At the heart of every organization is its information system, and that is what

this course is all about. Google, Twitter, Microsoft, and Facebook are all
popular companies on the cutting edge of technology, and their innovations
and competitive battles make front page news. But even organizations that
don’t seem very high tech—from a family-owned restaurant to a fitness gym—
can hardly do without information systems or without people who know how to
build and manage them.

This opening chapter highlights information systems in action, the nature of

information itself, and the four main components of every information system.
You will see how the IS discipline is evolving and why a solid understanding of
this subject will give you a critical edge, regardless of your major or career
path.

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1. Role of IS in organizations
2. Three characteristics of valuable information
3. Four components of IS
4. MIS research areas
5. Examples
6. Ethical questions

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Information, whether or not Google makes it accessible, is an organization’s
most important asset. Creating, capturing, organizing, storing, retrieving,
analyzing, and acting on information are fundamental activities in every
organization. The skill with which you carry out those tasks will be the deciding
factor, not just for your company’s success, but for your own. Like the
information they manage, information systems cover a very broad scope and
contribute to many different activities in an organization. For example:

• Dancing with the Stars became a smash reality TV hit by engaging millions
of viewers in judging the contestants. Hopeful celebrity couples compete
each week with a novel dance routine, and audience members cast a vote
for their favorite by phoning, sending text messages, or logging into the
show’s website. An information system on the back end tallies the results,
which counts for half the couple’s score.

• Smart doorbell company Ring launched a service called “Neighbors” in

which people can share videos of anyone who comes to their front doors,
sometimes catching them in the act of stealing a package or breaking in.
The doorbells are motion sensitive, so they activate even if the bell isn’t
pressed. Working with dozens of local police departments, the creators of
Neighbors highlight how social information systems like this one will help
police solve crimes and make communities safer.

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• Walmart, with sales that reach into the hundreds of billions, pioneered the
globe’s most efficient information system to track shipments as they move
from supplier factories to warehouses to retail stores. Tags attached to
pallets transmit information wirelessly, so Walmart execs know exactly
where merchandise is in the supply chain.

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The term digital transformation describes how organizations develop new
business models by integrating digital technology into all aspects of their
operations, including relationships with customers, suppliers, and partners.
The transformation blurs the lines between the physical and digital worlds and
changes the way people interact with one another. The underlying information
systems play critical roles in six major areas:

1. Operations management
2. Customer interactions
3. Decision making
4. Collaboration on teams
5. Competitive advantage
6. Individual productivity

Long description:
At the center of the diagram is a circle labeled “The Six Major Roles of
Information Systems.” The roles shown around the circle are listed below:
• Supporting customer interactions
• Making decisions
• Collaborating on teams
• Gaining competitive advantage
• Improving individual productivity
• Managing operations

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Every successful organization must excel at operations management, which involves the design,
operation, and improvement of systems the organization needs to deliver its goods and services. Some
of these deal with several very basic functions that are part of every business. Information systems are
crucial for tracking employee payroll, taxes, benefits, and timesheets. Accounting information systems
are essential to track accounts receivable, to process transactions, to procure goods and services, and
to pay suppliers. Organizations also must manage their assets and inventories.

Information systems designed to handle the processes involved in these functions must also meet
compliance standards set by governments and other regulatory agencies, which may change from time
to time, and also vary by country or state. Reports must be filed, audits passed, and new regulations
followed.

Depending on their missions, organizations also need information systems to manage industry-specific
operations.
Achieving excellence in operations can provide enormous cost savings and competitive advantage, as
companies streamline processes without sacrificing quality.
Long description:
At the top left is an illustration of “Safety Metrics.” It shows two semicircular meters – one displays the
“Temperature” reading, while the other displays the “Humidity” reading.
The top right shows a line graph that illustrates “Production Volume by Hour.” The horizontal axis shows
the “Hour” from 7 to 24; the vertical axis shows “Production Volume” from 0 to 70, in increments of 10. A
line with many up and down movements shows the trend.
The bottom left shows a bar graph that illustrates “Production Volume by Category.” The horizontal axis
shows the “Hour” from 7 to 24; the vertical axis shows “Production Volume” from 0 to 70, in increments of
10. Four categories – “A” through “D” are represented by color-coded bars. At each hour, the production
volume of one of the 4 categories is represented by a color-coded bar.
The bottom right illustrates “Quality Metrics” using slices of a pie. There are four slices that represent
“High”, “Medium”, “Low”, and “Rejected.”Each slice shows a number.

