Overview of Computer-Based
Information Systems
• A computer-based information system (CBIS) is an information system
that uses computer technology to perform some or all of its intended
tasks. Although not all information systems are computerized, today most
are. For this reason the term “information system” is typically used
synonymously with “computer-based information system.” The basic
components of computer based information systems are listed below. The
first four are called information technology components. Figure 1.3
illustrates how these four components interact to form a CBIS.
1. • Hardware consists of devices such as the processor, monitor, keyboard,
and printer. Together, these devices accept, process, and display data and
information.
2. • Software is a program or collection of programs that enable the
hardware to process data.
3. • A database is a collection of related fi les or tables containing data.
4. • A network is a connecting system (wireline or wireless) that permits
different computers to share resources
5. • Procedures are the instructions for combining the above components
to process information and generate the desired output.
6. • People are those individuals who use the hardware and software,
interface with it, or utilize its output.
• Figure 1.4 illustrates how these components are
integrated to form the wide variety of information
systems found within an organization.
• Starting at the bottom of the figure, you see that the IT
components of hardware, software, networks (wireline
and wireless), and databases form the information
technology platform.
• IT personnel use these components to develop
information systems, oversee security and risk, and
manage data.
• These activities cumulatively are called information
technology services. The IT components plus IT
services comprise the organization’s information
technology infrastructure. At the top of the pyramid
are the various organizational information systems.
Computer-based information systems have many
capabilities. Table 1.3 summarizes the most important ones.
Information System - Classification By Support
Function
8
• Certain information systems support parts of
organizations,
• others support entire organizations,
• others support groups of organizations.
• Each department or functional area within an
organization has its own collection of
application programs, or information systems.
These functional area information systems
(FAISs) are supporting pillars for the
information systems located at the top of
Figure 1.4, namely, business intelligence
systems and dashboards.
• Each FAIS supports a particular functional area
within the organization. Examples are
accounting IS, finance IS, production/
operations management (POM) IS, marketing
IS, and human resources IS.
Finance and Accounting
• Managers use IT systems to forecast revenues
and business activity, to determine the best
sources and uses of funds, and to perform
audits to ensure that the organization is
fundamentally sound and that all financial
reports and documents are accurate.
Sales and marketing
• Managers use information technology to perform
the following functions:
• Product analysis: developing new goods and
services
• Site analysis: determining the best location for
production and distribution facilities
• Promotion analysis: identifying the best advertising
channels
• Price analysis: setting product prices to obtain the
highest total revenues
Manufacturing
• Managers use IT to process customer orders,
develop production schedules, control
inventory levels, and monitor product quality.
• They also use IT to design and manufacture
products. These processes are called
computer-assisted design (CAD) and computer-
assisted manufacturing (CAM).
Human Resources
• Managers in human resources use IT to manage the
recruiting process, analyze and screen job
applicants, and hire new employees.
• They also employ IT to help employees manage
their careers, to administer performance tests to
employees, and to monitor employee productivity.
• Finally, they rely on IT to manage compensation and
benefits packages.
• Two information systems support
the entire organization: enterprise
resource planning systems and
transaction processing systems.
ERP
• Enterprise resource planning (ERP) systems are
• Designed to correct a lack of communication among the
functional area ISs. For this reason Figure 1.4 shows ERP
systems spanning the FAISs. ERP systems were an
important innovation because the various functional
area ISs were often developed as standalone systems
and did not communicate effectively (if at all) with one
another.
• ERP systems resolve this problem by tightly integrating
the functional area ISs via a common database. In doing
so, they enhance communications among the
functional areas of an organization. For this reason,
experts credit ERP systems with greatly increasing
organizational productivity.
TPS
• A transaction processing system (TPS)
supports the monitoring, collection, storage,
and processing of data from the organization’s
basic business transactions, each of which
generates data.
• The TPS collects data continuously, typically in
real time—that is, as soon as the data are
generated—and it provides the input data for
the corporate databases.
• TPSs are considered critical to the success of
any enterprise because they support core
operations.
• Significantly, nearly all ERP systems are also
TPSs, but not all TPSs are ERP systems.
IOS
• Information systems that connect two or more
organizations are referred to as interorganizational
information systems (IOSs).
• IOSs support many interorganizational operations,
of which supply chain management is the best
known.
• An organization’s supply chain is the flow of
materials, information, money, and services from
suppliers of raw materials through factories and
warehouses to the end customers.
• Note that the supply chain in Figure 1.5 shows
physical flows, information flows, and financial
flows.
E-Commerce
• Electronic commerce (e-commerce) systems are
another type of interorganizational information
system.
• These systems enable organizations to conduct
transactions, called business-to business (B2B)
electronic commerce, and customers to conduct
transactions with businesses, called business-to-
consumer (B2C) electronic commerce. E-commerce
systems typically are Internet-based. Figure 1.5
illustrates B2B and B2C electronic commerce.