- 1. Chapter 1 Foundations ofInformation Systems in Business
James A. O'Brien, and George MarakasManagement Information Systems,
9 thed.Boston, MA: McGraw-Hill, Inc., 2009. ISBN: 13 9780073376769
McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc.
All rights reserved.
2.
- Understand the concept of a system and how it relates to
information systems
- Explain why knowledge of information systems is important for
business professionals
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- Identify five areas of information systems knowledge
needed
- Give examples to illustrate how business applications of
information systems can support a firms
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- Managerial decision making
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- Strategies for competitive advantage
Learning Objectives 1- 3. Learning Objectives(contd)
- Provide examples of information systems from your experiences
with business organizations in the real world
- Identify challenges that a business manager might face in
managing the successful, ethical development and use of information
technology
- Provide examples of the components of real world information
systems
- Become familiar with the myriad of career opportunities in
information systems
4. Case 1: Sew What? Inc.
- Sew What? provides custom theatrical draperies and fabrics for
stages, concerts, fashion shows, and special events worldwide.
- After launching the company web site, they acquired clients
from all over the world and their revenue has been growing more
than 45% per year.
- Sew What? runs most of its business with Intuits Quick-Books
Enterprise Solutions & Dell PowerEdge servers.
- Recently, the National Federation of Independent Businesses
(NFIB) and Dell Inc. presented Sew What? Small Business Excellence
Award in recognition of its innovative use of technology to improve
its customers experience.
1- 5. Case Study Questions
- How do information technologies contribute to the business
success of Sew What? Inc.? Give several examples from the case
regarding the business value of information technology that
demonstrate this conclusion.
- If you were a management consultant to Sew What? Inc., what
would you advise Megan Duckett to do at this point to be even more
successful in her business? What role would information technology
play in your proposals? Provide several specific
recommendations.
- How could the use of information technology help a small
business you know be more successful? Provide several examples to
support your answer.
1- 6. Foundation Concepts
- Why study information systems and information technology?
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- Vital component of successful businesses
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- Helps businesses expand and compete
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- Improves efficiency and effectiveness ofbusiness processes
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- Facilitates managerial decision making and workgroup
collaboration
1- 7. What is an Information System?
- An organized combination of
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- Stores, retrieves, transforms, and disseminates information in
an organization
1- 8. Information Technologies
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- All the components and resources necessary to deliver
information and functions to the organization
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- Hardware, software, networking, data management
- Our focus will be on computer-based information systems
(CBIS)
1- 9. What Should Business Professionals Know? 1- 10.
Fundamental Roles of IS in Business 1- 11. Trends in Information
Systems 1- 12. What is E-Business?
- Using Internet technologies to empower
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- Collaboration within a company
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- Collaboration with customers, suppliers, and other business
stakeholders
- In essence, an online exchange of value
1- 13. How E-Business is Being Used 1- 14. E-Business Use
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- Internal business processes
- Enterprise collaboration systems
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- Support communications, coordination and coordination among
teams and work groups
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- Buying, selling, marketing, and servicing of products and
services over networks
1- 15. Types of Information Systems
- Operations Support Systems
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- Efficiently process business transactions
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- Control industrial processes
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- Support communication and collaboration
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- Update corporate databases
- Management Support Systems
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- Provide information as reports and displays
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- Give direct computer support to managers during
decision-making
1- 16. Purposes of Information Systems 1- 17. Operations Support
Systems
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- Efficiently process business transactions
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- Control industrial processes
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- Support communications and collaboration
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- Update corporate databases
1- 18. Types of Operations Support Systems
- Transaction Processing Systems
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- Record and process business transactions
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- Examples: sales processing, inventory systems, accounting
systems
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- Monitor and control physical processes
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- Example: using sensors to monitor chemical processes in a
petroleum refinery
- Enterprise Collaboration Systems
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- Enhance team and workgroup communication
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- Examples: email, video conferencing
1- 19. Two Ways to Process Transactions
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- Accumulate transactions over time and process periodically
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- Example: a bank processes all checks received in a batch at
night
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- Process transactions immediately
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- Example: a bank processes an ATM withdrawal immediately
1- 20. Management Support Systems
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- Provide information and support for effective decision making
