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Information Systems,

Ninth Edition

Chapter 1An Introduction to Information Systems

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Principles and Learning Objectives

The value of information is directly linked to how ithelps decision makers achieve the organizations

goals

Discuss why it is important to study and understandinformation systems

Distinguish data from information and describe thecharacteristics used to evaluate the value of data

Principles of Information Systems, Ninth Edition 2

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Principles and Learning Objectives(continued)

Computers and information systems are constantlymaking it possible for organizations to improve theway they conduct business

Name the components of an information system anddescribe several system characteristics


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Knowing the potential impact of informationsystems and having the ability to put thisknowledge to work can result in a successful

personal career and organizations that reach theirgoals

List the components of a computer-basedinformation system

Identify the basic types of business informationsystems and discuss who uses them, how they areused, and what kinds of benefits they deliver


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System users, business managers, and informationsystems professionals must work together to builda successful information system

Identify the major steps of the systems developmentprocess and state the goal of each


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Information systems must be applied thoughtfullyand carefully so that society, business, andindustry around the globe can reap their enormous

benefits Describe some of the threats to security and privacy

that information systems and the Internet can pose

Discuss the expanding role and benefits of

information systems in business and industry


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Why Learn About InformationSystems?

Information systems used in most professions

Sales representatives

To advertise products, communicate with customers

and analyzes sales trends. Managers

To make multimillion-dollar decisions, such asdeciding to build a new manufacturing plant orresearch a new cancer drug.

Corporate lawyer

To develop contracts and other legal documents fortheir firm.


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Why Learn About InformationSystems?

Indispensable tools to help us for achieving careergoals (gets first job, obtain promotions andadvance our career)

Business of all sizes could not survive withoutinformation systems to perform accounting andfinance operations.


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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,reduce costs and improving customer service.


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Information Concepts

Information

One of an organizations most valuable resources

Often confused with the term data


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Data, Information, and Knowledge

Data Raw facts; has little value beyond its existence.

Example: raw facts such as an employee`s nameand number of hoursworked in a week, inventory

part numbers or sales orders.

Information

Collection of facts organizedin such a way that theyhave valuebeyond the facts themselves.

Example: a particular manager might find theknowledge of total monthly sales to be more suitedto his purpose than (more valuable) the number ofsales for individual sales representatives


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Data, Information, and Knowledge

Process Set of logically related tasks (sorting, filtering,

manipulating, analyzing, selecting, etc)

Knowledge

Awareness and understanding of a set of information(how we are try to understand)


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Data, Information, and Knowledge(continued)

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Data, Information, and Knowledge(continued)

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The Characteristics of ValuableInformation

If an organizations information is not accurate orcomplete

People can make poor decisions, costing thousands,

or even millionsof dollars, late. Depending on the type of data you need

Some characteristics become more valuable thanothers


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The Value of Information

Is directly linked to how it helps manager ordecision makers achieve their organizations goals

Valuable information

Can help people and their organizationsperformtasks more efficiently and effectively


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Characteristics Definitions

Accurate Accurate information is error free. In some cases,inaccurate information is generated because in accuratedata is fed into the transformation process.

Complete Complete information contains all the important facts.For example, an investment report that does not include

all important costs is not complete.Economical Information should also be relatively economical to

produce. Decision makers must always balance thevalue of information with the cost of producing it.

Flexible Flexible information can be used for a variety of

purposes. For example, information on how muchinventory is on hand for a particular part can be used bya sales representative in closing a sale, by a productionmanager to determine whether more inventory isneeded and by a financial executive to determine thetotal value the company has invested in inventory.


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Reliable Reliable information can be depended on. In manycases, the reliability of the information depends on thereliability of the data collection method. In otherinstances, reliability depends on the source of theinformation.

Relevant Relevant information is important to the decision maker.Information that lumber prices might drop not berelevant to a computer chip manufacturer.

Simple Information should also be simple, not overly complex.Sophisticated and detailed information may not beneeded. Can cause information overload.

Timely Timely information is delivered when it is needed.Knowing last week`s weather conditions will not helpwhen trying to decide what coat to wear today.


C f

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Verified Information should be verified. This means that you cancheck it to make sure it is correct, perhaps by checkingmany sources for the same information.

Accessible Information should be easily accessible by authorizedusers to be obtained in the right format and at the right

time to meet their needs.Secure Information should be secure from access by

unauthorized users.


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System Concepts

System

Set of elements or components that interact toaccomplish goals

Components of a system Inputs

Processing mechanisms

Outputs

Feedback


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System Concepts (continued)

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System Performance and Standards

Efficiency ~ tepat, cekap

Measure of what is produced divided by what isconsumed.

Example: the efficiency of a motor is the energyproduced (in terms of work done) divided by theenergy consumed (in terms of electricity/fuel).

Gasoline engine is more efficient than a steam

engine because for the equivalent amount of energyinput (gas/coal), the gasoline engine produces moreenergy output.


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System Performance and Standards

Effectiveness ~ berkesan

Extent to which system attains its goals

Example: a company may have a goal to reduce

damaged parts by 100 units and a new controlsystem may be installed to help achieve this goal.

After actual reduction in damaged parts, however, isonly 85% units. The effectiveness of the controlsystem is 85%.


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System Performance and Standards(continued)

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System Performance and Standards(continued)

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What is an Information System?(continued)

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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 formof documents and reports

Feedback

Information from the system that is used to makechanges to input or processing activities


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Manual and Computerized InformationSystems

An information system can be:

Manual (Filing system)

Computerized


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Computer-Based Information Systems(CBIS)

Single set of hardware, software, databases,telecommunications, people, and procedures

That are configured to collect, manipulate, store, and

process data into information Example: payroll system, order entry system,

inventory

Technology infrastructure

Includes all hardware, software, databases,telecommunications, people, and procedures

Configured to collect, manipulate, store, and processdata into information


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Computer-Based Information Systems(continued)

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Hardware

Consists of computer equipment used to performinput, 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


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Telecommunications, networks, and the Internet

The electronic transmission of signals forcommunications; enables organizations to carry out

their processes and tasks through effectivecomputer networks.

