Fundamentals of Information Systems Fourth Edition

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Fundamentals of Information Systems, Fourth Edition. 2. Principles and Learning Objectives. The value of information is directly linked to how it helps decision makers achieve the organization's goalsDistinguish data from information and describe the characteristics used to evaluate the quality of

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Fundamentals of Information Systems Fourth Edition

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1. Fundamentals of Information Systems Fourth Edition Chapter 1 An Introduction to Information Systems in Organizations

2. Fundamentals of Information Systems, Fourth Edition 2 Principles and Learning Objectives The value of information is directly linked to how it helps decision makers achieve the organization’s goals Distinguish data from information and describe the characteristics used to evaluate the quality of data Data versus information “data” is just a fact or group of facts “information” is a fact or collection of facts useful to making a decision – note the wording difference from page 5

3. Fundamentals of Information Systems, Fourth Edition 3 Principles and Learning Objectives (continued) Knowing the potential impact of information systems and having the ability to put this knowledge to work can result in a successful personal career, organizations that reach their goals, and a society with a higher quality of life Identify the basic types of business information systems and discuss who uses them, how they are used, and what kinds of benefits they deliver

4. Fundamentals of Information Systems, Fourth Edition 4 Principles and Learning Objectives (continued) System users, business managers, and information systems professionals must work together to build a successful information system Identify the major steps of the systems development process and state the goal of each

5. Fundamentals of Information Systems, Fourth Edition 5 Principles and Learning Objectives (continued) The use of information systems to add value to the organization can also give an organization a competitive advantage Identify the value-added processes in the supply chain and describe the role of information systems within them Identify some of the strategies employed to lower costs or improve service Define the term competitive advantage and discuss how organizations are using information systems to gain such an advantage

6. Fundamentals of Information Systems, Fourth Edition 6 Principles and Learning Objectives (continued) Information systems personnel are the key to unlocking the potential of any new or modified system Define the types of roles, functions, and careers available in information systems

7. Fundamentals of Information Systems, Fourth Edition 7 Why Learn About Information Systems in Organizations? Information systems (ISs) can cut costs and increase profits Students in most fields need to know ISs Business major might be hired to design a system to improve productivity Biochemistry major might be hired to conduct drug research using computer techniques You cannot go through a day without interacting and possibly depending upon information systems

8. Fundamentals of Information Systems, Fourth Edition 8 Introduction Information system (IS) Set of interrelated components: collect, manipulate, store, and disseminate data and information Provides feedback to meet an objective Examples: ATMs, airline reservation systems, course reservation systems

9. Fundamentals of Information Systems, Fourth Edition 9 Information Concepts: Data, Information, and Knowledge Data: raw facts Alphanumeric, image, audio, and video Information: collection of facts organized in such a way that they have additional value beyond the value of the facts themselves by impacting a decision to be made The value of information is in its potential to change the decision making process and/or the decision itself

10. Fundamentals of Information Systems, Fourth Edition 10 Data, Information, and Knowledge (continued)

11. Fundamentals of Information Systems, Fourth Edition 11

12. Fundamentals of Information Systems, Fourth Edition 12

13. Fundamentals of Information Systems, Fourth Edition 13 The Characteristics of Valuable Information

14. Fundamentals of Information Systems, Fourth Edition 14 The Characteristics of Valuable Information (continued)

15. Fundamentals of Information Systems, Fourth Edition 15 The Value of Information Value of information is directly linked to how it helps decision makers achieve their organization’s goals For example, value of information might be measured in: Time required to make a decision Increased profits to the company

16. Fundamentals of Information Systems, Fourth Edition 16 What Is an Information System?

17. Fundamentals of Information Systems, Fourth Edition 17 Input, Processing, Output, Feedback Input: the activity of gathering and capturing raw data Processing: converting or transforming data into useful outputs Output: production of useful information, usually in the form of documents and reports Feedback: output that is used to make changes to input or processing activities Remember that “knowledge” is what allows people to build the system that processes data

