Week 1 2 - Foundation of Information System in Business

7/31/2019 Week 1 2 - Foundation of Information System in Business

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Foundations of

Information Systems inBusiness

Chapter

1 ( week 1 & 2 )

McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.


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1. Understand the concept of a systemand how it relates to informationsystems

2. Explain why knowledge ofinformation systems is important forbusiness professionals

Identify five areas of informationsystems knowledge needed

Learning Objectives

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3. Give examples to illustrate how businessapplications of information systems cansupport a firms

Business processes

Managerial decision making

Strategies for competitive advantage

4. Provide examples of information systems

from your experiences with businessorganizations in the real world

Learning Objectives

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Learning Objectives

5. Identify challenges that a businessmanager might face in managing thesuccessful, ethical development and

use of information technology6. Provide examples of the components

of real world information systems

7. Become familiar with the myriad ofcareer opportunities in informationsystems

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Case 1: Sew What? Inc.

Sew What? provides custom theatrical draperies andfabrics for stages, concerts, fashion shows, andspecial events worldwide.

After launching the company web site, they acquiredclients 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 PowerEdgeservers.

Recently, the National Federation of IndependentBusinesses (NFIB) and Dell Inc. presented SewWhat? Small Business Excellence Award inrecognition of its innovative use of technology toimprove its customers experience.

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Case Study Questions

1. How do information technologiescontribute to the business successof Sew What? Inc.? Give several

examples from the case regardingthe business value of informationtechnology that demonstrate this

conclusion.

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2. If you were a managementconsultant to Sew What? Inc., whatwould you advise Megan Duckett to

do at this point to be even moresuccessful in her business? Whatrole would information technology

play in your proposals? Provideseveral specific recommendations.

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3. How could the use of informationtechnology help a small businessyou know be more successful?

Provide several examples to supportyour answer.

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Foundation Concepts

Why study information systems andinformation technology?

Vital component of successful

businesses

Helps businesses expand and compete

Improves efficiency and effectiveness of

business processes Facilitates managerial decision making

and workgroup collaboration

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What is an Information System?

An organized combination of

People

Hardware and software

Communication networks Data resources

Policies and procedures

This system

Stores, retrieves, transforms, and disseminatesinformation in an organization

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Information Technologies

Information Systems

All the components and resourcesnecessary to deliver information and

functions to the organization

Could be paper based

Information Technologies

Hardware, software, networking, datamanagement

Our focus will be on computer-based

information systems (CBIS) 1-11


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What Should Business Professionals Know?

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Fundamental Roles of IS in Business

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Trends in Information Systems

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What is E-Business?

Using Internet technologies toempower

Business processes

Electronic commerce

Collaboration within a company

Collaboration with customers, suppliers,

and other business stakeholders

In essence, an online exchange ofvalue

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How E-Business is Being Used

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E-Business Use

Reengineering

Internal business processes

Enterprise collaboration systems

Support communications, coordinationand coordination among teams andwork groups

Electronic commerce Buying, selling, marketing, and servicing

of products and services over networks

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Types of Information Systems

Operations Support Systems

Efficiently process business transactions

Control industrial processes

Support communication and collaboration Update corporate databases

Management Support Systems

Provide information as reports and displays

Give direct computer support to managersduring decision-making

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Purposes of Information Systems

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Operations Support Systems

What do they do?

Efficiently process businesstransactions

Control industrial processes

Support communications andcollaboration

Update corporate databases

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Types of Operations Support Systems

Transaction Processing Systems

Record and process business transactions

Examples: sales processing, inventory

systems, accounting systems Process Control Systems

Monitor and control physical processes

Example: using sensors to monitor chemical

processes in a petroleum refinery

Enterprise Collaboration Systems

Enhance team and workgroup communication

Examples: email, video conferencing 1-21


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Two Ways to Process Transactions

Batch Processing

Accumulate transactions over time andprocess periodically

Example: a bank processes all checksreceived in a batch at night

Online Processing

Process transactions immediately

Example: a bank processes an ATMwithdrawal immediately

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Management Support Systems

What do they do?

