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An Introduction & Concepts of

Information Systems
CHAPTER 1 & 2

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 Information System

• A set of interrelated components that collect,

manipulate & disseminate data & information &
provide feedback to meet an objective.

• Examples: ATMs; airline reservation systems;

course reservation systems

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 Role of Information in
Business
• Information is an increment in knowledge: it
contributes to the general framework of
concepts and facts that we know
• Data are only the raw facts, the material for
obtaining information. Information systems
use data stored in computer databases to
provide needed information

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 Data vs. Information

• Data vs. Information

– Data (unprocessed - bahan mentah yang belum
diproses)
• A “given,” or fact; a number, a statement, or a picture
• Represents something in the real world
• The raw materials in the production of information
– Information (processed - bahan mentah yang telah
diproses)
• Data that have meaning within a context
• Data in relationships
• Data after manipulation

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The Process of Transforming Data into
Information

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Characteristics of Valuable Information

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The Components of an Information
System

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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 world’s largest computer network,

actually consisting of thousands of
interconnected networks

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 Business Information Systems

• Electronic Commerce
• Transaction Processing Systems and 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-business
• Business-to-consumer
• Consumer-to-consumer

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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
company’s vital business operations for an entire
multisite, global organization.

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A Payroll Transaction Processing
System

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Functional Management Information Systems Draw
Data from the Organization’s TPS

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Decision Support Systems (DSS)

An organized collection of people, procedures,

software, databases, and devices used to
support problem-specific decision making.

– 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
• Expert systems

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The Major Elements of Artificial
Intelligence

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A Head-Mounted Display

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Data Glove

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 Management Reporting Systems
The objective of management reporting systems is to provide routine information to
managers. Managers receive performance reports within their specific areas of
responsibility. Generally, these reports provide internal information rather than
spanning corporate boundaries. They report on the past and the present, rather than
projecting the future.

Characteristics of Management Reporting Systems

• MRSs are oriented toward reporting on the past and the present, rather than
projecting the future.

• MRSs generally have limited analytical capabilities. They are not built around
elaborate models, but rather rely on extraction of data from databases according
to given criteria, and on summarization of the data.

• MRSs largely report on internal company operations rather than spanning the
company=s boundaries by reporting external information.

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 Executive Information
Systems
• EIS are becoming an important tool of
top-level control in many
organizations. They help an executive
spot a problem, an opportunity, or a
trend (development).

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Executive Information Systems
• Executive information systems support top
managers with conveniently displayed
summarized information, customized for them.
They make a variety of internal and external
information readily available in a highly
summarized and convenient form. EIS are used
to:
1. Monitor the performance of the organization
2. Assess the business environment
3. Develop strategic directions for the company's
future
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Objectives and Functions of
Office Information Systems
• Office information systems (OIS)
support office tasks with information
technology. The primary goal of these
systems is to increase the
productivity of office work
• The primary purpose of OIS is to
facilitate communication between
members of an organization and
between the organization and its
environment 29
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 Functions of Office
Information Systems
• Document management
• Message handling
• Teleconferencing
• Electronic meeting systems
• Support of group work and groupware.

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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

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The Value Chain of a Manufacturing
Company

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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
• Quality
• Return on Investment and the Value of
Information Systems
– Earnings Growth
– Market Share
– Customer Awareness and Satisfaction
– Total Cost of Ownership

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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
• Systems Development
• Support

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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

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