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Fundamentals of Information Systems

Fundamentals of Information Systems
Fundamentals of Information Systems, Fifth Edition Chapter 1 An Introduction to Information Systems in Organizations 1 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 2 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 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 Fundamentals of Information Systems, Fifth Edition 3 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 Fundamentals of Information Systems, Fifth Edition 4 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 valueadded 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 Fundamentals of Information Systems, Fifth Edition 5 Principles and Learning Objectives (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 Fundamentals of Information Systems, Fifth Edition 6 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 Fundamentals of Information Systems, Fifth Edition 7 Data, Information, and Knowledge Fundamentals of Information Systems, Fifth Edition 8 Data, Information, and Knowledge (continued) Fundamentals of Information Systems, Fifth Edition 9 Data, Information, and Knowledge (continued) Fundamentals of Information Systems, Fifth Edition 10 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 Fundamentals of Information Systems, Fifth Edition 11 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 Fundamentals of Information Systems, Fifth Edition 12 What Is an Information System •  Feedback mechanism –  The component that helps organizations achieve their goals, such as increasing profits or improving customer service Fundamentals of Information Systems, Fifth Edition 13 What Is an Information System (continued) Fundamentals of Information Systems, Fifth Edition 14 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 Fundamentals of Information Systems, Fifth Edition 15 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 Fundamentals of Information Systems, Fifth Edition 16 ComputerBased 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 Fundamentals of Information Systems, Fifth Edition 17 ComputerBased Information Systems (continued) Fundamentals of Information Systems, Fifth Edition 18 ComputerBased 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 –  Telecommunications: Electronic transmission of signals for communications –  Networks: Connect computers and equipment in a building, around the country, and around the world Fundamentals of Information Systems, Fifth Edition 19 ComputerBased 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 Fundamentals of Information Systems, Fifth Edition 20 Business Information Systems •  Most common types of information systems used are those designed for: –  Electronic and mobile commerce –  Transaction processing –  Management information –  Decision support Fundamentals of Information Systems, Fifth Edition 21 Business Information Systems (continued) Fundamentals of Information Systems, Fifth Edition 22 Business Information Systems (continued) Fundamentals of Information Systems, Fifth Edition 23 Electronic and Mobile Commerce •  Ecommerce –  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 Fundamentals of Information Systems, Fifth Edition 24 Electronic and Mobile Commerce (continued) •  Mobile commerce (mcommerce) –  Transactions conducted anywhere, anytime •  Electronic business (ebusiness) –  Uses information systems and the Internet to perform all businessrelated tasks and functions Fundamentals of Information Systems, Fifth Edition 25 Electronic and Mobile Commerce (continued) Fundamentals of Information Systems, Fifth Edition 26 Electronic and Mobile Commerce (continued) Fundamentals of Information Systems, Fifth Edition 27 Enterprise Systems: Transaction Processing Systems and Enterprise Resource Planning •  Transaction –  Any businessrelated 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 Fundamentals of Information Systems, Fifth Edition 28 Enterprise Systems: Transaction Processing Systems and Enterprise Resource Planning (continued) Fundamentals of Information Systems, Fifth Edition 29 Information and Decision Support Systems •  Management information systems –  Organized collection of people, procedures, software, databases, and devices –  Provides routine information to managers/decision makers •  Decision support systems –  Organized collection of people, procedures, software, databases, and devices that support problemspecific decision making Fundamentals of Information Systems, Fifth Edition 30 Information and Decision Support Systems (continued) Fundamentals of Information Systems, Fifth Edition 31 Information and Decision Support Systems (continued) Fundamentals of Information Systems, Fifth Edition 32 Specialized Business Information Systems: Knowledge Management, Artificial Intelligence, Expert Systems, and Virtual Reality •  Knowledge management systems (KMSs) –  Organized collection of people, procedures, 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 Fundamentals of Information Systems, Fifth Edition 33 Specialized Business Information Systems: Knowledge Management, Artificial Intelligence, Expert Systems, and Virtual Reality (continued) Fundamentals of Information Systems, Fifth Edition 34 Specialized Business Information Systems: Knowledge Management, Artificial Intelligence, Expert Systems, 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 Fundamentals of Information Systems, Fifth Edition 35 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 Fundamentals of Information Systems, Fifth Edition 36 Systems Development (continued) Fundamentals of Information Systems, Fifth Edition 37 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 Fundamentals of Information Systems, Fifth Edition 38 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 Fundamentals of Information Systems, Fifth Edition 39 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 Fundamentals of Information Systems, Fifth Edition 40 Organizations and Information Systems (continued) Fundamentals of Information Systems, Fifth Edition 41 Organizations and Information 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 Fundamentals of Information Systems, Fifth Edition 42 Organizations and Information Systems (continued) Fundamentals of Information Systems, Fifth Edition 43 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 Fundamentals of Information Systems, Fifth Edition 44 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 Fundamentals of Information Systems, Fifth Edition 45 Competitive Advantage •  Significant, longterm benefit to a company over its competition •  An organization often uses its information system to help achieve a competitive advantage Fundamentals of Information Systems, Fifth Edition 46 Factors That Lead Firms to Seek Competitive Advantage •  Fiveforces 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 Fundamentals of Information Systems, Fifth Edition 47 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 Fundamentals of Information Systems, Fifth Edition 48 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 Fundamentals of Information Systems, Fifth Edition 49 PerformanceBased 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 Fundamentals of Information Systems, Fifth Edition 50 PerformanceBased Information Systems (continued) Fundamentals of Information Systems, Fifth Edition 51 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 Fundamentals of Information Systems, Fifth Edition 52 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 Fundamentals of Information Systems, Fifth Edition 53 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 Fundamentals of Information Systems, Fifth Edition 54 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 Fundamentals of Information Systems, Fifth Edition 55 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 Fundamentals of Information Systems, Fifth Edition 56 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 Fundamentals of Information Systems, Fifth Edition 57 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) Fundamentals of Information Systems, Fifth Edition 58 Finding a Job in IS •  Sources –  Oncampus visits from recruiters and referrals from professors, friends, and family members –  The Internet Fundamentals of Information Systems, Fifth Edition 59 Global Challenges in Information Systems •  Cultural challenges •  Language challenges •  Time and distance challenges •  Infrastructure challenges •  Currency challenges Fundamentals of Information Systems, Fifth Edition 60 Global Challenges in Information Systems (continued) •  Product and service challenges •  Technology transfer issues •  State, regional, and national laws •  Trade agreements Fundamentals of Information Systems, Fifth Edition 61 Summary •  Data consists of raw facts •  Information –  Data transformed into a meaningful form •  Types of systems include: –  Ecommerce and mcommerce –  TPS and ERP –  MIS and DSS –  Specialized business information systems Fundamentals of Information Systems, Fifth Edition 62 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 Fundamentals of Information Systems, Fifth Edition 63 Summary (continued) •  Fiveforces 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 Fundamentals of Information Systems, Fifth Edition 64