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Foundations of

Information Systems inBusiness

Chapter

1

Dr. Hj. Rosmaini bin Hj. TasminFaculty of Technology Management

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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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Foundation Concepts

Why study information systems andinformation technology?

Vital component of successfulbusinesses

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) 1-7

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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

1-15

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Operations Support Systems

What do they do?

Efficiently process businesstransactions

Control industrial processes

Support communications andcollaboration

Update corporate databases

1-16

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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 1-17

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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

1-18

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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

1-19

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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 1-20

manager

executive

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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

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IT Challenges and Opportunities

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IT Careers

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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 fordecision making

A vital ingredient in developing competitiveproducts and services in the global marketplace

A dynamic and challenging career opportunity

A key component of todays networked business 1-25

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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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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

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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 1-34

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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 documents

using 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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