Ppt ch01

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• The presentations cover the objectives found in the
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• All chapter objectives are listed in the beginning of
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2
Fundamentals of Information
Systems, Fifth Edition
Chapter 1
An Introduction to Information Systems
in Organizations

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 value of data
Fundamentals of Information Systems, Fifth Edition 3

(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 and organizations that reach their
goals
– Identify the basic types of business information
systems and discuss who uses them, how they are
used, and what kinds of benefits they deliver

(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

(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

(continued)
• Cooperation between business managers and IS
personnel is the key to unlocking the potential of
any new or modified system
– Define the types of roles, functions, and careers
available in information systems

Information Concepts
• Data, information, and knowledge
– Data: Raw facts
– Information: Collection of facts organized in such a
way that they have additional value beyond the
value of the facts themselves
– Process: Set of logically related tasks performed to
achieve a defined outcome
– Knowledge: Awareness and understanding of a set
of information

Data, Information, and Knowledge

(continued)

The Characteristics of Valuable
Information
• If information is not accurate or complete
– People can make poor decisions, costing thousands,
or even millions, of dollars
• Information can be of little value to the organization
– If information is not relevant, not delivered to
decision makers in a timely fashion, or too complex
to understand

The Value of Information
• Valuable information
– Can help people and their organizations perform
tasks more efficiently and effectively
– Can help managers decide whether to invest in
additional information systems and technology

What Is an Information System?
• Feedback mechanism
– The component that helps organizations achieve
their goals, such as increasing profits or improving
customer service

What Is an Information System?
(continued)

Input, Processing, Output, Feedback
• Input
– 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

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

Computer-Based Information Systems
• Single set of hardware, software, databases,
telecommunications, people, and procedures
configured to collect, manipulate, store, and
process data into information
• Information technology (IT)
– Hardware, software, databases, and
telecommunications

(continued)

(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
– Telecommunications: Electronic transmission of
signals for communications
– Networks: Connect computers and equipment in a
building, around the country, and around the world

(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

Business Information Systems
• Most common types of information systems used
are those designed for:
– Electronic and mobile commerce
– Transaction processing
– Management information
– Decision support

(continued)

Electronic and Mobile Commerce
• E-commerce
– Any business transaction executed electronically
between:
• Companies (B2B)
• Companies and consumers (B2C)
• Consumers and other consumers (C2C)
• Business and the public sector
• Consumers and the public sector

(continued)
• Mobile commerce (m-commerce)
– Transactions conducted anywhere, anytime
• Electronic business (e-business)
– Uses information systems and the Internet to
perform all business-related tasks and functions

(continued)

Enterprise Systems: Transaction
Processing Systems and Enterprise
Resource Planning
• Transaction
– Any business-related exchange
• Transaction processing system (TPS)
– Organized collection of people, procedures,
software, databases, and devices used to record
completed business transactions
• Enterprise resource planning
– Programs that manage the vital business operations
for an entire multisite, global organization

Enterprise Systems: Transaction
Processing Systems and Enterprise
Resource Planning (continued)

Information and Decision Support
Systems
• Management information systems
software, databases, and devices
– Provides routine information to managers/decision
makers
• Decision support systems
software, databases, and devices that support
problem-specific decision making

Systems (continued)

Specialized Business Information
Systems: Knowledge Management,
Artificial Intelligence, Expert Systems,
and Virtual Reality
• Knowledge management systems (KMSs)
software, databases, and devices
• Artificial intelligence (AI)
– Field in which the computer system takes on the
characteristics of human intelligence
– Robotics, vision systems, and natural language
processing

and Virtual Reality (continued)

and Virtual Reality (continued)
• Expert systems
– Give the computer the ability to make suggestions
and act like an expert in a particular field
• Virtual reality
– The simulation of a real or imagined environment
that can be experienced visually in three dimensions

Systems Development
• Creating or modifying existing business systems
• Systems development failures can be a result of:
– Poor planning and scheduling
– Insufficient management of risk
– Poor requirements determination
– Lack of user involvement
• Outsourcing
– Allows a company to focus on what it does best and
delegate other functions

Systems Development (continued)

