Foundations of Information Systems
Why should you study information systems?How does a firm use information systems?
What are the components of an information system?
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Why study Information Systems and Information Technology?
Vital component of successful businessesHelps businesses expand and competeBusinesses use IS and IT
To improve efficiency and effectiveness of business processes
For managerial decision making
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What is a system?
A system Is a set of interrelated componentsWith a clearly defined boundaryWorking together to achieve a common set of
objectives
“A system is an orderly grouping of interdependent components linked together according to a plan to achieve a specific objective”
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Characteristics of a System
OrganizationInteractionInterdependenceIntegrationCentral Objective
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Elements of a System
Input and OutputProcessorControlFeedbackEnvironmentBoundaries and Interface
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Types of SystemsPhysical or AbstractOpen or Closed
o Characteristics of Open System Input from outside Entropy Process, output and cycles Differentiation Equifinality
“man-made” information systemso Formal Information Systemso Informal Information Systemso Computer-Based Information Systems
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What is a system(again)?
A system Is a set of interrelated componentsWith a clearly defined boundaryWorking together to achieve a common set of
objectivesBy accepting inputs and producing outputs in an
organized transformation process
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Systems have three basic functions:
Input involves capturing and assembling elements that enter the system to be processed
Processing involves transformation process that convert input into output
Output involves transferring elements that have been produced by the transformation process to their ultimate destination
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A business as a system
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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
amountsSales information is amount of sales by product
type, sales territory or salesperson
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What is an Information System?
An organized combination of PeopleHardwareSoftwareCommunications networksData resourcesPolicies and procedures
That stores, retrieves, transforms, and disseminates information in an organization
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Components of an ISPeople
End users: the people who use the IS or the information from the IS
IS specialists: the people who develop and operate IS
Hardware ResourcesAll physical devices used in information processingMachines, data media, peripherals
Software ResourcesAll information processing instructions including
programs and proceduresSystem software, application software and
procedures
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Components of an IS (cont.)
Data ResourcesFacts about the business transactionsProcessed and organized informationDatabases of organized data
Network ResourcesCommunications mediaNetwork infrastructure: hardware and softwareThe Internet, intranets and extranets
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Information System (IS) versus Information Technology (IT)
IS is all the components and resources necessary to deliver information and functions to the organization
IT is hardware, software, networking and data management
In theory, IS could be paper based But we will focus on Computer-Based
Information Systems (CBIS)
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IS Function represents
Major functional area of businessImportant contributor to operational efficiency,
employee productivity, morale, customer service and satisfaction
Major source of information and support for effective decision making
Vital ingredient in developing competitive products and services in the global marketplace
Dynamic and challenging career opportunityKey component of today’s networked business
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Information systems model
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What should a Business Professional know about IS?
Foundation Concepts: fundamental behavioral, technical, business and managerial concepts
Information Technology: Hardware, software, networks, data management and Internet-based technology
Business Applications: Major uses of the IS in the organization
Development Processes: How to plan, develop and implement IS to meet business opportunities
Management Challenges: The challenges of effectively and ethically managing IT
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IS Knowledge Framework for Business Professionals
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What does IS do for a business?
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Business Applications expanding role over time
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Types of IS
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Operations support systems
What are they?Efficiently process business transactionsControl industrial processesSupport communications and collaborationUpdate corporate databases
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Types of Operations Support Systems
Transaction Processing SystemsRecord and process data from business
transactionsExamples: sales processing, inventory systems,
accounting systemsProcess Control Systems
Monitor and control physical processesExample: in a petroleum refinery use sensors to
monitor chemical processesEnterprise Collaboration Systems
Enhance team and work group communicationsExamples: e-mail, videoconferencing
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Two ways to process transactions
Batch Processing:Accumulate transactions over time and process
periodicallyExample: a bank processes all checks received
in a batch at nightOnline Processing:
Process transactions immediatelyExample: a bank processes an ATM withdrawal
immediately
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Management Support Systems
What are they?Provide information and support for effective
decision making by managers
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Types of Management Support Systems
Management Information Systems (MIS)Provide reports and displays to managersExample: daily sales analysis reports
Decision Support Systems (DSS)Provide interactive ad hoc support for decision
makingExample: A what-if-analysis to determine where
to spend advertising dollarsExecutive Information Systems (EIS)
Provide critical information for executives and managers
Example: easy access to actions of competitors
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Operational or Management Systems
Expert SystemsProvide expert adviceExample: credit application advisor
Knowledge Management SystemsSupport creation, organization and dissemination
of business knowledge throughout companyExample: Intranet access to best business
practices
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Classifications of IS by scope
Functional business systemsFocus on operational and managerial applications of
basic business functionsExamples: support accounting, finance or marketing
Strategic information systemsHelp get a strategic advantage over its customersExamples: shipment tracking, e-commerce web
systemsCross-functional information systems
Systems that are combinations of several types of information systems
Provide support for many functions
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Challenges and Opportunities of IT
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Measuring success of an IS
EfficiencyMinimize cost, time and use of information
resourcesEffectiveness
Support business strategiesEnable business processesEnhance organizational structure and culture Increase the customer and business value
What’s the difference between Efficiency and Effectiveness?
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Developing IS Solutions
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Ethical challenges of IT applications
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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?
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IS Activities
Input of data resourcesData entry activities
Processing of data into informationE.g., calculate, compare, sort, classify, summarize
Output of information productsMessages, reports, forms and graphic images
Storage of data resourcesData elements and databases
Control of system performanceMonitoring and evaluating feedback
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Recognizing IS
As a business professional, you should be able to look at an IS and identifyThe people, hardware, software, data and
network resources they useThe type of information products they produceThe way they perform input, processing, output,
storage and control activities
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Case : Aviall Inc.From Failure to Success with IT
Supplier of airplane parts and componentsHad lost track of its inventory
Price-tracking software didn’t work with inventory control or purchasing forecasting
Sent wrong parts to wrong customersSales falling
Needed a middleware vision: get all the software to work together
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Case Study Questions
1. Why do you think that Aviall failed in their implementation of an airplane parts and components inventory control system?
2. How ahs information technology brought new business success to Aviall? How did IT change Aviall’s business model?
3. How could other companies use Aviall’s approach to the use of IT to improve their business success? Give several examples.