Fundamentals of Information Systems, Sixth Edition
Chapter 1
An Introduction to Information Systems in Organizations
Principles and Learning Objectives
•The value of information is directly linked to how it helps decision makers achieve the organization’s goals
–Distinguish data from information and describe the characteristics used to evaluate the quality of data
Fundamentals
Principles and Learning Objectives (continued)
•Knowing the potential impact of information systems and having the ability to put this knowledge to work can result in a successful personal career, organizations that reach their goals, and a society with a higher quality of life
–Identify the basic types of business information systems and discuss who uses them, how they are used, and what kinds of benefits they deliver
Fundamentals
Principles and Learning Objectives (continued)
•System users, business managers, and information systems professionals must work together to build a successful information system
–Identify the major steps of the systems development process and state the goal of each
Principles and Learning Objectives (continued)
•The use of information systems to add value to the organization can also give an organization a competitive advantage
–Identify the value-added processes in the supply chain and describe the role of information systems within them
–Identify some of the strategies employed to lower costs or improve service
–Define the term competitive advantage and discuss how organizations are using information systems to gain such an advantage
Principles and Learning Objectives (continued)
•IS personnel is a key to unlocking the potential of any new or modified system
–Define the types of roles, functions, and careers available in information systems
Why Learn About Information Systems in Organizations?
•Information systems used by:
–Sales representatives
–Managers
–Financial advisors
•Information systems:
–Indispensable tools to help you achieve your career goals
Fundamentals
Introduction
•Information system (IS):
–A set of interrelated components that collect, manipulate, and disseminate data and information and provide feedback to meet an objective
•Businesses:
–Can use information systems to increase revenues and reduce costs
Information Concepts
•Information:
–One of an organization’s most valuable resources
–Often confused with the term data
Data, Information, and Knowledge
•Data:
–Raw facts
•Information:
–Collection of facts organized in such a way that they have value beyond the facts themselves
•Process:
–Set of logically related tasks
•Knowledge:
–Awareness and understanding of a set of information
The Characteristics of Valuable Information
•If an organization’s information is not accurate or complete:
–People can make poor decisions, costing thousands, or even millions, of dollars
•Depending on the type of data you need:
–Some characteristics become more important than others
What is an Information System?
•Information system (IS) is a set of interrelated elements that:
–Collect (input)
–Manipulate (process)
–Store
–Disseminate (output) data and information
–Provide a corrective reaction (feedback mechanism) to meet an objective
Input, Processing, Output, Feedback
•Input:
–Activity of gathering and capturing raw data
•Processing:
–Converting data into useful outputs
•Output:
–Production of useful information, usually in the form of documents and reports
•Feedback:
–Information from the system that is used to make changes to input or processing activities
Manual and Computerized Information Systems
•An information system can be:
–Manual or computerized
•Example:
–Investment analysts manually draw charts and trend lines to assist them in making investment decisions
•Computerized information systems:
–Follow stock indexes and markets and suggest when large blocks of stocks should be purchased or sold
Computer-Based Information Systems
•Single set of hardware, software, databases, telecommunications, people, and procedures:
–That are configured to collect, manipulate, store, and process data into information
•Technology infrastructure:
–Includes all hardware, software, databases, telecommunications, people, and procedures
•Configured to collect, manipulate, store, and process data into information
Computer-Based Information Systems (continued)
•Hardware:
–Consists of computer equipment used to perform input, processing, and output activities
•Software:
–Consists of the computer programs that govern the operation of the computer
•Database:
–Organized collection of facts and information, typically consisting of two or more related data files
Computer-Based Information Systems (continued)
•Telecommunications, networks, and the Internet:
–The electronic transmission of signals for communications
•Networks:
–Connect computers and equipment to enable electronic communication
•Internet:
–World’s largest computer network, consisting of thousands of interconnected networks, all freely exchanging information
Computer-Based Information Systems (continued)
•Intranet:
–Internal network that allows people within an organization to exchange information and work on projects
•Extranet:
–Network that allows selected outsiders, such as business partners and customers, to access authorized resources of a company’s intranet
Computer-Based Information Systems (continued)
•People:
–The most important element in most computer-based information systems
•Procedures:
–Include strategies, policies, methods, and rules for using the CBIS
Business Information Systems
•Most common types of information systems:
–Those designed for electronic and mobile commerce, transaction processing, management information, and decision support
•Some organizations employ:
–Special-purpose systems, such as virtual reality, that not every organization uses
Electronic and Mobile Commerce
•E-commerce:
–Any business transaction executed electronically between:
•Companies (business-to-business, B2B)
•Companies and consumers (business-to-consumer, B2C)
•Consumers and other consumers (consumer-to-consumer, C2C)
•Business and the public sector
•Consumers and the public sector
Electronic and Mobile Commerce (continued)
•Mobile commerce (m-commerce):
–The use of mobile, wireless devices to place orders and conduct business
•E-commerce:
–Can enhance a company’s stock prices and market value
•Electronic business (e-business):
–Uses information systems and the Internet to perform all business-related tasks and functions
Enterprise Systems: Transaction Processing Systems and Enterprise Resource Planning
•Transaction:
–Any business-related exchange, such as payments to employees and sales to customers
•Transaction processing system (TPS):
–Organized collection of people, procedures, software, databases, and devices used to record completed business transactions
Enterprise Systems: Transaction Processing Systems and Enterprise Resource Planning (continued)
•Enterprise resource planning:
–Set of integrated programs that manages the vital business operations for an entire multisite, global organization
Information and Decision Support Systems
•Management information system (MIS):
–Organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers
Information and Decision Support Systems (continued)
•Decision support system (DSS):
–Organized collection of people, procedures, software, databases, and devices that support problem-specific decision making
–Can include:
•A collection of models used to support a decision maker or user (model base)
•A collection of facts and information to assist in decision making (database)
•Systems and procedures (user interface or dialogue manager) that help decision makers and other users interact with the DSS
Specialized Business Information Systems: Knowledge Management, Artificial Intelligence, Expert Systems, and Virtual Reality
•Knowledge management systems (KMSs):
–Organized collection of people, procedures, software, databases, and devices to:
•Create, store, share, and use the organization’s knowledge and experience
•Artificial intelligence (AI):
–Computer system takes on characteristics of human intelligence
Specialized Business Information Systems (continued)
•Expert systems:
–Give computer ability to make suggestions and function like an expert in a particular field
•Virtual realityand multimedia:
–Virtual reality:
•Simulation of a real or imagined environment that can be experienced visually in three dimensions
–Multimedia:
•Can include photos and images, the manipulation of sound, and special 3D effects
Systems Development
•Systems development:
–The activity of creating or modifying existing business systems
•Outsourcing:
–Allows a company to focus on what it does best and delegate other functions to companies with expertise in systems development
Systems Investigation and Analysis
•Goal of systems investigation:
–To gain clear understanding of the problem to be solved or opportunity to be addressed
•Systems analysis:
–Defines the problems and opportunities of the existing system
Systems Design, Implementation, and Maintenance and Review
•Systems design:
–Determines how new system will work to meet business needs defined during systems analysis
•Systems implementation:
–Acquiring various system components defined in design step, assembling them, and putting the new system into operation
•Systems maintenance and review:
–Checks and modifies the system so that it continues to meet changing business needs
Organizations and Information Systems
•Organization:
–Formal collection of people and other resources established to accomplish a set of goals
–A system
–Constantly uses money, people, materials, machines and other equipment, data, information, and decisions
Organizations and Information Systems (continued)