Systems Investigation and Analysis
• Systems investigation
– Goal is to gain understanding of the problem to be
solved or opportunity to be addressed
• Systems analysis
– Defines problems and opportunities of the existing
system

Systems Design, Implementation, and
Maintenance and Review
• Systems design
– Determines how the new system will work to meet
the business needs defined during systems analysis
• Systems implementation
– Creating or acquiring the system components
defined in the design step, assembling them, and
putting the new system into operation
• Systems maintenance and review
– Checking and modifying the system so that it
continues to meet changing business needs

Organizations and Information
Systems
• Organization
– Collection of people and other resources established
to accomplish a set of goals
– Has inputs, processing mechanisms, outputs, and
feedback

Systems (continued)

Systems (continued)
• Value chain
– Series of activities that includes inbound logistics,
warehouse and storage, and production
• Supply chain management (SCM)
– Helps determine what supplies are required for the
value chain and what quantities are needed to meet
customer demand
• Customer relationship management (CRM)
– Helps companies manage all aspects of customer
encounters, including marketing and advertising

Systems (continued)

Organizational Culture and Change
• Organizational culture
– Major understandings and assumptions
– The understandings are often not stated or
documented as goals or formal policies
• Organizational change
– How organizations plan for, implement, and handle
change
– Can be sustaining or disruptive

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

Competitive Advantage
• Significant, long-term benefit to a company over its
competition
• An organization often uses its information system
to help achieve a competitive advantage

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

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

Strategic Planning for Competitive
Advantage (continued)
• Creating new products and services
– Introduce periodically or frequently
• Improving existing product lines and service
– Make real or perceived improvements
• Other strategies
– Growth in sales
– First to market
– Customizing products and services
– Hiring the best people

Performance-Based Information
Systems
• Three major stages
– Organizations focused on using information systems
to reduce costs and improve productivity
– Companies generally ignored revenue potential, not
looking for opportunities to use information systems
to increase sales
– Companies carefully consider both strategic
advantage and costs

Performance-Based Information
Systems (continued)

Productivity
• Output achieved divided by input required
• Higher level of output for a given level of input
means greater productivity
• Lower level of output for a given level of input
means lower productivity

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
– Sum of all costs over the life of the information
system

Risk
• Managers must consider the risks of:
– Designing, developing, and implementing new or
modified information systems
• Information systems can be costly failures
• Costs of development and implementation can be
greater than the returns from the new system

Careers In Information Systems
• Knowledge workers (KWs)
– People who create, use, and disseminate knowledge
• Students are increasingly completing business
degrees with a global or international orientation

Roles, Functions, and Careers in IS
• 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
– Information service units: Miniature IS department
attached and directly reporting to a functional area in
a large organization

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
• Internet careers
– Opportunities are found in both traditional companies
and those that specialize in the Internet

Other IS Careers
• New and exciting careers have developed in
security and fraud detection and prevention
– Chief information security officer
– Chief privacy officer
• IS career opportunities include being employed by:
– Microsoft (www.microsoft.com), Google
(www.google.com), and Dell (www.dell.com)

Finding a Job in IS
• Sources
– On-campus visits from recruiters and referrals from
professors, friends, and family members
– The Internet

Global Challenges in Information
Systems
• Cultural challenges
• Language challenges
• Time and distance challenges
• Infrastructure challenges
• Currency challenges

Global Challenges in Information
Systems (continued)
• Product and service challenges
• Technology transfer issues
• State, regional, and national laws
• Trade agreements

Summary
• Data consists of raw facts
• Information
– Data transformed into a meaningful form
• Types of systems include:
– E-commerce and m-commerce
– TPS and ERP
– MIS and DSS
– Specialized business information systems

Summary (continued)
• Systems development
– Creating or modifying existing business systems
• Organization
– Formal collection of people and various other
resources established to accomplish a set of goals
• Supply chain management (SCM) helps determine:
– What supplies are required
– What quantities are needed to meet customer
demand
– How the supplies are to be processed

Summary (continued)
• Five-forces model covers:
– Rivalry among existing competitors
– Threat of new market entrants
– Threat of substitute products and services
– Bargaining power of buyers and suppliers
• Information systems personnel typically work in an
IS department that employs:
– A chief information officer
– Systems analysts
– Computer programmers and operators

Ppt ch01

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