by managers
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- Management information systems
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- Executive information systems
1- 21. Types of Management Support Systems
- Management Information Systems (MIS)
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- Example: daily sales analysis reports
- Decision Support Systems (DSS)
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- Interactive and ad hoc support
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- Example: a what-if analysis to determine where to spend
advertising dollars
- Executive Information Systems (EIS)
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- Critical information for executives and managers
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- Example: easy access to actions of competitors
1- 22. Other Information Systems
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- Example: credit application advisor
- Knowledge Management Systems
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- Support creation, organization, and dissemination of business
knowledge throughout company
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- Example: intranet access to best business practices
1- 23. Other Information Systems
- Strategic Information Systems
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- Help get a strategic advantage over customer
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- Examples: shipment tracking, e-commerce Web systems
- Functional Business Systems
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- Focus on operational and managerial applications of basic
business functions
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- Examples: accounting, finance, or marketing
1- 24. IT Challenges and Opportunities 1- 25. Measuring IT
Success
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- Minimize cost, time, and use of information resources
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- Support business strategies
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- Enable business processes
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- Enhance organizational structure and culture
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- Increase customer and business value
1- 26. Developing IS Solutions 1- 27. Challenges and Ethics of
IT
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- Customer relationship management
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- Human resources management
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- Business intelligence systems
1- 28. Ethical Responsibilities
- What uses of IT might be considered improper or harmful to
other individuals or society?
- What is the proper business use of the Internet or a companys
IT resources?
- How can you protect yourself from computer crime?
1- 29. IT Careers
- Economic downturns have affected all job sectors, including
IT
- Rising labor costs are pushing jobs to India,the Middle East,
and Asia-Pacific countries
- However, IT employment opportunities are strong, with new jobs
emerging daily
- Shortages of IT personnel are frequent
- The long-term job outlook is positive and exciting
1- 30. IT Careers 1- 31. IT Careers
- Job increases will be driven by
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- Rapid growth in computer system design and related
services
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- The need to backfill positions
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- Information sharing and client/server environments
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- The need for those with problem-solving skills
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- Falling hardware and software prices, which will fuel expanded
computerization of operations
1- 32. The IS Function
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- A major functional area of business
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- An important contributor to operational efficiency, employee
productivity, morale, customer service and satisfaction
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- A major source of information and support for decision
making
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- A vital ingredient in developing competitive products and
services in the global marketplace
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- A dynamic and challenging career opportunity
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- A key component of todays networked business
1- 33. System Concepts: A Foundation
- System concepts help us understand
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- Technology : hardware, software, data management,
telecommunications networks
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- Applications : to support inter-connected information
systems
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- Development : developing ways to use information technology
includes designing the basic components of information systems
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- Management : emphasizes the quality, strategic business value,
and security of an organizations information systems
1- 34. Real World Case: JetBlue and the Veterans
Administration
- Good IT processes are as important as hardware and software
when it comes to creating business value through the use of
technology.
- Even seemingly smaller and less critical processes can have
ramifications of a large magnitude in the interconnected world in
which we live.
- The information system, which was developed by JetBlue in 24
hours and implemented in the middle of crisis in 2007, has now been
implemented as a full-time system in the company.
- At Veterans Administration an unscheduled system failure took
down key applications in 17 (VA) medical facilities for a day.
1- 35. Case Study Questions
- Eric Brinker of JetBlue noted that the database developed
during the crisis had not been needed before since the company had
never experienced a meltdown. What are the risks and benefits
associated with this approach to IT planning? Provide some examples
of each.
- With hindsight, we now know that the decision made by Eric
Raffin of the VA not to fail over to the Denver site was the
correct one. However, it involved failing to follow established
backup procedures. With the information he had at the time, what
other alternatives could he have considered? Develop at least two
of them.
- A small, undocumented change resulted in the collapse of the VA
system, largely because of the high interrelationship between its
applications. What is the positive side of this high degree of
interconnection, and how does this benefit patients? Provide
examples from the case to justify your answer.
1- 36. What is a System?