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Interactions with customers, clients, students, patients, taxpayers, citizens,
and others that come to your organization desiring a product or service are
fundamental to success. Customer relationship management (CRM) systems,
discussed in Chapter 5, build and maintain relationships and support all the
processes that underlie them.

Brick-and-mortar retail stores need a sales system that identifies each product
in the shopper’s basket, tallies the total, feeds the data to the inventory
system, and accepts various kinds of payment. Web-based front offices and
online self-service applications transform an organization’s relationships with
its customers, freeing them from most routine types of direct contact. The
information system processes often mimic the brick-and-mortar versions, with
“shopping carts” and “checkouts” clearly labeled.

For example, Amazon.com includes recommendations based on previous

purchases, encouragements to “review this book” or “rate this item,” special
discounts and coupons, storage space for your wish lists and gift ideas, and
many other innovative features to map out your preferences and build a
stronger relationship. All of this data contributes to Amazon’s customer
relationship management excellence and the company’s understanding of
what each customer wants.

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Information systems support data-driven decision making, which draws on the
billions of pieces of data that can be aggregated to reveal important trends and
patterns. Business intelligence, which collectively refers to all the information
managers use to make decisions, can come from many sources beyond the
organization’s own information systems. Decision support systems, business
intelligence, and artificial intelligence are discussed in Chapter 7.

Long description:
The questions shown in boxes around her photo are:
Should we offer free wifi to customers?
Should we add more fish to the menu?
Can we save money by closing an hour earlier?
Where should we open another branch of our restaurant?

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Collaboration and teamwork have considerable support from innovative
information systems that allow people to work together at any time and from
any place. Geographically dispersed participants can hold online meetings,
sharing documents and applications, and interacting using microphones, video
cameras, and whiteboards. Social networking sites support online communities
of people who create profiles for themselves, form ties with others with whom
they share interests, and make new connections based on those ties. The
huge success of social networks has prompted many corporations to adopt
them.

Developing information systems to support collaborative human activities

takes ingenuity and attention to the ways in which people really work together.
The information systems that support virtual teamwork are explored in Chapter
8.

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Information systems potentially play their most valuable roles when they are
integrated closely with strategy and tied to the major initiatives that will help
achieve competitive advantage, a topic discussed in Chapter 2.

Competitive advantage, which is anything that gives a firm a lead over its
rivals, can be gained through the development and application of innovative
information systems. Information systems are a fundamental part of a
company’s strategic vision. Indeed, that vision must be shaped to some extent
by what information systems can achieve today and what is possible for the
future.

Strategy is equally important to nonprofit organizations and government

agencies, and their information systems break new ground by offering handy
services to the public, streamlining operations, and improving decision making.

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Tools to help people improve their own productivity abound, from the
smartphones that combine voice calls with web browsing, contact databases,
email, music, and games, to the many software applications that eliminate
tedious work. Word processing has transformed work in every organization,
and offers numerous tools and add-ons that can further improve individual
productivity.

To improve productivity at work, people can choose from a variety of computer

software and electronic devices. It is best to select carefully based on the
functions you need most, ease of use, and short learning curves.

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Data refers to individual facts or pieces of information, and information refers to data or facts that are assembled and analyzed to add meaning and
usefulness.

