Chapter 1 Foundations
of Information Systems
in Business
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
Chapter 1 Foundations of Information Systems in Business
2
What is a System?
◼ A set of interrelated components
◼ With a clearly defined boundary
◼ Working together
◼ To achieve a common set of objectives
Chapter 1 Foundations of Information Systems in Business
3
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
Chapter 1 Foundations of Information Systems in Business
4
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
◼ focus will be on computer-based information
systems (CBIS)
Chapter 1 Foundations of Information Systems in Business
5
What Should Business
Professionals Know?
Chapter 1 Foundations of Information Systems in Business
6
Fundamental Roles of IS in
Business
Chapter 1 Foundations of Information Systems in Business
7
Trends in Information Systems
Chapter 1 Foundations of Information Systems in Business
8
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
Chapter 1 Foundations of Information Systems in Business
9
How E-Business is Being Used
Chapter 1 Foundations of Information Systems in Business
10
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
Chapter 1 Foundations of Information Systems in Business
11
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
Chapter 1 Foundations of Information Systems in Business
12
Purposes of Information Systems
Chapter 1 Foundations of Information Systems in Business
13
Operations Support Systems
◼ What do they do?
❖ Efficiently process business transactions
❖ Control industrial processes
❖ Support communications and collaboration
❖ Update corporate databases
Chapter 1 Foundations of Information Systems in Business
14
Types of OSS
◼ Transaction Processing Systems
❖ Record and process business transactions
❖ Example: 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
❖ Example: email, video conferencing
Chapter 1 Foundations of Information Systems in Business
15
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
Chapter 1 Foundations of Information Systems in Business
16
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
Chapter 1 Foundations of Information Systems in Business
17
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
Chapter 1 Foundations of Information Systems in Business
18
Other Information Systems
◼ Expert Systems - provide expert advice
◼ In artificial intelligence, an expert system is a computer
system that emulates the decision-making ability of a
human expert.
❖ Example: credit application advisor
◼ Knowledge Management Systems - support creation,
organization, and dissemination of business knowledge
throughout company
❖ Example: intranet access to best business practices
◼ Strategic Information Systems - help get a strategic
advantage over customer
❖ Example: shipment tracking, e-commerce Web
systems
◼ Functional Business Systems - focus on operational and
managerial
Chapter applications
1 Foundations of Information of basic business functions
Systems in Business
19
IT Challenges and Opportunities
Chapter 1 Foundations of Information Systems in Business
20
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
Chapter 1 Foundations of Information Systems in Business
21
Developing IS Solutions
Chapter 1 Foundations of Information Systems in Business
22
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
◼ Potential Risks
❖ Consumer boycotts
❖ Work stoppages
❖ Government intervention
◼ Possible Responses
❖ Codes of ethics
❖ Incentives
❖ Certification
Chapter 1 Foundations of Information Systems in Business
23
Ethical
Responsibilities(Assignment )
◼ 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?
Chapter 1 Foundations of Information Systems in Business
24
IT Careers
◼ Economic downturns affect 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
Chapter 1 Foundations of Information Systems in Business
25
IT Careers
Chapter 1 Foundations of Information Systems in Business
26
Chapter 1 Foundations of Information Systems in Business
27
IT Careers
◼ Job increases are 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
Chapter 1 Foundations of Information Systems in Business
28
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
Chapter 1 Foundations of Information Systems in Business
29
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
Chapter 1 Foundations of Information Systems in Business
30
Components of an IS
Chapter 1 Foundations of Information Systems in Business
31
Information System Resources
◼ People Resources
❖ Specialists
❖ End users
◼ Hardware Resources
❖ Machines
❖ Media
◼ Software Resources
❖ Programs
❖ Procedures
◼ 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
Chapter 1 Foundations of Information Systems in Business
32
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
Chapter 1 Foundations of Information Systems in Business
33
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
Chapter 1 Foundations of Information Systems in Business
34
Recognizing IS
◼ 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
Chapter 1 Foundations of Information Systems in Business
35
◼ Information is a processed,
organised data presented in a given
context and is useful to humans.
◼ Data is an individual unit that contains raw
material which does not carry any specific
meaning.
◼ Information is a group of data that
collectively carry a logical meaning.
Chapter 1 Foundations of Information Systems in Business
36
◼ Data is the complete list of facts and
details like text, observations, figures,
symbols and description of things.
◼ It is the raw list of facts that are processed
to gain information.
◼ The basic concept of data is associated
with scientific research collected by
different research organizations.
Chapter 1 Foundations of Information Systems in Business
37
◼ Information is the processed, organised
and structured data.
◼ It provides context for data.
◼ However, both the terms are used
together, information can be easily
understood than data.
Chapter 1 Foundations of Information Systems in Business
38
Data Information
Data is unorganised raw facts that need processing without which it is Information is a processed, organised data presented in a given context
seemingly random and useless to humans and is useful to humans.
Data is an individual unit that contains raw material which does not Information is a group of data that collectively carry a logical meaning.
carry any specific meaning.
Data doesn’t depend on information. Information depends on data.
It is measured in bits and bytes. Information is measured in meaningful units like time, quantity, etc.
Data is never suited to the specific needs of a designer. Information is specific to the expectations and requirements because all
the irrelevant facts and figures are removed, during the transformation
process.
An example of data is a student’s test score The average score of a class is the information derived from the given
data.
Chapter 1 Foundations of Information Systems in Business
39