An Introduction to Information Systems in Organizations

1
An Introduction to Information Systems in
Organizations

• Chapter 1

2
Learning Objectives

• What is information?
• What are the differences between data and
  information?
• How can you evaluate the quality of data?
• When is information valuable?

3
Learning Objectives

• What is an information system?
• What are the basic types of business information
  systems?
• Who uses them for which purposes?
• What are their benefits?

4
Learning Objectives

• How do you develop information systems?
• What are the major steps?
• Who are involved in these steps?
• What does each step accomplish?

5
Learning Objectives

• What are the value-added processes in the supply
  chain?
• How do information systems help these processes?
• How can the costs of an organization be lowered?
  How can an organization offer better service?
• What is a competitive advantage?
• Can organizations that use information systems to
  gain an advantage?

6
Learning Objectives

• What roles are involved in designing, developing,
  and maintaining information systems?
• What are the functions of each role?
• What careers are available in information systems?

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Information Concepts
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Information System

• A set of interrelated components that
• Collect data
• Manipulate data
• Disseminate data information
• Provide feedback to meet an objective.
• Examples ATMs airline reservation systems
  course reservation systems

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Data vs. Information

• Data Raw facts
• Example Name, last name, courses registered
• Information Collection of facts organized in
  such a way that they have value beyond the facts
  themselves
• Example Number of people that register for a
  course is more than a the course quota.

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The Process of Transforming Data into Information

• Easy to come up with arbitrary transformations
  (easy to generate information)
• Difficult to come up with a useful transformation
  (difficult to generate valuable information)

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Characteristics of Valuable Information (1)

• Accurate Does not contain errors
• Complete Contains all related facts
• Economical Time-wise and Cost-wise
• Flexible Can be used for different purposes
• Reliable The combined data is correct

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Characteristics of Valuable Information (2)

• Relevant Can be used by the organization
• Simple Easily understandable and usable
• Timely Delivered when it can still be used
• Verifiable Can be derived and confirmed again
• Accessible Those that want to use the
  information can locate and receive it
• Secure Accessible only to authorized individuals

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The Components of an Information System

• Wrong price
• Missing course

• Scan barcodes
• Type user name

• Calculate price
• Look up schedule

• Print receipt
• Display schedule

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Computer-Based Information Systems (CBIS)
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Components of a CBIS
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Components of a CBIS

• Hardware - computer equipment used to perform
  input, processing, and output activities.
• Software - computer programs that govern the
  operation of the computer.
• Database - an organized collection of facts and
  information, typically consisting of two or more
  related data files.
• People - the most important element in most
  computer-based information systems.
• Procedures - include the strategies, policies,
  methods, and rules for using the CBIS.

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Telecommunications, Network, and the Internet

• Telecommunications - the electronic transmission
  of signals for communications.
• Networks - used to connect computers and computer
  equipment in a building, around the country, or
  around the world to enable electronic
  communications.
• Internet - the worlds largest computer network,
  actually consisting of thousands of
  interconnected networks

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Business Information Systems
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Business Information Systems

• Electronic Commerce
• Transaction Processing Systems and Enterprise
  Resource Planning (ERP)
• Information and Decision Support Systems
• Special-Purpose Business Information Systems
  Artificial Intelligence, Expert Systems, and
  Virtual Reality

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E-Commerce

• Business-to-consumer
• Example Bookstore selling books to customers
  (amazon.com)
• Business-to-business
• Example A data processing company handling data
  services for a company (adp.com)
• Consumer-to-consumer
• Example A customer selling goods to another
  customer (e-bay.com)

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E-Commerce Greatly Simplifies the Purchasing
Process
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Transaction Processing Systems and ERP

• Transaction processing system (TPS) - an
  organized collection of people, procedures,
  software, databases, and devices used to record
  completed business transactions.
• Enterprise Resource Planning (ERP) System - a set
  of integrated programs capable of managing a
  companys vital business operations for an entire
  multisite, global organization.

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A Payroll Transaction Processing System
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Management Information System (MIS)(Help do
things right)

Report on number of components that need to be
sold
Report on number of components produced
Report on budget
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Decision Support Systems (DSS) (Help do the right
thing)

• Organizations often have to make decisions.
• DSSs help making decisions for particular
  problems.
• The focus of a DSS is on decision-making
  effectiveness.

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Essential DSS Elements
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Special-Purpose Business Information Systems

• Artificial intelligence (AI) systems
• Virtual reality systems
• Improve personal experience
• Virtual tour of a real-estate
• Expert systems
• Improve business intelligence
• Suggest products

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The Major Elements of Artificial Intelligence
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A Head-Mounted Display
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Systems Development

• The activity of creating or modifying existing
  business systems.
• Systems Investigation
• Systems Analysis
• Systems Design
• Systems Implementation
• Systems Maintenance and Review

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Organizations and Information Systems
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A General Model of an Organization
Material, money
Goods, services

• Organization - a formal collection of people and
  various other resources established to accomplish
  a set of goals

33
The Value Chain of a Manufacturing Company
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Information Systems in Supply Chain Management

• Where does the information system stand?
• Outside the process
• Supports monitoring, reporting, etc.
• Inside the process
• Participate actively by creating service

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Technology Diffusion, Infusion, and Acceptance

• Technology Diffusion - a measure of how widely
  technology is spread throughout an organization.
  
• Technology Infusion - is the extent to which
  technology permeates an area or department.
• Technology Acceptance Model (TAM) - specifies the
  factors that can lead to higher acceptance and
  usage of technology in an organization

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Competitive Advantage

• A significant and (ideally) long-term benefit to
  a company over its competition.
• Factors That Lead Firms to Seek Competitive
  Advantage
• Rivalry among Existing Competitors
• Threat of New Entrants
• Threat of Substitute Products and Services
• Bargaining Power of Customers and Suppliers

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Strategic Planning for Competitive Advantage

• Altering the Industry Structure
• Creating New Products and Services
• Improving Existing Product Lines and Services
• Using Information Systems for Strategic Purposes

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Competitive Advantage Factors and Strategies
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Performance-Based Information Systems

• Productivity Achieved Output/ Required Input
• Quality Satisfy customers needs
• Return on Investment and the Value of Information
  Systems
• Earnings Growth Increase in Profit
• Market Share Company Sales/Total Market
• Customer Awareness and Satisfaction Measure by
  surveys
• Total Cost of Ownership Includes setting up,
  training, maintaining, and so on

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Three Stages in the Business Use of IS
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Roles, Functions, and Careers in the Information
Systems Department

• Operations
• Make sure IS works efficiently
• Start, stop, maintain hardware
• System network operators, data-entry operators
• Systems Development
• Identify needs
• Produce programs
• System analyst, computer programmer
• Support
• Administration and assistance
• Train users help maintain the system
• Web and database administrators help-desk staff

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The Three Primary Responsibilities of Information
Systems
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Typical IS Titles and Functions

• The Chief Information Officer
• LAN Administrators
• Internet Careers

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Why Learn About Information Systems?

• Advance in your career
• Solve problems
• Realize opportunities
• Meet your career goals