure Informed about schedules, weather events, and other facts that affect their jobs Control costs Provide Internet access to passengers

40. 1-40 Case Study Questions Are many of Lufthansa’s challenges identified in the case similar to those being experienced by other businesses in today’s global economy? What other tangible and intangible benefits, beyond those identified by Lufthansa, might a mobile workforce enjoy as a result of deploying mobile technologies?

41. 1-41 Case Study Questions Lufthansa was clearly taking a big risk with their decision to deploy notebook computers to their pilots. What steps did they take to manage the risk, and what others might be needed in today’s business environment?

42. 1-42 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. 1-43 Basic Functions of a System Input Capturing and assembling elements that enter the system to be processed Processing Transformation process that converts input into output Output Transferring transformed elements to their ultimate destination

44. 1-44 Cybernetic System All systems have input, processing, and output A cybernetic system, a self-monitoring, self- regulating system, adds feedback and control: Feedback is data about the performance of a system Control involves monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal

45. 1-45 A Cybernetic System

46. 1-46 A Business as a System

47. 1-47 Other System Characteristics If a system is one of the components of a larger system, it is a subsystem The larger system is an environment Several systems may share the same environment Some may be connected via a shared boundary, or interface Types of systems… Open Adaptive

48. 1-48 Components of an IS

49. 1-49 Information System Resources People Resources Specialists End users Hardware Resources Machines Media Software Resources Programs Procedures

50. 1-50 Information System Resources Data Resources Product descriptions, customer records, employee files, inventory databases Network Resources Communications media, communications processors, network access and control software Information Resources Management reports and business documents using text and graphics displays, audio responses, and paper forms

51. 1-51 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 Examples: Sales data is names, quantities, and dollar amounts Sales information is amount of sales by product type, sales territory, or salesperson

52. 1-52 IS Activities Input of data resources Data entry activities Processing of data into information Calculations, comparisons, sorting, and so on Output of information products Messages, reports, forms, graphic images Storage of data resources Data elements and databases Control of system performance Monitoring and evaluating feedback

53. 1-53 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

54. 1-54 Case 3: Aviall, Inc. Supplier of airplane parts and components Had lost track of its inventory Price-tracking software didn’t work with inventory control or purchasing forecasting Sent wrong parts to wrong customers Sales falling Needed a middleware vision Get all the software to work together

55. 1-55 Case Study Questions Why do you think that Aviall failed in their implementation of an airplane parts and components inventory control system? How has information technology brought new business success to Aviall? How did IT change Aviall’s business model? How could other companies use Aviall’s approach to the use of IT to improve their business success?

56. 1-56 Case 4: Continental Airlines Building customer loyalty has become crucial for success in the airline industry Continental employs CallMinder systems to… Monitor calls and keystrokes Data mine keystrokes and voice calls This technology resulted in… Fewer calls going to the help desk Higher customer satisfaction Reduction of flight confirmation calls Cost savings in excess of $1 million

57. 1-57 Case Questions What are the business benefits of the CallMiner system? How can new technologies like CallMiner help companies improve their customer service and gain a competitive edge in the marketplace? Andre Harris refers to calls to reconfirm a flight as “quite frankly, low-value calls.” Why are they classified as low value? Why do you think so many customers are placing such calls?