For example, a single high-temperature reading of an incoming patient at a 24-hour walk-in clinic, is one piece of data. But entered into the clinic’s
information system and combined with patient’s other symptoms and previous medical records, it becomes far more valuable as a diagnostic tool. Even
more value can be obtained from this one temperature reading by aggregating it with the data from other patients entering the clinic that week. The patterns
may warn of a flu outbreak or even a major epidemic. Staff at the Centers for Disease Control and Prevention draw on data like this to map the spread of
diseases and take swift action to protect the public.

Information can be further refined, analyzed, and combined to make it even more useful and valuable as actionable knowledge.

Long description:
The table has three columns – “Data”, “Information”, and “Knowledge.”
The details contained in the rows are as follows:
Row 1:
• Data: Patient’s temperature at walk-in clinic on Dec. 15 equals 103.98 degrees F.
• Information: Table showing flu diagnoses in region during month of December
• Knowledge: Worldwide map of flu outbreaks suggesting pandemic
Row 2:
• Data: 01010011 01001111 01010011
• Information: Binary code for SOS
• Knowledge: HELP!!!
Row 3:
• Data: Microsoft (MSFT) closing stock price
• Information: Graph of Microsoft highs and lows for one year
• Knowledge: Combined with analysis of other information, leads to broker’s recommendation to buy, hold, or sell stock
Row 4:
• Data: CWOT
• Information: Complete Waste of Time (text messaging abbreviation)
• Knowledge: May be interpreted as an insult
Row 5:
• Data: GPS coordinates
• Information: Map showing location with push pin
• Knowledge: Location of Taj Mahal in India
Row 6:
• Data: Invoice Number 259 Total Amount equals $139.23
• Information: Total Sales for Southern Region in First Quarter equals $2,156,232
• Knowledge: Fastest growing sales region; consider broader marketing campaign

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Three characteristics stand out, however, that contribute to making some
information very valuable:

• Timeliness matters a great deal in some settings, and real-time

information often costs more. For example, people pay monthly fees to
financial service companies to get up-to-the minute stock prices, rather
than delayed price reports shown on free stock tickers.

• Accuracy may seem like an obvious attribute for valuable information,

but there actually are degrees of accuracy. The more accurate you want
the information to be, the longer it may take to get it, making extreme
accuracy a trade-off to timeliness.

• Completeness also adds value. However, striving for complete

information may introduce delays that affect timeliness.

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An information system brings together four critical components to collect,
process, manage, analyze, and distribute information:

1. People
2. Technology
3. Processes
4. Data

We will now discuss each of these components.

Long description:
The four components are shown in quarters of a shaded circle. A circular arrow
shows the link from one to the next. The four components shown in clockwise
order are:
• People
• Technology
• Data
• Processes

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The design, development, launch, and maintenance of any information system
involves teams of people. The human element plays a crucial role in the
success or failure of most information systems.

Leaders may be first to propose a system that will accomplish an important

strategic objective for the company. Innovative ideas for such systems come
from every level, however, provided the organization’s culture openly
encourages people to think about information systems in novel ways. The
information technology team works closely with stakeholders to launch user-
friendly, people-oriented systems.

Many systems draw from a much wider pool of people, involving users as
contributors and developers, not just customers or clients. User-generated
content (UGC) makes up most of the information in systems such as eBay,
Craigslist, YouTube, Facebook, and Twitter. UGC is an important ingredient in
Web 2.0, the second generation of web development that facilitates far more
interactivity, end-user contributions, collaboration, and information sharing
compared with earlier models.

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Information technology (IT), includes hardware, software, and
telecommunications.

• The servers in Google’s windowless data centers are examples of

hardware, along with all the desktop computers, laptops, netbooks, tablets,
mobile phones, navigation devices, digital cameras, scanners, and
sensors.

• Software ranges from the code needed to boot up a computer to artificial

intelligence systems with their own learning capabilities. The Internet and
the World Wide Web unleashed an explosion of software creativity,
transforming businesses around the globe. Organizations can create
applications that their partners, suppliers, and customers can access
anywhere on the planet.

