Chap 01

Fundamentals of Information
Systems
Fourth Edition
Chapter 1
An Introduction to Information Systems
in Organizations
Why Learn About Information Systems

in Organizations?
Information systems (ISs) can cut costs and
increase profits
Students in most fields need to know ISs
Management major might be hired to design a
system to improve productivity
Biochemistry major might be hired to conduct drug
research using computer techniques
Fundamentals of Information Systems, Fourth Edition
Introduction
Information system (IS)
Set of interrelated components: collect, manipulate,
store, and disseminate data and information
Provides feedback to meet an objective
Examples: ATMs, airline reservation systems, course
reservation systems
Information Concepts: Data,

Information, and Knowledge
Data: raw facts
Alphanumeric, image, audio, and video
Information: collection of facts organized in such a

way that they have additional value beyond the
value of the facts themselves
Data, Information, and Knowledge

(continued)
Table 1.1: Types of Data


(continued)
Figure 1.1: Defining and Organizing Relationships Among Data Creates

Information

(continued)
Figure 1.2: The Process of Transforming Data into Information

The Characteristics of Valuable

Information
Table 1.2: Characteristics of Valuable Information

The Characteristics of Valuable

Information (continued)
Table 1.2: Characteristics of Valuable Information (continued)

The Value of Information

Value of information is directly linked to how it helps
decision makers achieve their organizations goals
For example, value of information might be
measured in:
Time required to make a decision
Increased profits to the company
10
What Is an Information System?
Figure 1.3: The Components of an Information System

11
Input, Processing, Output, Feedback

Input: the activity of gathering and capturing raw
data
Processing: converting or transforming data into
useful outputs
Output: production of useful information, usually in
the form of documents and reports
Feedback: output that is used to make changes to
input or processing activities
12
Manual and Computerized Information

Systems
An information system can be:
Manual
Example: developing patterns and trends on graph
paper for stock analysis
Computerized
Example: using program trading to track the market
and trade large blocks of stocks when discrepancies
occur
13
Computer-Based Information Systems

Computer-based information system (CBIS):
single set of hardware, software, databases,
telecommunications, people, and procedures
configured to collect, manipulate, store, and
process data into information
14

(continued)
Figure 1.4: The Components of a Computer-Based Information System

15

(continued)
CBIS components
Hardware: computer equipment used to perform
input, processing, and output activities
Software: computer programs that govern the
operation of the computer
Database: organized collection of facts and
information
Telecommunications: electronic transmission of
signals for communications
Networks: connect computers and equipment in a
building, around the country, and around the world
16

(continued)
CBIS components (continued)
Internet: worlds largest computer network
People: manage, run, program, and maintain the
system
Procedures: strategies, policies, methods, and rules
for using a CBIS
17
Business Information Systems

Most common types of information systems used in
business organizations
Electronic and mobile commerce systems

Transaction processing systems
Management information systems
Decision support systems
Specialized business information systems
18
Business Information Systems

(continued)
Figure 1.5: Business Information Systems

19
Electronic and Mobile Commerce

E-commerce: any business transaction executed
electronically between parties
Companies (B2B)
Companies and consumers (B2C)
Consumers and other consumers (C2C)
Companies and the public sector
Consumers and the public sector
20
Electronic and Mobile Commerce

(continued)
Figure 1.8: Electronic Business
21
Enterprise Systems: Transaction

Processing Systems and Enterprise
Resource Planning
Transaction: business-related exchange
Payments to employees
Sales to customers
Payments to suppliers
Transaction processing system (TPS):

organized collection of people, procedures,
software, databases, and devices used to record
completed business transactions
22
Transaction Processing Systems

(continued)
Figure 1.9: A Payroll Transaction Processing System

23
Enterprise Resource Planning

Integrated programs capable of managing a
companys vital business operations for an entire
multisite organization
Coordinate planning, inventory control, production,
and ordering
24
Information and Decision Support

Systems
An effective TPS provides a number of benefits to a
company
A TPS can speed business activities and reduce
clerical costs
Data stored in TPSs is used to help managers
make better decisions
25
Management Information Systems

Management information system (MIS)
Organized collection of people, procedures,
software, databases, and devices
Provides routine information to managers/decision
makers
Primary focus is operational efficiency
26
Management Information Systems

(continued)
Figure 1.10: Management Information System

27
Decision Support Systems

Decision support system (DSS)
Organized collection of people, procedures,
software, databases, and devices
Supports problem-specific decision making
Focus is on decision-making effectiveness
28
Decision Support Systems (continued)
Figure 1.11: Essential DSS Elements

29
Specialized Business Information

Systems: Knowledge Management,
Artificial Intelligence, Expert Systems,
and Virtual Reality
Knowledge management systems (KMSs): an
organized collection of people, procedures,
software, databases, and devices to create, store,
share, and use the organizations knowledge and
experience
Artificial intelligence (AI): field in which the
computer system takes on the characteristics of
human intelligence
30
Artificial Intelligence
Figure 1.12: The Major Elements of Artificial Intelligence

31
Expert Systems
Give the computer the ability to make suggestions
and act like an expert in a particular field
Allow organizations to capture and use the wisdom
of experts and specialists
The knowledge base contains the collection of
data, rules, procedures, and relationships that must
be followed to achieve value or the proper outcome
32
Virtual Reality
Simulation of a real or imagined environment that
can be experienced visually in three dimensions
Immersive virtual reality
Applications that are not fully immersive
Can be a powerful medium for communication,
entertainment, and learning
33
Systems Development
Systems development: creating or modifying
existing business systems
Systems development can be:
Performed in-house
Outsourced
To improve results of a systems development

project, it is divided into several steps
34
Systems Development (continued)
Figure 1.14: An Overview of Systems Development

