A1 - 1 ICT For Today's Business

IS1060 : Introduction to Information Systems
Part A : Concepts & Roles of Information Systems
A1
ICT for Today’s Businesses
Copyright © 2022 Por Hau Joo IS1060_V16_A1: ICT for Today’s Businesses 1/35
Prerequisite Readings & Lesson Objectives
 Prerequisite readings:
 Subject Guide | Chapter 4: Information and data
 Subject Guide | Chapter 5: The ‘systems’ of information systems
 At the end of this lesson, you will understand/learn:
 ICT in general, differences between data and information, information quality,

information overload and information society
 Fundamental concepts of systems and information systems, and information

systems literacy
 Key components, functional areas and work processes of a business organization,

and the business goals of information systems
1 ICT, Data & Information
Key Issues:
1) What is ICT?
2) What is the difference between data and information? Why
information is valuable? What are the essential quality of
information?
3) What do you understand by the term ‘information overload’?

What can be done to avoid/reduce it?
4) What is an information society? What are the characteristics of

such a society?
Information & Communication Technology (ICT)
 It includes computer hardware and related devices, communication networks,

operating systems, computer software and applications
 These are technologies for storing, processing, transmitting, accessing and

sharing data/information among businesses and people, anytime, anywhere
What is Data?
 Basic raw facts about specific things, stated in some forms, such as texts,
numbers, images or other descriptions or representations
 Data are frequently collected, stored and maintained by someone in an

organization, normally recorded on durable mediums
 On their own, the data carry only limited meanings
Example: Transaction data collected at a casher counter for the Tiger Beer
(Can 330ml) bought by a customer in a supermarket
Date & Time : 2022-08-20 10:29:51

Item Code : B0028
Data Items
Item Name : Tiger Beer (Can 330ml) Raw Data,

Quantity : 12 i.e. Facts
Unit Price : S$2.60
Sale Amount : $31.20
What is Information?
 When lots of data about something are processed or interpreted by human or

automated means, valuable information may be derived from the data
 Information is therefore derived by processing, manipulating, analyzing and/or
summarizing the collected data, so as to reveal useful information and the
underlying meanings of the data
Example: Information about monthly sales of Tiger Beer (Can 330ml)

Information Items
Year/Month : 2022/08
Item Code : B0028 Information
Item Name : Tiger Beer (Can 330ml) that has been
Total Quantity : 860 derived
Total Sales Amount : S$2,236.00
 The information is purposely produced to meet the needs of a target user(s) -

hence, it is meaningful and valuable only to him/her, and not to others
Data for Information, Knowledge & Wisdom
Business
Reduce Cost Identify New
Opportunities
Wisdom Enhances
Increase Effectiveness
Response to
Gain Competitive
Enable
Change
Advantage
Knowledge Reduces
Risk
Decision
Provide
Making Drive
Information
Generate
Supports 1. Information is valuable, it provides knowledge

and enables wisdom in decision making
Data 2. It helps decision makers achieve organization goals
3. Information may become data that can be further processed
and presented in tables/charts to show patterns/trends
Essential Quality of Information - 1
Quality Meaning
Accurate Error free - sometimes inaccurate information is generated due to incorrect data
(‘Garbage In, Garbage Out’).
Complete Contain all required information. For example, an investment report that does not
provide cost information is incomplete.
Economical Relatively cheap to produce - producers must balance the value of information with
the cost of producing it.
Flexible Can be used for a variety of purposes. For example, information on total quantity of a
product available in inventory can be used by a sales representative to close a deal, or
by a production manager to determine whether more should be produced, or by an
accountant to derive the current worth for that product in the inventory.
Reliable Dependable - this depends on reliability of the source of data and the data collection
method. A rumor from an unknown source that stock prices might go up may not be
reliable.
Relevant Appropriate to the context in which the information is requested. Information that
paper prices might drop is irrelevant to a computer chip manufacturer.
Essential Quality of Information - 2
Quality Meaning
Simple Easy to understand, not overly complex. Complex or sophisticated information is hard
to use, and too much details can cause information overload.
Current Most recent, not outdated. Having yesterday’s price of a stock is not useful for buying
the stock today.
Timely Delivered to the recipient when it is needed. Receiving the information that a product
has run out of stock after a large order has been confirmed is not timely at all.
Verifiable Can be traced and checked to confirm it’s correctness (e.g. by checking the original
and/or other sources for the same information).
Accessible Accessible by people who need the information, anytime, anywhere.
Secure Protected securely and accessible only by unauthorized personnel.
Which quality attribute(s) is important? This depends on circumstances

