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Fundamentals of Information Systems Fourth Edition

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Title: Fundamentals of Information Systems Fourth Edition


1
Fundamentals of Information Systems Fourth Edition
  • Chapter 1
  • An Introduction to Information Systems in
    Organizations

2
Principles and Learning Objectives
  • The value of information is directly linked to
    how it helps decision makers achieve the
    organizations goals
  • Distinguish data from information and describe
    the characteristics used to evaluate the quality
    of data

3
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

4
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

5
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

6
Principles and Learning Objectives (continued)
  • Information systems personnel are the key to
    unlocking the potential of any new or modified
    system
  • Define the types of roles, functions, and careers
    available in information systems

7
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

8
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

9
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

10
Data, Information, and Knowledge (continued)
Table 1.1 Types of Data
11

Data, Information, and Knowledge (continued)
Figure 1.1 Defining and Organizing
Relationships Among Data Creates
Information
12

Data, Information, and Knowledge (continued)
Figure 1.2 The Process of Transforming Data into
Information
13
The Characteristics of Valuable Information
Table 1.2 Characteristics of Valuable Information
14
The Characteristics of Valuable Information
(continued)
Table 1.2 Characteristics of Valuable
Information (continued)
15
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

16
What Is an Information System?
Figure 1.3 The Components of an Information
System
17
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

18
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

19
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

20
Computer-Based Information Systems (continued)
Figure 1.4 The Components of a Computer-Based
Information System
21
Computer-Based Information Systems (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

22
Computer-Based Information Systems (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

23
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

24
Business Information Systems (continued)
Figure 1.5 Business Information Systems
25
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

26
Electronic and Mobile Commerce (continued)
Figure 1.8 Electronic Business
27
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

28
Transaction Processing Systems (continued)
Figure 1.9 A Payroll Transaction Processing
System
29
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

30
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

31
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

32
Management Information Systems (continued)
Figure 1.10 Management Information System
33
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

34
Decision Support Systems (continued)
Figure 1.11 Essential DSS Elements
35
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

36
Artificial Intelligence
Figure 1.12 The Major Elements of Artificial
Intelligence
37
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

38
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

39
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

40
Systems Development (continued)
Figure 1.14 An Overview of Systems Development
41
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

42
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

43
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

44
Organizations and Information Systems (continued)
Figure 1.15 A General Model of an Organization
45
Organizations and Information 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

46
Organizations and Information Systems (continued)
Figure 1.16 The Value Chain of a Manufacturing
Company
47
Organizations and Information 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

48
Organizational Culture and Change
  • Organizational culture
  • Major understandings and assumptions
  • Influences information systems
  • Organizational change
  • How organizations plan for, implement, and handle
    change
  • Can be sustaining or disruptive

49
User Satisfaction and Technology Acceptance
  • Technology Acceptance Model (TAM) specifies
    factors that can lead to higher acceptance and
    usage of technology
  • Technology diffusion measure of widespread use
    of technology
  • Technology infusion extent to which technology
    permeates a department

50
User Satisfaction and Technology Acceptance
(continued)
  • Competitive advantage significant, long-term
    benefit to a company over its competition
  • Ability to establish and maintain a competitive
    advantage is vital to the companys success

51
Factors That Lead Firms to Seek Competitive
Advantage
  • Five-forces model identifies key factors
  • Rivalry among existing competitors
  • Threat of new entrants
  • Threat of substitute products and services
  • Bargaining power of buyers
  • Bargaining power of suppliers

52
Strategic Planning for Competitive Advantage
  • Cost leadership
  • Deliver the lowest possible products and services
  • Differentiation
  • Deliver different products and services
  • Niche strategy
  • Deliver to a small, niche market
  • Altering the industry structure
  • Change the industry to become more favorable to
    organization

53
Strategic Planning for Competitive Advantage
(continued)
  • Creating new products and services
  • Introduce periodically or frequently
  • Improving existing product lines and service
  • Make real or perceived improvements
  • Other strategies
  • Growth in sales
  • First to market
  • Customizing products and services
  • Hiring the best people

54
Performance-Based Information Systems
  • Considers both strategic advantage and costs
  • Uses productivity, return on investment (ROI),
    net present value, and other measures of
    performance

55
Performance-Based Information Systems (continued)
Figure 1.18 Three Stages in the Business Use of
Information Systems
56
Productivity
  • Output achieved divided by input required
  • Higher level of output for a given level of input
    means greater productivity

57
Return on Investment and the Value of Information
Systems
  • Earnings growth
  • Increase in profits
  • Market share
  • Percentage of sales in relation to total market
  • Customer awareness and satisfaction
  • Based on feedback from internal and external
    users
  • Total cost of ownership
  • Measurement of total cost of owning computer
    equipment

58
Risk
  • Managers must consider the risks of designing,
    developing, and implementing new or modified
    information systems
  • Information system may be a failure
  • Costs of development and implementation can be
    greater than the returns from the new system

59
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

60
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

61
Roles, Functions, and Careers in the IS
Department (continued)
Figure 1.19 The Three Primary Responsibilities
of Information Systems
62
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

63
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

64
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

65
Global Challenges in Information Systems
  • Cultural challenges
  • Language challenges
  • Time and distance challenges
  • Infrastructure challenges
  • Currency challenges

66
Global Challenges in Information Systems
(continued)
  • Product and service challenges
  • Technology transfer issues
  • State, regional, and national laws
  • Trade agreements

67
Summary
  • Data raw facts
  • Information organized collection of facts has
    additional value beyond the value of facts
    themselves
  • System components input, processing, output, and
    feedback
  • Computer-based information system (CBIS)
  • Single set of hardware, software, databases,
    telecommunications, people, and procedures
  • Collect, manipulate, store, and process data into
    information

68
Summary (continued)
  • Transaction processing system (TPS) organized
    collection of people, procedures, software,
    databases, and devices used to record completed
    business transactions
  • Management information system (MIS) organized
    collection of people, procedures, software,
    databases, and devices used to provide routine
    information to managers and decision makers

69
Summary (continued)
  • Knowledge management system (KMS) 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

70
Summary (continued)
  • 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
  • Competitive advantage significant, long-term
    benefit to a company over its competition
  • Primary responsibilities in information systems
    operations, systems development, and support
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