• The main role of telecommunications is to move electronic signals from

one place to another, properly route traffic, and add features to improve
transmission speeds, eliminate noise, increase security, or analyze traffic
patterns. Increasingly, people favor wireless transmission because of its
flexibility and reduced cost, and promising developments to increase speed
and capacity are well underway. Many developing countries that can’t
afford to build wired networks are transforming their communications and

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expanding internet access through wireless transmission.

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A business process is a set of activities designed to achieve a task, and organizations
implement information systems to support, streamline, and sometimes eliminate business
processes.
The steps in any process are affected by thousands of decisions people make, and these are
influenced by the way people look at process improvements. Some organizations try to design
systems that just reproduce what employees were doing, thereby reducing labor. However, a
closer look at the process should lead to far more radical changes.
Business process management (BPM) is the field that focuses on designing, optimizing, and
streamlining processes, taking into account the human element. Analysts look at processes
from many different angles to suggest innovative approaches that leverage the power of
information systems and propose tweaks at every step.
Efforts to manage business processes also take into account the overall organizational culture.
Business processes and policies must also be reviewed frequently because circumstances
change quickly.

Long description:
The steps, in sequential order, are given below.
• Student logs into registration system
• System retrieves student records and class records
• Is class full?
• If Yes, System does not allow student to choose class
• If No, Is student eligible to take class?”
• If No, System does not allow student to choose class
• If Yes, System allows student to choose class

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Data are the grist for every information system, and these raw facts can
present themselves in an enormous variety of shapes and forms. Regardless
of its initial form, incoming data is converted into a digital format, which allows
it to be integrated in information systems, read by computer programs, and
shared across systems.

Long description:
The figure shows a speedometer with a needle, a man on a snowy peak of a
mountain with a scale that shows the altitude beside him, a thermometer, a
report card, a stop watch, and a map of the world across which several
horizontal lines are shown with prices of stocks, and highs and lows in prices.

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The study of information systems—how people, technology, processes, and data work together—is a
lively discipline involving university faculty, private-sector analysts, and government agencies. The six
areas that attract much of the interest include:

• IT in organizations
• Security
• Artificial Intelligence
• Internet of Things
• IT and ethics
• IT and markets
MIS is a young discipline, and researchers strive to keep up with the rapid changes. The Internet of
Things, for example, offers tremendous opportunities, as do the analytical tools that enable organizations
to capitalize on the big data that those things generate. Another important trend involves the study of e-
marketplaces, the kind that are transforming entire industries and threatening traditional players.
Research on IT and group collaboration, especially when team members are dispersed around the
world, is far more important now because of virtual teams, globalization, and trends favoring
telecommuting. The “people” component of information systems is clearly growing in importance, and
this book stresses that element.
Long description:
The table shows two columns – “Topic” and “Sample research questions.” The research questions, by
topic are listed below:
• IT in organizations: How should managers introduce change when new systems are implemented?
How can information systems best support collaborative teamwork?
• Security: How can information systems and their data be protected against threats?
• Artificial Intelligence: In what ways can artificial intelligence be tapped to improve information
systems?
• Internet of Things: What applications can be developed to draw on the data collected by sensors?
How should the data be used?
• IT and Ethics: How can information systems enhance ethical behavior and decision making?
• IT and markets: How do e-markets affect business competition?

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Information systems underlie most of the business activities and processes
that thread their way through every functional business unit. Strategic
initiatives involving information systems can and should come from all parts of
the organization to streamline processes, reduce costs, increase revenue, or
launch that “killer app.”

Whether your chosen career is marketing, finance, management, human

resources, research, sales, law, medicine, manufacturing or entrepreneurship,
information systems will be fundamental to your success.

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If your career leads you to service in government, teaching, law enforcement,
charities, or other nonprofit areas, information systems will also be critical. The
most successful fund-raisers know how to draw on information systems to
reach potential donors and pitch persuasive messages that match their
interests. Relief workers who know how to create inexpensive podcasts and
videos can relay the plight of children from war or disasters in troubled parts of
the world.