Provide information and support foreffective decision making by managers

Management information systems

Decision support systems

Executive information systems

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Types of Management Support Systems

Management Information Systems (MIS) Reports and displays

Example: daily sales analysis reports

Decision Support Systems (DSS)

Interactive and ad hoc support

Example: a what-if analysis to determinewhere to spend advertising dollars

Executive Information Systems (EIS) Critical information for executives and

managers

Example: easy access to actions of

competitors 1-24


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Other Information Systems

Expert Systems

Provide expert advice

Example: credit application advisor

Knowledge Management Systems

Support creation, organization, anddissemination of business knowledgethroughout company

Example: intranet access to bestbusiness practices

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Other Information Systems

Strategic Information Systems

Help get a strategic advantage overcustomer

Examples: shipment tracking, e-commerce Web systems

Functional Business Systems

Focus on operational and managerialapplications of basic business functions

Examples: accounting, finance, or

marketing 1-26


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IT Challenges and Opportunities

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Measuring IT Success

Efficiency

Minimize cost, time, and use ofinformation resources

Effectiveness

Support business strategies

Enable business processes

Enhance organizational structure andculture

Increase customer and business value

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Developing IS Solutions

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Challenges and Ethics of IT

Application of IT

Customer relationship management

Human resources management

Business intelligence systems

Potential Harm

Infringements on privacy

Inaccurate information

Collusion

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Challenges and Ethics of IT

Potential Risks

Consumer boycotts

Work stoppages

Government intervention

Possible Responses

Codes of ethics

Incentives

Certification

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Ethical Responsibilities

What uses of IT might be consideredimproper or harmful to otherindividuals or society?

What is the proper business use ofthe Internetor a companys IT resources?

How can you protect yourself fromcomputer crime?

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IT Careers

Economic downturns have affected all jobsectors, including IT

Rising labor costs are pushing jobs to

India,the Middle East, and Asia-Pacific countries

However, IT employment opportunities arestrong, with new jobs emerging daily

Shortages of IT personnel are frequent

The long-term job outlook is positive andexciting

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IT Careers

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IT Careers

Job increases will be driven by

Rapid growth in computer system design andrelated services

The need to backfill positions Information sharing and client/server

environments

The need for those with problem-solving skills

Falling hardware and software prices, whichwill fuel expanded computerization ofoperations

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The IS Function

The IS function is A major functional area of business

An important contributor to operationalefficiency, employee productivity, morale,

customer service and satisfaction A major source of information and support for

decision making

A vital ingredient in developing competitive

products and services in the global marketplace

A dynamic and challenging career opportunity

A key component of todays networked business

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System Concepts: A Foundation

System concepts help us understand Technology: hardware, software, data

management, telecommunications networks

Applications: to support inter-connected

information systems

Development: developing ways to useinformation technology includes designing thebasic components of information systems

Management: emphasizes the quality, strategicbusiness value, and security of an organizations

information systems

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Real World Case: JetBlue and the VeteransAdministration

Good IT processes are as important as hardwareand software when it comes to creating businessvalue through the use of technology.

Even seemingly smaller and less critical processescan have ramifications of a large magnitude in theinterconnected world in which we live.

The information system, which was developed byJetBlue in 24 hours and implemented in the middleof crisis in 2007, has now been implemented as a

full-time system in the company.

At Veterans Administration an unscheduled systemfailure took down key applications in 17 (VA)medical facilities for a day

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1. Eric Brinker of JetBlue noted that thedatabase developed during the crisishad not been needed before since

the company had never experienceda meltdown. What are the risks andbenefits associated with this

approach to IT planning? Providesome examples of each.

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2. With hindsight, we now know thatthe decision made by Eric Raffin ofthe VA not to fail over to the Denver

site was the correct one. However, itinvolved failing to follow establishedbackup procedures. With theinformation he had at the time, what

other alternatives could he haveconsidered? Develop at least two ofthem.

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3. A small, undocumented changeresulted in the collapse of the VAsystem, largely because of the high

interrelationship between itsapplications. What is the positiveside of this high degree of

interconnection, and how does thisbenefit patients? Provide examplesfrom the case to justify your answer.

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What is a System?