and what the target recipient(s) or organization is looking for.
Information Overload
 Having too much, or too complex, information for a decision maker to make a
decision, or to be informed about something, is not good
 ‘Information overload’ is said to have occurred

when provision/possession of information is in
excess of the cognitive/emotional ability of a
receiver to process → more than he/she is
capable of absorbing
 Commonly used in reference to various forms

of computer-mediated communications, such
as overwhelming volume of electronic mails or
complicated reports in production, sales and
financial matters
Can ICT be used to help reduce/avoid ‘information overload’?
Information Society
A society in which:
 Everyone uses ICT and mobile devices for information, and everyone depends
on these devices for conducting social, leisure and work activities
 An advanced ICT infrastructure is present and the economic and cultural life of
the society are critically dependent on ICT and its infrastructure
 Creation, digitization, distribution and manipulation of information is the

norm and a significant economic and cultural activity in the society
 Information becomes the main product or essential to other products

 Success of every organization depends on its ability to exploit information and
the effective deployment and use of ICT
 The knowledge economy is its economic counterpart, whereby wealth is

created through the exploitation of information and knowledge
Characteristics of an Information Society
 Wide spread use of ICT and mobile devices, and reliance on information
 Highly educated professionals, workers and people
 Plentiful and affordable desktops, palmtops, mobile computing and communication
devices for connectivity to information resources
 Businesses (private organizations), government (public agencies) and community
(people) rely heavily on information flow and knowledge, and success is dependent
on the ability to exploit information
 Wide spread use of communication networks and computer servers

 Supported by an advanced ICT infrastructure → fast, reliable, cheap and non-stop
networks and the Internet that support everyone in the society
 Business, educational, scientific, political and social activities are widely supported
and conducted via the networks
 Wide spread creation, digitization, distribution and sharing of knowledge-based
products through the networks
 Plentiful and easily accessible information in digital forms
 Knowledge workers play prominent roles in creation of these products
Self-Learning
Learning Videos:
1) Information and Communication Technology for Development

https://youtu.be/7zMNjraEMvY (3:00)
2) What is the Difference Between Data, Information & Knowledge?

https://youtu.be/mUgEgkV16Bw (2:12)
Further Reading:
1) ICT: The Difference Between Data and Information

https://www.tutor2u.net/business/reference/the-difference-between-data-
and-information
2) Characteristics of Good Quality Information (ACCURATE)

https://www.linkedin.com/pulse/20141028075709-241876614-
characteristics-of-good-quality-information-accurate
2 Systems & Information Systems
Key Issues:
1) What is a system? What is an ‘open’ or ‘closed’ system?
2) What is an information system? Why information systems are

normally ‘open’ and ‘social’ systems?
3) What is ‘information systems literacy’?
System Concepts
 A system consists of a set of inter-related components that interact and work together to
perform some tasks, so as to accomplish some specific objectives
Operating Environment
System’s Boundary
System Components System
Process
Input Output
Interface Decision
Interface
Process Process
Agent Agent
 It resides in an operating environment and bounded by a clearly defined boundary that

separates the system from its agents (users, devices or other systems) in the environment
 It normally takes input(s) from agent(s) in the environment, then processes the input(s)
and generates some output(s) for the same or other agent(s) in the environment
Examples of Systems
Discuss the environments, agents, inputs and outputs of the following systems:
Types of Systems
 ‘Open’ System
 A system that interacts with an external agent(s) or with another system(s) in the
environment, who is outside its boundary
 Take input(s) from agent(s) in the environment, process the input(s), and then
generate an output(s) to the same or other agent(s) in the environment
Examples: Transportation, education, health care, banking, freights, production,
school registration, curriculum planning, class scheduling
 ‘Closed’ System
 An isolated or stand-alone system that does not interact with any agent in the
environment or with any other system
 Takes no input from the agent(s) in the environment
and generates no output to the environment
Examples: 1. Self-contained bio-chemical test labs
2. Ecosphere (self-contained ecosystem)
(visit http://www.eco-sphere.com/)
Information System as a System
 A system designed and built using ICT, also known as application system
Operating Environment
Information
User System User
Data Data/Information
System’s
Feedback
Components System’s Boundary
 Accept data as inputs from a user(s) or another system(s), process the data
and then generate some useful output(s) for the same or other user(s)
 It is an ‘open’ and ‘social’ system that resides in an environment to serve the