Networks

Connect computers and equipment to enable

electronic communication Internet

Worlds largest computer network, consisting of

thousands of interconnected networks, all freely

exchanging informationPrinciples of Information Systems, Ninth Edition 34

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People

Can be the most important element in mostcomputer-based information systems.

Information system personnel include all the peoplewho manage, run, program and maintain the system.

Users are people who use information systems toget results~financial executives, marketing

representative, manufacturing operators. Procedures

Include strategies, policies, methods, and rules forusing the CBIS


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Business Information Systems

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Business Information Systems(continued)

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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


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Electronic and Mobile Commerce(continued)

Mobile commerce (m-commerce)

Transactions conducted anywhere, anytime

E-commerce

Can enhance a companys stock prices and market value M-commerce relies on the use of wireless communications to allow

managers and corporations to place order and conduct business usingportable phones, laptop connected to a network and other mobiledevices

Electronic business (e-business) Uses information systems and the Internet toperform all business-related tasks and functions


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Electronic and Mobile Commerce(continued)

Enterprise S stems Transaction

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Enterprise Systems: TransactionProcessing Systems and Enterprise

Resource Planning Transaction

Any business-related exchange, such as paymentsto employees and sales to customers

Transaction processing system (TPS)

Organized collection of people, procedures,software, databases, and devices usedto recordcompleted business transactions


Enterprise Systems: Transaction

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Enterprise Systems: TransactionProcessing Systems and Enterprise

Resource Planning (continued)

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Enterprise Resource Planning

Set of integrated programs that:

Manages the vital business operations for an entiremultisite, global organization

Most systems provide integrated software tosupport manufacturing and finance


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Management Information and DecisionSupport Systems

Transaction Processing Systems (TPS)

Can speed business activities and reduce clericalcosts

Management information system (MIS) Organized collection of people, procedures,

software, databases, and devices that

Provides routine information to managers and

decision makers


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Information and Decision SupportSystems (continued)

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I f ti d D i i S t

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Information and Decision SupportSystems (continued)

Specialized Business Information

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Specialized Business InformationSystems: 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 organizations

knowledge and experience

Artificial intelligence (AI)

Computer system takes on characteristics of humanintelligence



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Artificial Intelligence, Expert Systems,and Virtual Reality (continued)


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Artificial Intelligence, Expert Systems,and Virtual Reality (continued)

Expert systems

Give computer ability to make suggestions andfunction like an expert in a particular field Virtual reality

Simulation of a real or imagined environment that

can be experienced visually in three dimensions


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Systems Development

Systems development

The activity of creating or modifying existingbusiness systems

Outsourcing Contracting with outside professional services to

meet specific business needs.

Allows a company to focus on what it does best and

delegate other functions to companies with expertisein systems development


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Systems Development (continued)

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Systems Investigation and Analysis

Goal of systems investigation

To gain clear understanding of the problem to besolved or opportunity to be addressed

Systems analysis Defines the problems and opportunities of the

existing system


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Systems Design, Implementation, andMaintenance and Review

Systems design

Determines how new system will work to meetbusiness needs defined during systems analysis

Systems implementation Acquiring various system components defined in

design step, assembling them, and putting the newsystem into operation

Systems maintenance and review Checks and modifies the system so that it continues

to meet changing business needs


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Information Systems in Society,Business, and Industry

Information systems

Have been developed to meet the needs of all typesof organizations and people


Security Privacy and Ethical Issues in

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Security, Privacy, and Ethical Issues inInformation Systems and the Internet

Drawbacks of information systems

Always being connected at work and to your bossthrough the Internet, minimizing free time

To protect against threats to your privacy and data Install security and control measures

Use of information systems

Raises work concerns, including job loss through

increased efficiency


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Computer and Information SystemsLiteracy

Computer literacy

Knowledge of computer systems and equipment andthe ways they function

Information systems literacy Knowledge of how data and information are used by

individuals, groups, and organizations


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Information Systems in the FunctionalAreas of Business

Finance and accounting

Sales and marketing

Manufacturing

Human resource management

Legal information systems


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Information Systems in Industry

Airline industry

Investment firms

Banks Transportation industry

Publishing companies


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Information Systems in Industry(continued)

Healthcare organizations

Retail companies

Power management and utility companies Professional services


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Global Challenges in InformationSystems

Cultural challenges

Language challenges

Time and distance challenges

Infrastructure challenges Currency challenges


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Global Challenges in InformationSystems (continued)

Product and service challenges

Technology transfer issues

State, regional, and national laws

Trade agreements


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Summary

Data

Raw facts

Information

Collection of facts organized in such a way that theyhave value beyond the facts themselves

System

Set of elements that interact to accomplish a goal

Components of an information system Input, processing, output, and feedback


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Summary (continued)

Computer-based information system (CBIS)

Single set of hardware, software, databases,telecommunications, people, and procedures

Configured to collect, manipulate, store, and processdata into information

Transaction processing system (TPS)

Organized collection of people, procedures,software, databases, and devices

Used to record completed business transactions


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Summary (continued)

Management information system (MIS) Organized collection of people, procedures,

software, databases, and devices That provides routine information to managers and

decision makers Decision support system (DSS)

Organized collection of people, procedures,software, databases, and devices

Used to support problem-specific decision making Systems development

Creating or modifying existing business systems

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