18. Fundamentals of Information Systems, Fourth Edition 18 Manual and Computerized Information Systems An information system can be: Manual Example: developing patterns and trends on graph paper for stock analysis Computerized Example: using program trading to track the market and trade large blocks of stocks when discrepancies occur

19. Fundamentals of Information Systems, Fourth Edition 19 Computer-Based Information Systems Computer-based information system (CBIS): single set of hardware, software, databases, telecommunications, people, and procedures configured to collect, manipulate, store, and process data into information

20. Fundamentals of Information Systems, Fourth Edition 20 Computer-Based Information Systems (continued)

21. Fundamentals of Information Systems, Fourth Edition 21 Computer-Based Information Systems (continued) CBIS components Hardware: computer equipment used to perform input, processing, and output activities Software: computer programs that govern the operation of the computer Database: organized collection of facts and information (be able to distinguish the “general database” as opposed to a true computer-based database) Telecommunications: electronic transmission of signals for communications Networks: connect computers and equipment in a building, around the country, and around the world

22. Fundamentals of Information Systems, Fourth Edition 22 Computer-Based Information Systems (continued) CBIS components (continued) Internet: world’s largest computer network People: manage, run, program, and maintain the system Procedures: strategies, policies, methods, and rules for using a CBIS

23. Fundamentals of Information Systems, Fourth Edition 23 Business Information Systems Most common types of information systems used in business organizations Electronic and mobile commerce systems Transaction processing systems Management information systems Decision support systems Specialized business information systems

24. Fundamentals of Information Systems, Fourth Edition 24 Business Information Systems (continued)

25. Fundamentals of Information Systems, Fourth Edition 25 Electronic and Mobile Commerce E-commerce: any business transaction executed electronically between parties Companies (B2B) Companies and consumers (B2C) Consumers and other consumers (C2C) Companies and the public sector Consumers and the public sector

26. Fundamentals of Information Systems, Fourth Edition 26 Electronic and Mobile Commerce (continued)

27. Fundamentals of Information Systems, Fourth Edition 27 Enterprise Systems: Transaction Processing Systems and Enterprise Resource Planning Transaction: business-related exchange Payments to employees Sales to customers Payments to suppliers Transaction processing system (TPS): organized collection of people, procedures, software, databases, and devices used to record completed business transactions

28. Fundamentals of Information Systems, Fourth Edition 28 Transaction Processing Systems (continued)

29. Fundamentals of Information Systems, Fourth Edition 29 Enterprise Resource Planning Integrated programs capable of managing a company’s vital business operations for an entire multisite organization Coordinate planning, inventory control, production, and ordering

30. Fundamentals of Information Systems, Fourth Edition 30 Information and Decision Support Systems An effective TPS provides a number of benefits to a company A TPS can speed business activities and reduce clerical costs Data stored in TPSs is used to help managers make better decisions

31. Fundamentals of Information Systems, Fourth Edition 31 Management Information Systems Management information system (MIS) Organized collection of people, procedures, software, databases, and devices Provides routine information to managers/decision makers Primary focus is operational efficiency

32. Fundamentals of Information Systems, Fourth Edition 32 Management Information Systems (continued)

33. Fundamentals of Information Systems, Fourth Edition 33 Decision Support Systems Decision support system (DSS) Organized collection of people, procedures, software, databases, and devices Supports problem-specific decision making Focus is on decision-making effectiveness

34. Fundamentals of Information Systems, Fourth Edition 34 Decision Support Systems (continued)

35. Fundamentals of Information Systems, Fourth Edition 35 Specialized Business Information Systems: Knowledge Management, Artificial Intelligence, Expert Systems, and Virtual Reality Knowledge management systems (KMSs): an organized collection of people, procedures, software, databases, and devices to create, store, share, and use the organization’s knowledge and experience Artificial intelligence (AI): field in which the computer system takes on the characteristics of human intelligence – the test of “intelligence” is whether or not the user of the system can differentiate the answers come from a human or a computer

36. Fundamentals of Information Systems, Fourth Edition 36 Artificial Intelligence

37. Fundamentals of Information Systems, Fourth Edition 37 Expert Systems Give the computer the ability to make suggestions and act like an expert in a particular field Allow organizations to capture and use the wisdom of experts and specialists The knowledge base contains the collection of data, rules, procedures, and relationships that must be followed to achieve value or the proper outcome