needs of some target users → the users are integral part of the system
I-P-O of an Information System
 I (Input)
 Data in digital forms (texts, numbers, signals, images, audios or videos) may be fed
into the system manually or automatically by agents or external systems
 P (Processing)
 Data is processed inside the system – may involve storing, analyzing, computing,
manipulating, sorting and/or summarizing
 O (Output)
 An output is delivered to the agents or another system, in paper or digital form
 Output may be used to indicate incorrect processing, to provide cue for managerial
interventions, or to supply estimates for future inputs
 Output may also be used as feedback to control other components or to improve
the system (e.g. to enhance quality, efficiency, effectiveness, reliability, accuracy,
relevance or performance)
Information Systems Literacy
 The study of information systems is not just about technical knowledge and
skills, it also includes:
 Study and understanding of organizational, economic, social and behavioral
aspects of information systems; and
 Problem solving, systems analysis, design and development skills using ICT
 Therefore, information systems literacy focuses not just on ICT but includes:
 The study of broader organization, social, management and technology dimensions
of information systems; and
 Understanding the power and capabilities of ICT and providing ICT-based solutions
to address problems and to meet challenges in business environment
 In contrast, computer literacy focuses primarily on the study of technical

knowledge and skills related to ICT, such as computers and devices, operating
systems and software, communication networks, system installation and
maintenance, data backup and recovery, etc.
Mandatory Skills for Information Systems Literacy
1 Organizational & 2 Problem Solving, Analysis, 3 ICT Skills

Behavioral Skills Design & Development Skills
• Organizational Strategy • IS Project Life Cycle & • Different Types of

• Structure, People & Development Approaches Information Systems
Culture • Functional Requirements • Computer Hardware
• Decision Makings • Systems Analysis & Design • Computer Software
• Functional Areas & • Logical & Physical Database • Communication
Business Processes Design Networks
• Business Goals for • System Construction & Testing • Data Management
Information Systems
• System Implementation & • Information Security
• Change & Impacts
Maintenance & Data Protection
caused by Information
Systems
Understanding the complex relationship between ICT & business organizations

Addressing business problems & challenges using ICT
Managing change & impacts brought about by information systems
Self-Learning
Learning Videos:
1) In a World of Systems
https://youtu.be/A_BtS008J0k (9:22)
2) System’s Functioning
https://youtu.be/rniTluP579I (5:40)
Further Reading:
1) Systems Thinking
https://corporatefinanceinstitute.com/resources/knowledge/strategy/systems
-thinking/
3 Business Goals of Information Systems
Key Issues:
1) What is a business organization?

2) Why information systems are needed by business organizations?
3) What are the business goals for using information systems?
Business Organization - Purpose & Stakeholders
 A firm or enterprise in private or public sector, concerned with provision of

products/services desired by someone
 Established with a formal structure, consists of people, making use of human

and other resources to accomplish a set of business goals
 Stakeholders include owners (entrepreneurs, share/stock holders), customers,
creditors (banks and finance companies), suppliers and employees
$ (Invested) $ (Purchases)
Business
Owners Customers
Organization
$ (Dividends) Products/Services
Time & Effort
$ (Salaries)
Creditors Employees Suppliers
Key Components of a Business Organization
 People: CEO, COO, CFO, CIO, directors, managers,

advisors, administrative staffs, consultants,
professionals, operation and general workers
 Organization Structure: management and operation

structure and chart, regional and corporate groups,
factories and offices, and territories
 Rules and Regulations: rules and standard operating

procedures, statutory requirements
 Culture: styles, customs and behaviors
 Politics: differences of opinions, power to persuade

