CHAPTER 1

INFORMATION SYSTEMS CONCEPTS

1.2 FRAMEWORK
OF INFORMATION
SYSTEM
INTRODUCTION
Organizations offer products to
customers to make money. These
products can be goods or services. In
most organizations, huge volumes of
data accumulate: data of products,
data of customers, data of
employees, data of the delivery of
products, and data of other sources.
These data therefore play an
important role in contemporary
organizationsand must be stored,
managed, and processed, which is
where information systems come
into play.
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 Although information
systems need not be computerized,
Information Technology (IT) plays an
increasingly important role in
organizations due to the fast pace of
INTRODUCTION technological innovation.
Today most information systems beyond
the smallest are IT-based because modern
IT enables efficient operations as well as
effective management in organizations of
all sizes.

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INFORMATION
SYSTEMS

6
 INFORMATION SYSTEMS
➢set of interrelated elements or components that collect (input), manipulate
(process), store, and disseminate (output) data and information, and provide a
corrective reaction (feedback mechanism) to meet an objective

➢standard definition is that an information system manages and processes

information

➢An information system is a software system to capture, transmit, store, retrieve,

manipulate or display information, thereby supporting people organizations or
other software systems.
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EXAMPLE OF INFORMATION
SYSTEMS

8
UNIVERSITY
GRADING SYSTE

MAJ
OR
EXA
MS

UPLO
AD
IS INFORMATION TECHNOLOGY(IT)
AN INFORMATION SYSTEM?

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INFORMATION TECHNOLOGY

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 EXAMPLE
When the most famous banker in the Ching Dynasty, Mr. Hu Syue-Yan, established his first bank, Fu
Kang, in the mid-1800s, we can be absolutely sure that there were no computer systems in the bank! At that time
the services a retail bank provided were very similar to those offered today: a customer could deposit money in the
bank and earn interests, borrow money, or remit money orders. All these activities had to be recorded to reflect a
customer’s current balance in the bank. That is, an information system needed to be in place in order to keep track
of how much the customer deposited, how much the customer withdrew, how much the customer borrowed, and
how much the customer transferred into other accounts. How did Mr. Hu Syue-Yan’s employees do so? Relevant
information was collected, processed, stored and distributed using pen and paper. Thus, although a computerized
technology was unavailable at the time, the bank’s information system still achieved its goals—enabling the
business to serve its customers. Again, here is evidence that information technology is not information system
Even though IT is often at the core of modern information systems, information technology and information
system are two different concepts. But what is the difference? What are the components of an information system?

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INFORMATIO
N SYSTEM IS
AN OPEN
SYSTEM
INFORMATION SYSTEM IS A DISRUPTIVE TECHNOLOGY

Disruptive technology is an
innovation that significantly alters
the way that consumers, industries,
A disruptive technology is one or businesses operate
that displaces an established
technology and shakes up the
industry or a ground-breaking
product that creates a
completely new industry overturns a traditional business model,
which makes it much harder for
an established firm to embrace
A new technology that
completely changes the way
things are done
FINANCE

OPERAľIONS

HUMAN RESOURCE
INFORMATION SYSTEM AS
ACTIVITY
ľkis aíc ťkc ťkícc ťQpc or acťi:iťics wkick
aíc kappc⭲i⭲g i⭲ ťkc oíga⭲izaťio⭲

ľkis ca⭲ bc a⭲oťkcí appíoack o ⭲ kow

IS ca⭲ bc dcsig⭲ i⭲ ťcíms or
dirrcíc⭲ť ťQpcs or acťi:iťics
 VALUE OF INFORMATION SYSTEM

FINANCIAḺ NON-FINANCIAḺ

VALUE O Ï IS
 FINANCIAL VALUE OF IS
2

1.8

1. INCREASING 1.G

REVENUE 1.4

1.2

0.8

0.G

0.4

0.2
2. DECREASING 0

EXPENSES 1000 2000 3000 4000 5000 6000

 EASE O Ï MAKING
DECISIONS
EASE O Ï GEľľING
CUSľOMER SERVICE
MAKING ľHE
PROCESS ACCURAľE
AND ÏASľER
HELPING IN DAľA
COLLABORAľION
 INFORMATION SYSTEM SUCCESS

A Casc B Casc

MANY PEOPLE ARE USING THE SYSTEM CONTINUE USING THE SYSTEM
50% 50%
PEOPLE ARE SATISFIED IMPROVES THE OLD SYSTEM
75% 75%
A Casc B Casc
 WHY OTHER ORGANIZATIONS ARE NOT USING INFORMATION SYSTEM?

10000

9000

®000

7000

6000

5000

4000

«000

2000

1000

0
Iťcm 1 Iťcm 2 Iťcm « Iťcm 4 Iťcm 5 Iťcm 6 Iťcm 7
CHALLENGES IN
INFORMATION
SYSTEMS
POOR DESIGN O Ï
BUSINESS
COSľ CHALLENGES
PROCESS

NOľ ALLIGNED ľ O
BUSINESS
SľRAľEGY
ľHANK YOU