ACS-1803 Introduction to Information Systems

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ACS-1803Introduction to Information Systems

• Instructor Kerry Augustine

Final Review Fall Lecture Series
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Learning Objectives

1. Describe the characteristics that differentiate
   the operational, managerial, and executive levels
   of an organization
2. Explain the characteristics of the three
   information systems designed to support each
   unique level of an organization Transaction
   Processing Systems (TPS), Management Information
   Systems (MIS), and Executive Information Systems
   (EIS)

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Learning Objectives

1. Explain the characteristics of the information
   systems functional framework designed to support
   each unique level of an organization Transaction
   Processing Systems (TPS), Management Information
   Systems (MIS), and Executive Information Systems
   (EIS).

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Learning Objectives

• 1. Explain how organizations support business
  activities by using information technologies
  across the enterprise.
• Explain Porters Value Chain and how the model
  relates to the functional flow of goods and
  services within an organization.
• Describe Supply Chain Management (SCM), Customer
  Relationship Management (CRM), and Enterprise
  Resource Planning (ERP) Systems. Describe how
  they relate to the Value Chain.

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Systems That Span Organizational Boundaries-
Re-cap
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Learning Objectives

1. Describe the characteristics of six information
   systems that span the organizational, managerial,
   and executive levels Functional Information
   Systems (Re-cap), Decision Support Systems (DSS),
   Expert Systems (ES), Office Automation Systems
   (OAS), Collaboration Technologies, and Global
   (Geographic) Information Systems

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Levels of the Organization
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The Organizational Pyramid
Executive Level Strategic planning and
responses to strategic issues occur here.
Executive decisions are usually unstructured and
are made using consolidated internal and external
information
Managerial Level Monitoring and
controlling of operational activities and
executive information support occur here.
Managerial decisions are usually semistructured
and are made using procedures and ad hoc tools
Operational Level Day-to-day business
processes and interactions with customers occur
here. Operational decisions are usually
structured and are made using established
policies and procedures
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Who, What, Why Organizational Level
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Who, What, Why Managerial Level
Tactical /
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Who, What, Why Executive Level
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Systems That Span Organizational Boundaries

• Executive Information Systems

• Decision Support Systems (both levels)

• Management Information Systems

• Transaction Processing Systems

• Expert Systems

• Functional Area Information Systems
• (Across all levels within a function)

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Common EIS Features L
1. Drill-down reporting can drill down
summarized info to lower levels for more insight
e.g., exec. sees a low profit he can drill down
through simple menu choices to see data -by
region, -by market within region, - by
salesperson can often trace the root of a
problem through this feature 2. Exception
reporting emphasizes business items that may be
out of line (in another color) 3. Graphic
presentation more impact on a busy exec. 4.
Trend analysis explores data, e.g., sales over
time to highlight trends and patterns
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Common EIS Features (Cont) L
5. Electronic mail for efficient communications
may also include features such as electronic
appointment book 6. On-demand ratios that
provide meaningful insight, often on financial
issues 7. Access to external data pools EIS must
be very easy to use, often not requiring the
keyboard
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System Architecture Executive Information Systems
Strategic /
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System Example Executive Reporting Drill-down
(EIS)
Second Level Data Drill Down
First Level Graphical Summary
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Systems That Span Organizational Boundaries

• Executive Information Systems

• Decision Support Systems (both levels)

• Management Information Systems

• Transaction Processing Systems

• Expert Systems

• Functional Area Information Systems
• (Across all levels within a function)

