Foundations of Information Systems in Business

Learning Objectives
1. Explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need. 2. Give examples to illustrate how the business applications of information systems can support a firm s business processes, managerial decision making, and strategies for competitive advantage.

Learning Objectives
3. Provide examples of several major types of information systems from your experiences with business organizations in the real world. 4. Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business.

Illustrate that in an information system. output. and control activities that transform data resources into information products.Learning Objectives 5. processing. software. . data and networks as resources to perform input. Provide examples of the components of real world information systems. storage. people use hardware.

and workgroup collaboration.Why Study Information Systems? ‡ Information technology can help all kinds of businesses improve the efficiency and effectiveness of their business processes. managerial decision making. . thus strengthening their competitive positions in a rapidly changing marketplace.

Why Study Information Systems ‡ Internet-based systems have become a necessary ingredient for business success in today s dynamic global environment. ‡ Information technologies are playing an expanding role in business. .

What is a System? A system can most simply be defined as a group of interrelated or interacting elements forming a unified whole. Three basic interaction components or functions of a system: ‡ Input this involves capturing and assembling elements that are required to be processed. ‡ Output this involves transferring the information generated by the system to their ultimate destination ‡ Processing is the transformation process that converts the input into output. .

and data resources that stores. Any organized combination of people. . hardware. software. retrieves. process. communications networks. store . transforms. and disseminates information in an organization.What is an Information System? An Information System is a set of inter-related components that collect (or retrieve). and distribute information to support decision making and control in an organization.

Information Systems vs. Information Technology ‡ Information Systems (IS) all components and resources necessary to deliver information and information processing functions to the organization ‡ Information Technology (IT) various hardware components necessary for the system to operate .

A Business System .

software productivity suites. and the input. and storage devices that support them ‡ Computer Software Resources including operating system software. and large mainframe systems. output. Web browsers. and software for business applications like customer relationship management and supply chain management . midsize servers.Types of Information Resources ‡ Computer Hardware Resources including microcomputers.

. microwave. cellular. processors. and satellite wireless technologies ± examples include communications processors such as modems and internetwork processors. and software needed to provide wire-based and wireless access and support for the Internet and private Internetbased networks ± examples include twisted-pair wire.Types of Information Resources ‡ Telecommunications Network Resources ± including the telecommunications media. and communications control software such as network operating systems and Internet browser packages. coaxial and fiber-optic cables.

and maintenance of the databases of an organization ‡ People Resources ± ± end users or Clients Accountants. Clerks. customers IS Specialists people who develop and operate the Information Systems System analyst. access.Types of Information Resources ‡ Data Resource Management Resources including database management system software for the development. System operators . System Developers.

IS Resources & Activities .

Conceptual Framework of IS Knowledge .

Roles of IS in Business .

Information Systems Activities ‡ ‡ ‡ ‡ ‡ Input of Data Resources Processing of Data into Information Output of Information Products Storage of Data Resources Control of System Performance .

Trends in Information Systems .

Types of Information required by an organization ± ± ± ± Strategic Information Tactical Information Operational Information Statutory Information .

. ‡ Statutory Information: ± Information and reports required by law to be sent to government authorities ± Clearly specified ± Require straight forward processing of data.‡ Strategic Information: ± ± ± ± Information needed for long term planning Directing the course the business should take Less structured Volume of important information in strategic planning is small and difficult to obtain. ‡ Tactical Information: ± ± ± ± Needed for taking short range decisions to run the business effectively Requires specifically designed processing of data Mostly obtained form the day-to-day collection of routine data Much more in volume ‡ Operational Information: ± Needed for day-to-day operations of a business organization ± Easily obtained by simple clerical processing of data ± volume is much more than that of tactical information.

Types of Information Systems .

Organizational Pyramid vs Information Pyramid Strategic decision Top Top Environment al Info Tactical decision Middle Middle Operational decision Operational Operational Internal Info .

Operation Support Systems Definition: ‡ Information systems that process data generated by and used in business operations ‡ Goal is to efficiently process business transactions. control industrial processes. support enterprise communications and collaboration. and update corporate databases .

update operational databases. and produce business documents. workgroup. . ‡ Process Control Systems (PCS) monitor and control industrial processes. and enterprise communications an collaboration.Examples of Operations Support Systems ‡ Transaction Processing Systems (TPS) process data resulting from business transactions. ‡ Enterprise Collaboration Systems support team.

Management Support Systems Definition: ‡ Information systems that focus on providing information and support for effective decision making by managers .

‡ Decision Support Systems (DSS) provide interactive ad hoc support for the decision making processes of managers and other business professionals. and other sources tailored to the information needs of executives. . ‡ Executive Information Systems (EIS) provide critical information from MIS. DSS.Management Support Systems ‡ Management Information Systems (MIS) provide information in the form of pre-specified reports and displays to support business decision making.

and dissemination of business knowledge to employees and managers . organization.Operational & Managerial IS ‡ Expert Systems provide expert advice for operational chores or managerial decisions ‡ Knowledge Management Systems support the creation.

IS Classifications by Scope ‡ Functional Business Systems support basic business functions ‡ Strategic Information Systems support processes that provide a firm with strategic products. services. and capabilities for competitive advantage ‡ Cross-functional Information Systems integrated combinations of information systems .

Management Challenges & Opportunities .

Measures of Success ‡ Efficiency ± Minimize costs ± Minimize time ± Minimize the use of information resources ‡ Effectiveness ± ± ± ± Support an organization s business strategies Enable its business processes Enhance its organizational structure and culture Increase the customer business value of the enterprise .