38. Fundamentals of Information Systems, Fourth Edition 38 Virtual Reality Simulation of a real or imagined environment that can be experienced visually in three dimensions Immersive virtual reality Applications that are not fully immersive Can be a powerful medium for communication, entertainment, and learning

39. Fundamentals of Information Systems, Fourth Edition 39 Systems Development Systems development: creating or modifying existing business systems Systems development can be: Performed in-house Outsourced To improve results of a systems development project, it is divided into several steps

40. Fundamentals of Information Systems, Fourth Edition 40 Systems Development (continued)

41. Fundamentals of Information Systems, Fourth Edition 41 Systems Investigation and Analysis Systems investigation: gain understanding of the problem to be solved or opportunity to be addressed Systems analysis: defines problems and opportunities of the existing system

42. Fundamentals of Information Systems, Fourth Edition 42 Systems Design, Implementation, Maintenance, and Review Systems design: how the new system will work to meet the business needs defined during systems analysis Systems implementation: creating or acquiring the various system components defined in the design step, assembling them, and putting the new system into operation Systems maintenance and review: check and modify the system so that it continues to meet changing business needs

43. Fundamentals of Information Systems, Fourth Edition 43 Organizations and Information Systems Organization: collection of people and other resources established to accomplish a set of goals An organization is a system Inputs: resources (materials, people, money) Outputs: goods or services

44. Fundamentals of Information Systems, Fourth Edition 44 Organizations and Information Systems (continued)

45. Fundamentals of Information Systems, Fourth Edition 45 Organizations and Information Systems (continued) Value chain: series (chain) of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service Upstream management: management of raw materials, inbound logistics, and warehouse and storage facilities Downstream management: management of finished product storage, outbound logistics, marketing and sales, and customer service

46. Fundamentals of Information Systems, Fourth Edition 46 Organizations and Information Systems (continued)

47. Fundamentals of Information Systems, Fourth Edition 47 Organizations and Information Systems (continued) Supply chain management (SCM) Determines required supplies, needed quantities, processing, and shipment Customer relationship management (CRM) Helps company manage all aspects of customer encounters, including marketing, advertisement, sales, service, and maintaining loyalty

48. Fundamentals of Information Systems, Fourth Edition 48 Organizational Culture and Change Organizational culture Major understandings and assumptions Influences information systems Organizational change How organizations plan for, implement, and handle change Can be sustaining or disruptive

49. Fundamentals of Information Systems, Fourth Edition 49 User Satisfaction and Technology Acceptance Technology Acceptance Model (TAM): specifies factors that can lead to higher acceptance and usage of technology Technology diffusion: measure of widespread use of technology Technology infusion: extent to which technology permeates a department

50. Fundamentals of Information Systems, Fourth Edition 50 User Satisfaction and Technology Acceptance (continued) Competitive advantage: significant, long-term benefit to a company over its competition Ability to establish and maintain a competitive advantage is vital to the company’s success

51. Fundamentals of Information Systems, Fourth Edition 51 Factors That Lead Firms to Seek Competitive Advantage Five-forces model identifies key factors Rivalry among existing competitors Threat of new entrants Threat of substitute products and services Bargaining power of buyers Bargaining power of suppliers

52. Fundamentals of Information Systems, Fourth Edition 52 Strategic Planning for Competitive Advantage Cost leadership Deliver the lowest possible products and services Differentiation Deliver different products and services Niche strategy Deliver to a small, niche market Altering the industry structure Change the industry to become more favorable to organization

53. Fundamentals of Information Systems, Fourth Edition 53 Strategic Planning for Competitive Advantage (continued) Creating new products and services Introduce periodically or frequently – a new system can be the result of new information technology Improving existing product lines and service Make real or perceived improvements – such as mobile ability Other strategies Growth in sales First to market Customizing products and services Hiring the best people

54. Fundamentals of Information Systems, Fourth Edition 54 Performance-Based Information Systems Considers both strategic advantage and costs Uses productivity, return on investment (ROI), net present value, and other measures of performance

