Chapter 1

Introduction to
Information Systems
( IS)

1.1
 OBJECTIVES

• Understand Data and Information

• Identify the Characteristics of Valuable Information

• Value the role of information systems in business

• Understand the need to study MIS in Business

1.2
 Data and Information
• What is Data?

• What is Information?

• Are Data and Information the Same?

1.3
 Data

• A raw fact about people, place,

object, event…etc

• Data do not convey meaning to the

user.

1.4
 Information

• Processed ( Organized, compiled,

Formatted) data that gives meaning
to Users and help them in some sort
of decision making.

1.5
 Activities in an Information System

INPUT PROCESS OUTPUT

FEEDBACK

1.6
 Information
• Data + Process = Information.
• Data is an Input( like Raw Material).
• Information is an output(Like
Finished Product).

1.7
 Data Vs Information
Example:
• Data/Input: List of Letter grades and
Course Credit hrs. of a student in a
semester.
• Process: Arithmetic
Operations( calculation)
• Output/Information: Grade Report

1.8
 Group Discussion

• Provide examples of Data and

Information on the following
Business Functions
– Accounting and Finance
– Human Resource
– Sales and Marketing

1.9
 Qualitative characteristics of Information
• Accuracy
• Relevancy
• Timeliness
• Verifiability
• Completeness
• Accessibility
• Reliability and others

1.10
 Qualitative characteristics of Information…Cont
• Accuracy : Information has to be free
from error (Precise).
• Non Accurate information misleads
decisions.

1.11
 Qualitative characteristics of Information…cont
• Relevancy: An information should add
value for the intended user.
• An information which is relevant for
someone may be of no use for some
one else.

1.12
 Qualitative characteristics of Information…cont

• Timeliness : The information should be

delivered for the user on the time
he/she is in need of it.
• Information which is too late is useless
as no information at all.

1.13
 Qualitative characteristics of Information …cont

• Verifiability : provide a means to

confirm the accuracy of information
(Auditable).

1.14
 Qualitative characteristics of Information …cont

• Completeness: addressing all the

required details (comprehensive) to the
business need.

1.15
 Qualitative characteristics of Information …cont
• Accessibility: requires less effort to
retrieve the information.

1.16
 Qualitative characteristics of Information …cont

• Reliability: the degree of

dependency( trust) on the information

1.17
 Information Systems (ISs)
• An information system is an
organized combination of people,
hardware, software, communications
networks, data resources and
business Procedures that collects,
transforms, and disseminates
information in an organization.

1.18
 The Role Of Information Systems In Business
• Information systems and technologies
have become a vital component of
successful businesses and organizations.
– Operational Excellence,
– Create New Products/Services,
– Improve Decision Making,
– Supplier and customer intimacy,
– Competitive advantage,
– Survival.

1.19
 Operational Efficiency

• Walmart, the largest retailer on earth, exemplifies the

power of information systems coupled with brilliant
business practices and supportive management to
achieve world-class operational efficiency. In fiscal
year 2012, Walmart achieved $460 billion in sales—
nearly one-tenth of retail sales in the United States—
in large part because of its Retail Link system, which
digitally links its suppliers to every one of Walmart’s
stores. As soon as a customer purchases an item, the
supplier monitoring the item knows to ship a
replacement to the shelf.

1.20
 New Products, Services, and Business Models

• Information systems and technologies are

a major enabling tool for firms to create
new products and services, as well as
entirely new business models.
• A business model describes how a
company produces, delivers, and sells a
product or service to create wealth.

1.21
 Customer and Supplier Intimacy
• When a business really knows its customers, and
serves them well, the customers generally
respond by returning and purchasing more.
• This raises revenues and profits. Likewise with
suppliers: the more a business engages its
suppliers, the better the suppliers can provide
vital inputs. This lowers costs.
• How to really know your customers, or suppliers,
is a central problem for businesses with millions
of offline and online customers.

1.22
 Customer Intimacy
• The Mandarin Oriental in Manhattan and other high-end hotels
exemplify the use of information systems and technologies to
achieve customer intimacy.
• These hotels use computers to keep track of guests’ preferences,
such as their preferred room temperature, check-in time,
frequently dialed telephone numbers, and tele- vision programs,
and store these data in a large data repository.
• Individual rooms in the hotels are networked to a central network
server computer so that they can be remotely monitored or
controlled. When a customer arrives at one of these hotels, the
system automatically changes the room conditions, such as
dimming the lights, setting the room temperature, or selecting
appropriate music, based on the customer’s digital profile.
• The hotels also analyze their customer data to identify their best
customers and to develop individualized marketing campaigns
based on customers’ preferences.
1.23
 Supplier Intimacy
• JCPenney exemplifies the benefits of information systems-
enabled supplier intimacy.
• Every time a dress shirt is bought at a JCPenney store in
the United States, the record of the sale appears
immediately on computers in Hong Kong at the TAL
Apparel Ltd. supplier, a contract manufacturer that
produces one in eight dress shirts sold in the United
States.
• TAL runs the numbers through a computer model it
developed and then decides how many replacement shirts
to make, and in what styles, colors, and sizes.
• TAL then sends the shirts to each JCPenney store,
bypassing completely the retailer’s warehouses. In other
words, JCPenney’s shirt inventory is near zero, as is the
cost of storing it.
1.24
 MIS for Business

1.25
 Why to study MIS in Business?

the continual change in technology

 management use of the technology
 the impact on business success

New businesses and industries appear,

old ones decline, and successful firms
are those that learn how to use the new
technologies.

1.26
 Three interrelated changes in the technology area:
I. The emerging mobile digital platform

II. The growing business use of "big data”

III. The growth in “cloud computing” where

more and more business software runs
over the Internet

1.27
 The Table below summarizes
the major new themes in
business uses of information
systems.
(Refer you text Book page 37)

1.28
1.29
1.30
1.31
 MIS in Business…contd.

• The role of the MIS in an organization

can be compared to the role of heart in
the body. The information is the blood
and MIS is the heart.
• In the body the heart plays the role
of supplying pure blood to all the
elements of the body including the
brain.

1.32
 MIS in Business…contd.

•The MIS plays exactly the same

role in the organization.
•The system ensures that an
appropriate data is collected from
the various sources, processed,
and sent further to all the needy
destinations.

1.33
 MIS in Business…contd .

MIS is expected to fulfill the

information needs of an
individual, a group of
individuals, the management
functions.

1.34
 MIS in Business…contd .

1.35