Many people say they want to volunteer to help a worthy cause, but they often
don’t unless the process is quick and efficient. VolunteerMatch.org, with over
one million monthly visitors, is the largest volunteer network in the world. With
a passion for technology, the site’s creators developed a user-friendly online
system that makes it very easy to match people who want to help with
organizations that need assistance.

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The business unit responsible for planning, managing, and supporting
information systems is often named Information Technology. Heading the
department is the chief information officer (CIO). The CIO might report directly
to the CEO, or to another vice president—often the one responsible for finance
and administration. As a senior executive, the CIO’s job is not just to oversee
the department, but to help shape the organization’s strategic goals and
ensure the information systems support them.

Long description:
The chart shows “CEO” at the top. At the next lower level is “CIO” to whom the
“Chief Security Officer” and the “Chief Privacy Officer” at a lower level report.
At a second lower level below the “CIO” are “Systems Administration”, “End-
User Support and Help Desk”, and “Enterprise Systems.” At a slightly lower
level and directly reporting to the “CIO” are “Data Center Operations” and
“Telecommunications and Network Services.”

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Learning how information systems support organizations and their missions will be
critical to your success. Gaining the technical know-how to increase your own
productivity is just as important.
Do you spend too much time hunting for documents? Can you quickly find a phone
number when you need it? Are you managing your email and text messages
effectively? Do you miss deadlines? Do you rely on easily lost handwritten notes?
The tips in each chapter highlight ways to maximize your own personal productivity so
you can work smarter, not harder.
Long description:
The quiz has 10 questions, each with a progressive ranking scale of 1 to 7 – “1”
represents “Not at all true for me” while “7” represents “Very true for me.”
The questions are listed below.
1) I empty my email inbox every day.
2) I keep a to-do list, and always keep it up to date.
3) I use email filters to sort messages by how important they are.
4) I stay logged into my social network most of the day so I am alerted when updates
occur or messages appear.
5) I rarely print anything out.
6) I send and receive text messages very frequently, though most are unimportant.
7) I focus on the most important projects and can ignore distractions.
8) I have a clear vision of what I want to achieve and make priorities.
9) I keep my calendar online rather than on paper, and I keep it up to date.
10) My electronic files are very well organized.

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Information systems are so powerful, and the data they contain so vast and
personal, that everyone must appreciate the ethical issues involved in their
development and use. Privacy breaches present major risks, and breaches
occur very frequently. One especially large one involved the consumer
reporting agency Equifax, in which hackers stole sensitive personal and
financial information of almost 150 million people in the United States.

Reputations are also more vulnerable, given the power individuals possess to
spread damaging information at lightning speed. Few corporations are
equipped to respond to such blitzes—accurate or not—that spread virally
through channels such as YouTube. Every organization’s crisis management
team, responsible for identifying, assessing, and addressing threats from
unforeseen circumstances, must be on high alert for warning signs and be
prepared to take action.

The way modern information systems amplify any communication may put
your own reputation and livelihood at risk as well. Any email you send or photo
you upload can be forwarded or posted online for millions to view, and for
attorneys to collect as evidence. Text, photos and videos uploaded to your
social networking site can easily be distributed to a far wider audience beyond
your own network. It is also absurdly easy to make your own blunders, by
sending email to many more people than you intended.

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1. Organizations rely on information systems for operations management,
customer interactions, decision making, collaboration and teamwork,
strategic initiatives, and individual productivity.

2. Data, information, and knowledge are terms along a continuum that reflect
how raw facts can be combined, assembled, and analyzed to add meaning
and value. Characteristics of information that add to its value are
timeliness, accuracy, and completeness.

3. The four components of any information system are (1) people, (2)
technology, (3) processes, and (4) data.

4. Interest in subjects such as the Internet of Things, big data analytics, e-

marketplaces, and collaborative group work has increased considerably.

5. Information systems contribute to success in every functional department

and in all different types of organizations.

6. Although information systems hold extraordinary promise, they also

present risks and ethical concerns, especially because of amplification
effects.

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