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Systems That Span Organizational Boundaries
Transaction Processing Systems Management
Information Systems Executive Information
Systems Decision Support Systems Expert
Systems Functional Area Information Systems
Process day-to-day business event data in an
organization (Operational level) Produce
detailed information to help manage a firm or
part of a firm (Managerial) Provide very
high-level, aggregate information to support
decisions (Executive) Provide analysis tools and
databases to support quantitative decision making
(Multiple) Mimic human expert in a particular
area and provide answers or advice
(Operational) Support the activities within a
specific functional area of the firm (All)
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Systems That Span Organizational Boundaries
Support a wide range of predefined, daily work
activities of individuals or groups (e.g. MS
Word) Enable people to communicate, collaborate,
and coordinate with each other (e.g.
email) Support the interaction between the firm
and its customers (e.g. sales force automation or
call center technology) Enable customers to buy
goods and services from a firms website.
(www.amazon.com) Support and integrate all
facets of the business (e.g. planning,
manufacturing, sales, etc.)
Office Automation System Collaboration
System Customer Relationship Management Electr
onic Commerce Enterprise Resource Planning
System
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Systems That Span Organizational Boundaries
Geographic Information Systems
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Systems That Span Organizational Boundaries
Geographic Information Systems
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Functional Area Information Systems
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System Examples Functional Area Info Systems
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Functional Area Information Systems
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Functional Area Information Systems
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System Examples Functional Area Info Systems
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Tactical Systems in Finance

• A. Budgeting Systems
• B. Cash Management Systems
• C. Capital Budgeting Systems
• D. Investment Management Systems

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Strategic Systems in Finance

• A. Financial Condition Analysis Systems
• B. Long-Range Forecasting Systems
• C. Corporate Planning Systems

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Functional Area Information Systems
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System Examples Functional Area Info Systems
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Functional Area Information Systems
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System Examples Functional Area Info Systems
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Functional Area Information Systems
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System Examples Functional Area Info Systems
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MRP / MRP II
Inventory levels Supply Capacity
Amounts to be produced Staffing levels
Bill of Materials List of raw materials needed
to produce one unit of finished product and the
quantity of each material
(MRP)
MRP II

• Route Sheet Describes sequence of different
  operations in the manufacturing of a part and
  identifies different work centers where the part
  is processed.
• Required operations
• Standard time (People Machine)

Capacity Requirements Planning
Quality control Shop floor control
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MRP MRP II (ERP)
MRP II
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The Supply Network
Push- versus Pull-Based Supply Chain Models
MRP II
JIT
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CRM Systems
CRM Software Capabilities
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Sales Force Automation Tools
Operational CRM Systems

• Sales Process/Activity Management
• Include a sequence of sales activities
• Guide sales reps through each discrete step in
  the sales process

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CRM Systems (cont)
Business Value of Customer Relationship
Management Systems

• Increased customer satisfaction
• More effective marketing and reduced direct
  marketing costs
• Lower costs for customer acquisition and
  retention
• Increased revenue from identifying most
  profitable customers and segments for marketing,
  cross-selling, up-selling
• Reduced churn rate (Number of customers who stop
  using or purchasing products or services from a
  company)

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CRM Systems (cont)
CRM Performance Measurement

• Metrics for CRM performance may include
• Cost per lead
• Cost per sale
• Number of repeat customers
• Reduction of churn
• Sales closing rate
• Customer Lifetime Value (CLTV)
• Difference between revenues and expenses minus
  the cost of promotional marketing used to retain
  an account.

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Enterprise Resource Planning
Integrated Packages (Enterprise Resource
Planning) Richly functional systems designed to
support many organizational functions (e.g.
accounting and finance)

• ERP Key Characteristics
• Internally focused systems designed to support
  the internal operations of the organization
• Highly integrated systems sharing a common data
  warehouse for information sharing across
  functions, using real-time updates
• Organizational fit may be less for individual
  departments but the integrated sharing of
  information usually outweighs these issues
• Usually packaged applications supported by the
  vendor utilizing a common user interface
• Customization is discouraged but these systems
  have the flexibility to support other outside
  applications using the common data repository and
  interfaces

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ERP Software
Enterprise System Architecture
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ERP Software (Cont)