A system is

A set of interrelated components

With a clearly defined boundary Working together

To achieve a common set of objectives

By accepting inputs and producingoutputs

In an organized transformation process

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Basic Functions of a System

Input

Capturing and assembling elements thatenter the system to be processed

Processing

Transformation process that convertsinput into output

Output Transferring transformed elements to

their ultimate destination

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Cybernetic System

All systems have input, processing, andoutput

A cybernetic system, a self-monitoring,

self-regulating system, adds feedback andcontrol:

Feedback is data about the performance of asystem

Control involves monitoring and evaluatingfeedback to determine whether a system ismoving toward the achievement of its goal

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A Cybernetic System

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A Business as a System

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Other System Characteristics

If a system is one of the componentsof a larger system, it is a subsystem

The larger system is an environment

Several systems may share the sameenvironment

Some may be connected via a sharedboundary, or interface

Types of systems

Open

Adaptive1-47


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Components of an IS

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Information System Resources

People Resources

Specialists

End users

Hardware Resources

Machines

Media

Software Resources

Programs

Procedures 1-49


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Information System Resources

Data Resources Product descriptions, customer records,

employee files, inventory databases

Network Resources

Communications media, communicationsprocessors, network access and controlsoftware

Information Resources Management reports and business documentsusing text and graphics displays, audioresponses, and paper forms

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Data Versus Information

Data are raw facts about physicalphenomena or business transactions

Information is data that has been

converted into meaningful and usefulcontext for end users

Examples:

Sales data is names, quantities, and dollaramounts

Sales information is amount of sales byproduct type, sales territory, or salesperson

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IS Activities

Input of data resources Data entry activities

Processing of data into information

Calculations, comparisons, sorting, and so on

Output of information products

Messages, reports, forms, graphic images

Storage of data resources

Data elements and databases Control of system performance

Monitoring and evaluating feedback

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Recognizing Information Systems

Business professionals should beable to look at an information systemand identify

The people, hardware, software, data,and network resources they use

The type of information products they

produce

The way they perform input, processing,output, storage, and control activities

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Case 3: Heidelberg, Honeywell, and Eaton

Today, it is not be enough for a company tooffer services but it will have to providesmart services.

To provide smart services, companies must

use information technology to build smartproducts.

Smart products can detect that a part is

approaching failure and alert users, thusgiving the company opportunity to providemaintenance services and enjoy theresulting benefits.

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Case 3: Heidelberg, Honeywell, and Eaton

Heidelberg developed the technology to monitorits equipment remotely, using built-in sensors,networking microprocessors, and otherinformation technologies.

With such smart services, Heidelberg now offerstotal support of its products.

Eaton corporation has developed a product calledHome Heartbeat which monitors the status of

various home systems and alerts the homeownerwhen something is wrong.

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1. Why should manufacturing companies build smartproducts and provide smart services? What businessbenefits can they gain? Provide several examplesbeyond those discussed in this case.

2. What information technologies are used by the

companies in this case to build smart products andprovide smart services? What other IT componentsmight be used? Give examples of the capabilities theywould provide.

3. What are some limitations of a smart products andsmart services strategy? Give several examples ofchallenges that a business might encounter, andexplain how it might overcome them.

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Case 4: Lufthansa

In 2001, Lufthansa launched the Lufthansa Mobile

Initiative, which aimed to provide all pilots withnotebook computers.

It helps 3,500 highly mobile airline pilots plugged intothe corporate infrastructure, that informs them about

schedules, weather events, and other facts that affecttheir jobs throughout the world.

The Lufthansa Mobile Initiative is yielding significantproductivity and efficiency improvements, whilekeeping costs manageable.

Pilots use their notebook computers for computer-based training whether they are learning about newaircraft or things like specific hydraulic systems.

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Case Questions

1. Are many of Lufthansas challenges identified in

the case similar to those being experienced byother businesses in todays global economy?

Explain and provide some examples.

2. What other tangible and intangible benefits,

beyond those identified by Lufthansa, might amobile workforce enjoy as a result of deployingmobile technologies? Explain.

3. Lufthansa was clearly taking a big risk with theirdecision to deploy notebook computers to theirpilots. What steps did they take to manage thatrisk, and what others might be needed in todays

business environment? Provide some examples.

Documents

Week 1 2 - Foundation of Information System in Business