35
Systems Investigation and Analysis

Systems investigation: gain understanding of the
problem to be solved or opportunity to be
addressed
Systems analysis: defines problems and
opportunities of the existing system
36
Systems Design, Implementation,

Maintenance, and Review
Systems design: how the new system will work to
meet the business needs defined during systems
analysis
Systems implementation: creating or acquiring
the various system components defined in the
design step, assembling them, and putting the new
system into operation
Systems maintenance and review: check and
modify the system so that it continues to meet
changing business needs
37
Organizations and Information

Systems
Organization: collection of people and other
resources established to accomplish a set of goals
An organization is a system
Inputs: resources (materials, people, money)
Outputs: goods or services
38

Systems (continued)
Figure 1.15: A General Model of an Organization

39

Systems (continued)
Value chain: series (chain) of activities that
includes inbound logistics, warehouse and storage,
production, finished product storage, outbound
logistics, marketing and sales, and customer service
Upstream management: management of raw
materials, inbound logistics, and warehouse and
storage facilities
Downstream management: management of
finished product storage, outbound logistics,
marketing and sales, and customer service
40

Systems (continued)
Figure 1.16: The Value Chain of a Manufacturing Company

41

Systems (continued)
Supply chain management (SCM)
Determines required supplies, needed quantities,
processing, and shipment
Customer relationship management (CRM)

Helps company manage all aspects of customer
encounters, including marketing, advertisement,
sales, service, and maintaining loyalty
42
Careers In Information Systems

Degree programs
Degrees in information systems
Business degrees with a global or international
orientation
Computer systems are making IS professionals

work easier
Opportunities in information systems are not
confined to single countries
43
Roles, Functions, and Careers in the

IS Department
Primary responsibilities in information systems
Operations: focuses on the efficiency of IS functions
Systems development: focuses on development
projects and ongoing maintenance and review
Support: provides user assistance, data
administration, user training, and Web administration
44
Roles, Functions, and Careers in the IS

Department (continued)
Figure 1.19: The Three Primary Responsibilities of Information Systems

45
Typical IS Titles and Functions

Chief Information Officer (CIO)
Employs IS departments equipment and personnel to
help the organization attain its goals
LAN administrators
Set up and manage the network hardware, software,
and security processes
46
Typical IS Titles and Functions

(continued)
Internet careers
Internet strategists and administrators

Internet systems developers
Internet programmers
Internet or Web site operators
Certification
Examples: Microsoft Certified Systems Engineer,
Certified Information Systems Security Professional
(CISSP), and Oracle Certified Professional
47
Other IS Careers
New and exciting careers have developed in
security and fraud detection and prevention
Chief Information Security Officer
Chief Security Officer
Chief Privacy Officer
Working for a large consulting firm such as

Accenture, IBM, and EDS
Developing or selling products for a hardware or
software vendor
Video game development
48
Global Challenges in Information

Systems
Cultural challenges
Language challenges
Time and distance challenges
Infrastructure challenges
Currency challenges
49
Global Challenges in Information

Systems (continued)
Product and service challenges

Technology transfer issues
State, regional, and national laws
Trade agreements
50

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Fundamentals of Information

Why Learn About Information Systems

Fundamentals of Information Systems, Fourth Edition

Fundamentals of Information Systems, Fourth Edition

Information Concepts: Data,

Information: collection of facts organized in such a

Fundamentals of Information Systems, Fourth Edition

Data, Information, and Knowledge

Table 1.1: Types of Data

Data, Information, and Knowledge

Figure 1.1: Defining and Organizing Relationships Among Data Creates

Data, Information, and Knowledge

Figure 1.2: The Process of Transforming Data into Information

The Characteristics of Valuable

Table 1.2: Characteristics of Valuable Information

The Characteristics of Valuable

Table 1.2: Characteristics of Valuable Information (continued)

The Value of Information

Fundamentals of Information Systems, Fourth Edition

What Is an Information System?

Figure 1.3: The Components of an Information System

Input, Processing, Output, Feedback

Fundamentals of Information Systems, Fourth Edition

Manual and Computerized Information

Fundamentals of Information Systems, Fourth Edition

Computer-Based Information Systems

Fundamentals of Information Systems, Fourth Edition

Computer-Based Information Systems

Figure 1.4: The Components of a Computer-Based Information System

Computer-Based Information Systems

Computer-Based Information Systems

Fundamentals of Information Systems, Fourth Edition

Business Information Systems

Electronic and mobile commerce systems

Fundamentals of Information Systems, Fourth Edition

Business Information Systems

Figure 1.5: Business Information Systems

Electronic and Mobile Commerce

Fundamentals of Information Systems, Fourth Edition

Electronic and Mobile Commerce

Figure 1.8: Electronic Business

Fundamentals of Information Systems, Fourth Edition

Enterprise Systems: Transaction

Transaction processing system (TPS):

Transaction Processing Systems

Figure 1.9: A Payroll Transaction Processing System

Enterprise Resource Planning

Fundamentals of Information Systems, Fourth Edition

Information and Decision Support

Fundamentals of Information Systems, Fourth Edition

Management Information Systems

Primary focus is operational efficiency

Fundamentals of Information Systems, Fourth Edition

Management Information Systems

Figure 1.10: Management Information System

Decision Support Systems

Focus is on decision-making effectiveness

Fundamentals of Information Systems, Fourth Edition

Decision Support Systems (continued)

Figure 1.11: Essential DSS Elements

Specialized Business Information

Figure 1.12: The Major Elements of Artificial Intelligence