and getting things done
Functional Areas
An organization is organized into a number of functional areas, i.e. divisions or

departments, each focusing on, and responsible for, a specific area of business
Manufacturing & Production Sales & Marketing
Human Resources
Finance & Accounting Customer Services
Organization/Management Hierarchy
A hierarchy of management
Upper levels and responsibilities,
Level Senior allowing clear division of
Management labour and facilitating
Management different levels of
Levels authority.
Middle
Level Middle Management It allows command
(Managers & Knowledge Workers) and control to be
established for
managing and
Lower operating a
Level Operational Management
business.
(Production & Service Workers)
Functional Sales & Manufacturing Finance & Human

Areas Marketing & Production Accounting Resources
Routines & Business Processes
 Routines → standard procedures for doing works

 Developed by people in the organization (e.g. managers, supervisors)
 Define the steps, flow, responsibilities and rules that help increase productivity and
efficiency in the organization
 Improved and enhanced over time, and eventually become standard operating
procedures, rules and practices of the organization
 Business Processes → a collection of related and applicable routines,

organized into a set of work activities to produce/provide products and/or
services for internal users, external customers and suppliers
 Designed and created after careful consideration of business rules
 Involve work flow, use of forms and documents, and carried out by trained and
qualified personnel
 Take one or more inputs and creates outputs of value to someone
 Over time, some business processes become best practices in the industry
Examples of Business Processes
Functional Area Examples

Manufacturing &  Product Assembly Process
Production  Quality Assurance Process
 Bills of Materials Generation Process
Sales & Marketing  New Customer Identification Process
 Product Promotion Process
 Product Sales Process
Finance & Accounting  Pay Creditor Process
 Financial Reporting Process
 Cash Account Management Process
Human Resources  New Employee Hiring Process
 Employee Performance Evaluation Process
 Employee Training Process
Every business process describes clearly what, who, where, when and
how to carry out the work and responsibility in an organization.
Why Information Systems are Needed?
 All firms, small or large, local or global, use information systems to achieve
strategic business objectives
 Old business processes are redesigned to take advantage of ICT
 New business processes supported by ICT are introduced, changing the
flow of information and transforming the ways a business is conducted
 Every year, firms are investing millions of dollars into building and expanding
ICT infrastructures, and engaging business/management consulting services
related to deployment of ICT
 Emergence of the Internet into a full-blown global communication network

not only reduces business costs but also creates new opportunities, new
business models and new approaches for operating a business
 Today, modern enterprises rely heavily on the use of ICT to compete and
survive in a competitive and information-driven society
How Information Systems Can Help?
Functional Area Work Activities Supported by Information Systems

Manufacturing &  Plan and monitor production, control inventory, process bill-
Production of-materials, facilitate communication with suppliers
Sales & Marketing  Maintain customer and product information, process orders,
support sales, conduct promotions, provide customer
services, facilitate communication with customers
Finance & Accounting  Maintain accounting data, perform accounting and financial
analysis, generate financial reports, facilitate budget planning
Human Resources  Maintain employee data, manage work activities, conduct

staff development planning, facilitate communication with
employees
Information systems are introduced throughout an organizations to automate,

improve and optimize business processes and operations of every functional area.
Business Goals of Information Systems - 1
Organizations use information systems to achieve one or more of the following

business objectives:
1. Operational Excellence
 Automate mundane tasks in core business processes  increase operation
efficiency and productivity, reduce manpower and costs
 Minimize human interventions and avoid human errors  speed up and

improve operation reliability, and enhance quality of products and services
2. New Products, New Services & New Business Models

 Create new products and services through innovative use of ICT  new
ideas for selling products and services, new ways of generating revenues
 Introduce new business models/approaches through innovative use of ICT

 new ways of doing business, new opportunities, paradigm shift
3. Customer & Supplier Intimacy

 Maintain current and complete information about customers and suppliers →
improve communications and relationships
 Enable marketing personnel to know each and every customer → improve sales
and marketing activities, promote new products and services intelligently
 Provide high quality customer services and achieving effective supply chain
management → improve services, customer satisfaction, reduce wastage and costs
4. Improved Decision Making