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- A set of interrelated components
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- With a clearly defined boundary
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- To achieve a common set of objectives
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- By accepting inputs and producing outputs
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- In an organized transformation process
1- 37. Basic Functions of a System
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- Capturing and assembling elements that enter the system to be
processed
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- Transformation process that converts input into output
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- Transferring transformed elements to their ultimate
destination
1- 38. Cybernetic System
- All systems haveinput ,processing , andoutput
- Acybernetic system , a self-monitoring, self-regulating system,
adds feedback and control:
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- Feedbackis data about the performance of a system
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- Controlinvolves monitoring and evaluating feedback to determine
whether a system is moving toward the achievement of its goal
1- 39. A Business as a System 1- 40. Other System
Characteristics
- If a system is one of the components of a larger system, it is
asubsystem
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- The larger system is anenvironment
- Several systems may share the same environment
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- Some may be connected via a shared boundary, orinterface
1- 41. Components of an IS 1- 42. Information System
Resources
1- 43. Information System Resources
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- Product descriptions, customer records, employee files,
inventory databases
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- Communications media, communications processors, network access
and control software
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- Management reports and business documents using text and
graphics displays, audio responses, and paper forms
1- 44. Data Versus Information
- Dataare raw facts about physical phenomena or business
transactions
- Informationis data that has been converted into meaningful and
useful context for end users
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- Sales data is names, quantities, and dollar amounts
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- Sales information is amount of sales by product type, sales
territory, or salesperson
1- 45. IS Activities
- Processingof data into information
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- Calculations, comparisons, sorting, and so on
- Outputof information products
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- Messages, reports, forms, graphic images
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- Data elements and databases
- Controlof system performance
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- Monitoring and evaluating feedback
1- 46. Recognizing Information Systems
- Business professionals should be able to look at an information
system and identify
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- The people, hardware, software, data, and network resources
they use
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- The type of information products they produce
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- The way they perform input, processing, output, storage, and
control activities
1- 47. Case 3: Heidelberg, Honeywell, and Eaton
- Today, it is not be enough for a company to offer services but
it will have to provide smart services.
- To provide smart services, companies must use information
technology to build smart products.
- Smart products can detect that a part is approaching failure
and alert users, thus giving the company opportunity to provide
maintenance services and enjoy the resulting benefits.
- Heidelberg developed the technology to monitor its equipment
remotely, using built-in sensors, networking microprocessors, and
other information technologies.
- With such smart services, Heidelberg now offers total support
of its products.
- Eaton corporation has developed a product called Home Heartbeat
whichmonitors the status of various home systems and alerts the
homeowner when something is wrong.
1- 48. Case Study Questions
- Why should manufacturing companies build smart products and
provide smart services? What business benefits can they gain?
Provide several examples beyond those discussed in this case.
- What information technologies are used by the companies in this
case to build smart products and provide smart services? What other
IT components might be used? Give examples of the capabilities they
would provide.
- What are some limitations of a smart products and smart
services strategy? Give several examples of challenges that a
business might encounter, and explain how it might overcome
them.
1- 49. Case 4: Lufthansa
- In 2001, Lufthansa launched the Lufthansa Mobile Initiative,
which aimed to provide all pilots with notebook computers.
- It helps 3,500 highly mobile airline pilots plugged into the
corporate infrastructure, that informs themabout schedules, weather
events, and other facts that affect their jobs throughout the
world.
- The Lufthansa Mobile Initiative is yielding significant
productivity and efficiency improvements, while keeping costs
manageable.
- Pilots use their notebook computers for computer-based training
whether they are learning about new aircraft or things like
specific hydraulic systems.
1- 50. Case Questions
- Are many of Lufthansas challenges identified in the case
similar to those being experienced by other businesses in todays
global economy? Explain and provide some examples.
- What other tangible and intangible benefits, beyond those
identified by Lufthansa, might a mobile workforce enjoy as a result
of deploying mobile technologies? Explain.
- Lufthansa was clearly taking a big risk with their decision to
deploy notebook computers to their pilots.What steps did they take
to manage that risk, and what others might be needed in todays
business environment? Provide some examples.
1-