55. Fundamentals of Information Systems, Fourth Edition 55 Performance-Based Information Systems (continued)

56. Fundamentals of Information Systems, Fourth Edition 56 Productivity Output achieved divided by input required Higher level of output for a given level of input means greater productivity

57. Fundamentals of Information Systems, Fourth Edition 57 Return on Investment and the Value of Information Systems Earnings growth Increase in profits Market share Percentage of sales in relation to total market Customer awareness and satisfaction Based on feedback from internal and external users Total cost of ownership Measurement of total cost of owning computer equipment

58. Fundamentals of Information Systems, Fourth Edition 58 Risk Managers must consider the risks of designing, developing, and implementing new or modified information systems – one risk is that the information system will fail at a critical time Information system may be a failure Costs of development and implementation can be greater than the returns from the new system

59. Fundamentals of Information Systems, Fourth Edition 59 Careers In Information Systems Degree programs Degrees in information systems Business degrees with a global or international orientation Computer systems are making IS professionals’ work easier Opportunities in information systems are not confined to single countries

60. Fundamentals of Information Systems, Fourth Edition 60 Roles, Functions, and Careers in the IS Department Primary responsibilities in information systems Operations: focuses on the efficiency of IS functions Systems development: focuses on development projects and ongoing maintenance and review Support: provides user assistance, data administration, user training, and Web administration

61. Fundamentals of Information Systems, Fourth Edition 61 Roles, Functions, and Careers in the IS Department (continued)

62. Fundamentals of Information Systems, Fourth Edition 62 Typical IS Titles and Functions Chief Information Officer (CIO) Employs IS department’s equipment and personnel to help the organization attain its goals LAN administrators Set up and manage the network hardware, software, and security processes

63. Fundamentals of Information Systems, Fourth Edition 63 Typical IS Titles and Functions (continued) Internet careers Internet strategists and administrators Internet systems developers Internet programmers Internet or Web site operators Certification Examples: Microsoft Certified Systems Engineer, Certified Information Systems Security Professional (CISSP), and Oracle Certified Professional

64. Fundamentals of Information Systems, Fourth Edition 64 Other IS Careers New and exciting careers have developed in security and fraud detection and prevention Chief Information Security Officer Chief Security Officer Chief Privacy Officer Working for a large consulting firm such as Accenture, IBM, and EDS Developing or selling products for a hardware or software vendor Video game development

65. Fundamentals of Information Systems, Fourth Edition 65 Global Challenges in Information Systems Cultural challenges Language challenges Time and distance challenges Infrastructure challenges Currency challenges

66. Fundamentals of Information Systems, Fourth Edition 66 Global Challenges in Information Systems (continued) Product and service challenges Technology transfer issues State, regional, and national laws Trade agreements

67. Fundamentals of Information Systems, Fourth Edition 67 Summary Data: raw facts Information: organized collection of facts; has additional value beyond the value of facts themselves System components: input, processing, output, and feedback Computer-based information system (CBIS) Single set of hardware, software, databases, telecommunications, people, and procedures Collect, manipulate, store, and process data into information

68. Fundamentals of Information Systems, Fourth Edition 68 Summary (continued) Transaction processing system (TPS): organized collection of people, procedures, software, databases, and devices used to record completed business transactions Management information system (MIS): organized collection of people, procedures, software, databases, and devices used to provide routine information to managers and decision makers

69. Fundamentals of Information Systems, Fourth Edition 69 Summary (continued) Knowledge management system (KMS): an organized collection of people, procedures, software, databases, and devices to create, store, share, and use the organization’s knowledge and experience Artificial intelligence (AI): field in which the computer system takes on the characteristics of human intelligence

70. Fundamentals of Information Systems, Fourth Edition 70 Summary (continued) Decision support system (DSS): organized collection of people, procedures, software, databases, and devices used to support problem-specific decision making Systems development: creating or modifying existing business systems Competitive advantage: significant, long-term benefit to a company over its competition Primary responsibilities in information systems: operations, systems development, and support

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