Foundations of Enterprise Information System
Why should you study information systems?
How does a firm use information systems?
What are the components of an information system?
Ch ap ter
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McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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Learning Objectives
1. Understand the concept of a system and how it relates to information systems.
2. Explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need.
3. Give examples to illustrate how the business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage.
Learning Objectives
4. Provide examples of several major types of information systems from your experiences with business organizations in the real world.
5. Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business.
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Learning Objectives
6. Provide examples of the components of real world information systems. Illustrate that in an
information system, people use hardware, software, data and networks as resources to perform input, processing, output, storage, and control activities that transform data resources into information products.
7. Become familiar with the myriad of career opportunities in information systems.
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Why study Information Systems and Information Technology?
zVital component of successful businesses zHelps businesses expand and compete zBusinesses use IS and IT
zTo improve efficiency and effectiveness of business processes
zFor managerial decision making zFor workgroup collaboration
What is a system?
zA system
zIs a set of interrelated components zWith a clearly defined boundary
zWorking together to achieve a common set of objectives
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What is an Information System?
zAn organized combination of
zPeople zHardware zSoftware
zCommunications networks zData resources
zPolicies and procedures
zThat stores, retrieves, transforms, and disseminates information in an organization
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Information System (IS) versus Information Technology (IT)
zIS is all the components and resources necessary to deliver information and functions to the organization zIT is hardware, software, networking and data
management
zIn theory, IS could be paper based
zBut we will focus on Computer-Based Information Systems (CBIS)
IS Knowledge Framework for
Business Professionals
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What should a Business Professional know about IS?
zFoundation Concepts: fundamental behavioral, technical, business and managerial concepts zInformation Technology: Hardware, software,
networks, data management and Internet-based technology
zBusiness Applications: Major uses of the IS in the organization
zDevelopment Processes: How to plan, develop and implement IS to meet business opportunities zManagement Challenges: The challenges of
effectively and ethically managing IT
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What does IS do for a business?
Business Applications expanding
role over time
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Types of IS
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Operations support systems
zWhat are they?
zEfficiently process business transactions zControl industrial processes
zSupport communications and collaboration zUpdate corporate databases
Types of Operations Support Systems
zTransaction Processing Systems
zRecord and process data from business transactions zExamples: sales processing, inventory systems,
accounting systems zProcess Control Systems
zMonitor and control physical processes zExample: in a petroleum refinery use sensors to
monitor chemical processes zEnterprise Collaboration Systems
zEnhance team and work group communications zExamples: e-mail, videoconferencing
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Two ways to process transactions
zBatch Processing:
zAccumulate transactions over time and process periodically
zExample: a bank processes all checks received in a batch at night
zOnline Processing:
zProcess transactions immediately
zExample: a bank processes an ATM withdrawal immediately
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Management Support Systems
zWhat are they?
zProvide information and support for effective decision making by managers
Types of Management Support Systems
zManagement Information Systems (MIS)
zProvide reports and displays to managers zExample: daily sales analysis reports zDecision Support Systems (DSS)
zProvide interactive ad hoc support for decision making zExample: A what-if-analysis to determine where to
spend advertising dollars
zExecutive Information Systems (EIS)
zProvide critical information for executives and managers
zExample: easy access to actions of competitors
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Operational or Management Systems
zExpert Systems
zProvide expert advice
zExample: credit application advisor zKnowledge Management Systems
zSupport creation, organization and dissemination of business knowledge throughout company
zExample: Intranet access to best business practices
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Classifications of IS by scope
zFunctional business systems
zFocus on operational and managerial applications of basic business functions
zExamples: support accounting, finance or marketing zStrategic information systems
zHelp get a strategic advantage over its customers zExamples: shipment tracking, e-commerce web systems zCross-functional information systems
zSystems that are combinations of several types of information systems
zProvide support for many functions
Measuring success of an IS
zEfficiency
zMinimize cost, time and use of information resources zEffectiveness
zSupport business strategies zEnable business processes
zEnhance organizational structure and culture zIncrease the customer and business value zWhat’s the difference between Efficiency and
Effectiveness?
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Developing IS Solutions
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Ethical challenges of IT applications
Ethical responsibilities
zWhat uses of IT might be considered improper or harmful to other individuals or society?
zWhat is the proper business use of the Internet or a company’s IT resources?
zHow can you protect yourself from computer crime?
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IT Careers
zOutsourcing of basic programming to India, the Middle-East and Asia-Pacific countries
zStrong employment opportunities in other areas in IS zShortage of qualified IS personnel
zLong-term job outlook positive and exciting
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Career Opportunities in IS
Job growth
zAmong the fastest growing occupations through 2012
zSystems Analyst, zDatabase administrators, zOther managerial-level positions zNetwork specialists
zInformation security
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What is a system?
zA system
zIs a set of interrelated components zWith a clearly defined boundary
zWorking together to achieve a common set of objectives zBy accepting inputs and producing outputs in an
organized transformation process
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Systems have three basic functions:
z Input involves capturing and assembling elements that enter the system to be processed
z Processing involves transformation process that convert input into output
z Output involves transferring elements that have been produced by the transformation process to their ultimate destination
A business as a system
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Information systems model
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Components of an IS
zPeople
zEnd users: the people who use the IS or the information from the IS
zIS specialists: the people who develop and operate IS zHardware Resources
zAll physical devices used in information processing zMachines, data media, peripherals
zSoftware Resources
zAll information processing instructions including programs and procedures
zSystem software, application software and procedures
Components of an IS (cont.)
zData Resources
zFacts about the business transactions zProcessed and organized information zDatabases of organized data zNetwork Resources
zCommunications media
zNetwork infrastructure: hardware and software zThe Internet, intranets and extranets
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Data versus Information
zData are raw facts about physical phenomena or business transactions
zInformation is data that has been converted into meaningful and useful context for end users zExample:
zSales data is names, quantities and dollar amounts zSales information is amount of sales by product type,
sales territory or salesperson
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IS Activities
zInput of data resources
zData entry activities
zProcessing of data into information
zE.g., calculate, compare, sort, classify, summarize zOutput of information products
zMessages, reports, forms and graphic images zStorage of data resources
zData elements and databases zControl of system performance
zMonitoring and evaluating feedback
zThanks.