 Speed up data processing and flow of information in business processes → provide
instant, simultaneous and shared access to critical data and information
 Enable managers or empower non-managerial staffs to gain access to information

at the right time and place → improve business management and decision making
5. Competitive Advantage
 Effective use of resources at minimum costs → offering products/services faster and
cheaper compared to competitors
 Product/Service differentiation → being unique/different from competitors
 Focusing on market niche → hold on to, or find, special segments of the markets
6. Survival
 Adapting to rapid changes in business operating environment → able to respond
quickly and timely
 Meeting customer expectations and competitions → able to meet new and

changing expectations and competitions at all times
 Sustaining current business and investing into future → not standing still but staying
relevant to the changing business environment
Self-Learning
Learning Video:
1) How IT & Business Process Fit Together
https://youtu.be/3iAp9me4P1c (3:30)
Further Reading:
1) Why Are Organisations Investing in IS?
https://sopinion8ed.wordpress.com/2013/02/03/why-are-organisations-
investing-in-is/

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IS1060 : Introduction to Information Systems

Part A : Concepts & Roles of Information Systems

 Subject Guide | Chapter 4: Information and data

 Subject Guide | Chapter 5: The ‘systems’ of information systems

 At the end of this lesson, you will understand/learn:

 ICT in general, differences between data and information, information quality,

 Fundamental concepts of systems and information systems, and information

 Key components, functional areas and work processes of a business organization,

3) What do you understand by the term ‘information overload’?

4) What is an information society? What are the characteristics of

 It includes computer hardware and related devices, communication networks,

 These are technologies for storing, processing, transmitting, accessing and

 Data are frequently collected, stored and maintained by someone in an

 On their own, the data carry only limited meanings

Date & Time : 2022-08-20 10:29:51

Item Name : Tiger Beer (Can 330ml) Raw Data,

 When lots of data about something are processed or interpreted by human or

Example: Information about monthly sales of Tiger Beer (Can 330ml)

 The information is purposely produced to meet the needs of a target user(s) -

Supports 1. Information is valuable, it provides knowledge

Accessible Accessible by people who need the information, anytime, anywhere.

Secure Protected securely and accessible only by unauthorized personnel.

Which quality attribute(s) is important? This depends on circumstances

 ‘Information overload’ is said to have occurred

 Commonly used in reference to various forms

Can ICT be used to help reduce/avoid ‘information overload’?

 Creation, digitization, distribution and manipulation of information is the

 Information becomes the main product or essential to other products

 The knowledge economy is its economic counterpart, whereby wealth is

 Wide spread use of communication networks and computer servers

1) Information and Communication Technology for Development

2) What is the Difference Between Data, Information & Knowledge?

1) ICT: The Difference Between Data and Information

2) Characteristics of Good Quality Information (ACCURATE)

1) What is a system? What is an ‘open’ or ‘closed’ system?

2) What is an information system? Why information systems are

3) What is ‘information systems literacy’?

 It resides in an operating environment and bounded by a clearly defined boundary that

 It is an ‘open’ and ‘social’ system that resides in an environment to serve the

 In contrast, computer literacy focuses primarily on the study of technical

1 Organizational & 2 Problem Solving, Analysis, 3 ICT Skills

• Organizational Strategy • IS Project Life Cycle & • Different Types of

Understanding the complex relationship between ICT & business organizations

1) What is a business organization?

3) What are the business goals for using information systems?

 A firm or enterprise in private or public sector, concerned with provision of

 Established with a formal structure, consists of people, making use of human

Creditors Employees Suppliers

 People: CEO, COO, CFO, CIO, directors, managers,

 Organization Structure: management and operation

 Rules and Regulations: rules and standard operating

 Culture: styles, customs and behaviors

 Politics: differences of opinions, power to persuade

An organization is organized into a number of functional areas, i.e. divisions or

Manufacturing & Production Sales & Marketing

Finance & Accounting Customer Services

Functional Sales & Manufacturing Finance & Human

 Routines → standard procedures for doing works

 Business Processes → a collection of related and applicable routines,

Functional Area Examples

 Emergence of the Internet into a full-blown global communication network

Functional Area Work Activities Supported by Information Systems

Human Resources  Maintain employee data, manage work activities, conduct