8/3/2019 IT in Business -- Chapter 1 20111
1/28
Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
Foundations ofInformation Systems in
Business
Chapter 1
8/3/2019 IT in Business -- Chapter 1 20111
2/28
1-2
Foundation Concepts
Improves efficiency andeffectiveness of
business processes
Facilitates managerialdecision making& workgroupcollaboration
Strengthenscompetitive position inrapidly changing
marketplaces
Vital component ofsuccessful businesses
Why studyinformation systems andinformation technology?
8/3/2019 IT in Business -- Chapter 1 20111
3/28
1-3
What is an Information System?
Any organizedcombination of
Policies andprocedures
Data resources
Communicationnetworks
Hardware and
software
Stores, retrieves, transforms,and disseminates information
in an organization
People
8/3/2019 IT in Business -- Chapter 1 20111
4/28
1-4
What Should Business Professionals Know?
8/3/2019 IT in Business -- Chapter 1 20111
5/28
1-5
Fundamental Roles of IS in Business
8/3/2019 IT in Business -- Chapter 1 20111
6/28
1-6
Trends in Information Systems
8/3/2019 IT in Business -- Chapter 1 20111
7/28
1-7
What is E-Business?
Using Internet technologies to empower
Business processes
Electronic commerceCollaboration within a company
Collaboration with customers, suppliers,
other business stakeholders
In essence, an online exchange of value
8/3/2019 IT in Business -- Chapter 1 20111
8/28
1-8
How E-Business is Being Used
8/3/2019 IT in Business -- Chapter 1 20111
9/28
1-9
E-Business Use
Internalbusiness
processes
Reengineering
Supportcommunication,
coordination,coordination
among teamsand work
groups
Enterprisecollaboration
Buying,selling,
marketing,and servicingof products
and servicesover networks
Electroniccommerce
8/3/2019 IT in Business -- Chapter 1 20111
10/28
1-10
Types of Information Systems
OperationsTransaction processing
Process control
Enterprise collaboration
Updating of corporate databases
ManagementDecision support systems
Executive information systems
8/3/2019 IT in Business -- Chapter 1 20111
11/28
1-11
Types of Operations Support Systems
Transaction Processing SystemsRecord and process business transactions
Sales, inventory, and accounting
Process Control Systems
Monitor and control physical processes
Using sensors to monitor refinery processes
Enterprise Collaboration Systems
Enhance team/workgroup communication
Email, video conferencing
8/3/2019 IT in Business -- Chapter 1 20111
12/28
1-12
Two Ways to Process Transactions
Batch Processing
Accumulatetransactions over time
and then processperiodically
Ex: Banks process allchecks in a batch at night
Online Processing
Process alltransactionsimmediately
Ex: A bank processesATM withdrawalsimmediately
8/3/2019 IT in Business -- Chapter 1 20111
13/28
1-13
Management Support Systems
What do they do?
Provide information and support foreffective decision making by managers
Management
informationsystems
Decision
supportsystems
Executive
informationsystems
8/3/2019 IT in Business -- Chapter 1 20111
14/28
1-14
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 determine where to
spend advertising dollars
Executive Information Systems (EIS) Critical information for executives and managers Example: easy access to actions of competitors
8/3/2019 IT in Business -- Chapter 1 20111
15/28
1-15
Measuring IT Success
Efficiency Minimizes cost, time,
use of informationresources
Effectiveness Supports business strategies
Enables business processes Enhances organizational structure and culture Increases customer and business value
8/3/2019 IT in Business -- Chapter 1 20111
16/28
1-16
Developing IS Solutions
8/3/2019 IT in Business -- Chapter 1 20111
17/28
1-17
Ethical Responsibilities
What uses of IT might be considered improperor harmful to other individuals or society?
What is the proper business use of the Internetor a companys IT resources?
How can you protect yourself from computer
crime?
8/3/2019 IT in Business -- Chapter 1 20111
18/28
1-18
IT Careers
Economic downturns affecting all jobsectors, including IT
Rising labor costs are pushing jobs toIndia, the Middle East, Asia-Pacific
Negative
IT employment opportunities strong,with new jobs emerging daily
Frequent shortages of IT personnelLong-term job outlook is positive
and exciting
Positive
8/3/2019 IT in Business -- Chapter 1 20111
19/28
1-19
IT Careers
The need to backfill positions
Information sharing andclient/server environments
Rapid growth in computer systemdesign and related services
Need for those with problem-solving skills
Falling hardware and software prices, whichfuel expanded computerization of operations
Job increases will be driven by
8/3/2019 IT in Business -- Chapter 1 20111
20/28
1-20
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 producing outputs
In an organized transformation process
8/3/2019 IT in Business -- Chapter 1 20111
21/28
1-21
Basic Functions of a System
Input
Capturingandassembling
elementsthat enter
the systemto be
processed
Processing
Transforma-tion processconvertsinput into
output
Output
Transferringtransformedelements to
theirultimate
destination
8/3/2019 IT in Business -- Chapter 1 20111
22/28
1-22
Cybernetic System
All systems have input , processing , output
A cybernetic system , a self-monitoring, self-regulating system, adds
Feedback system performance data Control monitoring and evaluating feedback
to determine whether a system is movingtoward the achievement of its goal
8/3/2019 IT in Business -- Chapter 1 20111
23/28
1-23
Other System Characteristics
A system that is a component of a largersystem is a subsystem
The larger system is an environment
Several systems may share one environment Connected via a shared boundary (interface)
Types of systems Open and Adaptive
8/3/2019 IT in Business -- Chapter 1 20111
24/28
1-24
Components of an IS
8/3/2019 IT in Business -- Chapter 1 20111
25/28
1-25
Information System Resources
InformationSystem Resources
People Information
Hardware Networks
Software Data
8/3/2019 IT in Business -- Chapter 1 20111
26/28
1-26
Data Versus Information
Data are raw facts, typically about physicalphenomena or business transactions
Specifically, objective measurements of theattributes of entities
Information is data that was converted intomeaningful and useful context for end users
Aggregated, manipulated, and organized Analyzed and evaluated Placed in proper context for a human user
8/3/2019 IT in Business -- Chapter 1 20111
27/28
1-27
Basic IS Activities
Output
Input
Processing
Storage
Control
f
8/3/2019 IT in Business -- Chapter 1 20111
28/28
1-28
Recognizing Information Systems
Business professionals should be able to lookat an information system and 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