• Enterprise Resource Planning (ERP) systems
• Interdependent software modules with a common
  central database
• Support basic internal business processes for
  finance and accounting, human resources,
  manufacturing and production, and sales and
  marketing
• Enables data to be used by multiple functions and
  business processes for precise organizational
  coordination and control

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ERP Software (Cont)

• Enterprise Resource Planning (ERP) Systems
• Software is developed around predefined business
  processes
• Firms select functions needed, then map to the
  predefined processes in the software
• Best practices are the most successful solutions
  or problem-solving methods for consistently
  achieving an objective

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Recommendations for Enterprise System Success
Secure Executive Sponsorship The highest level
support is required to obtain resources and make
and support difficult reengineering decisions
Get Help from Outside Experts Implementation
success is enabled by deep application experience
and access to supporting tools and methods
Thoroughly Train Users Training in organization,
business process, and application functions is
critical to success and must be reinforced
Take a Multidisciplinary Approach to
Implementations Enterprise systems span the
entire organization and as such require input and
participation from all functions
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Typical ERP Functionality - Value Chain
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Vertical Area Systems
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Vertical Area Systems L
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Vertical Area Systems L
 - vertical systems are acquired and installed
ready-made ("canned " systems) - must fit with
how a business operates or business will have to
change operations - or, the software may be
modified in-house, or by the vendor -
some vertical systems are quite expensive
(135,000) in such a case, formal package
evaluation may be undertaken - an installed
"canned" system should connect well to other
existing systems
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Decision Support SystemsExpert Systems
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Systems That Span Organizational Boundaries

• Executive Information Systems

• Decision Support Systems (both levels)

• Management Information Systems

• Transaction Processing Systems

• Expert Systems

• Functional Area Information Systems
• (Across all levels within a function)

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Systems That Span Organizational Boundaries
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Common Decision Support Systems
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System Architecture Decision Support Systems
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Decision Support Systems L
- typically include a) a data base, perhaps a
"data warehouse", extracted from a "live
database, b) a model base that uses the data
base a model is a structured representation of
some aspect of reality it is because of the
model that we can examine effects of decisions
but, a model always has assumptions e.g.,
inflation rate, net earnings level over 5 years
cost increases c) a user-friendly interface
(dialog), often involving graphics
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The Database

• Database management system
• Allows managers and decision makers to perform
  qualitative analysis on data stored in companys
  databases, data warehouses, and data marts
• Can also be used to connect to external databases
• Data-driven DSS
• Performs qualitative analysis based on the
  companys databases

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The Model Base

• Model base
• Allows managers and decision makers to perform
  quantitative analysis on both internal and
  external data
• Model-driven DSS
• Performs mathematical or quantitative analysis
• Model management software (MMS)
• Coordinates the use of models in a DSS

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Three Fundamental DSS Components
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DSS Examples L

• A more primitive example of a DSS is a
  spreadsheet used for what-if analysis
• There are Excel templates built for certain types
  of decisions terms template, model explain
  these
• Can be data driven or model driven
• A Model Driven DSS is one in which decision
  makers use statistical simulations or financial
  models to come up with a solution or strategy.
• A Data Driven DSS model puts its emphasis on
  collected data that is then manipulated to fit
  the decision makers needs. This data can be
  internal or external and in a variety of formats.
  It is important that data is collected and
  categorized sequentially, for example daily
  sales, operating budgets from one quarter to the
  next, inventory over the previous year, etc.

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Systems That Span Organizational Boundaries

• Executive Information Systems

• Decision Support Systems (both levels)

• Management Information Systems

• Transaction Processing Systems

• Expert Systems

• Functional Area Information Systems
• (Across all levels within a function)

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System Architecture Expert Systems
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Expert System Structure L

• Knowledge base
• Facts and rules
• Inference engine
• Software that takes user input and sifts
  through the knowledge base mimicking the mind of
  an expert
• This is artificial intelligence

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Expert System Development MC

• A knowledge engineer has special expertise in
  eliciting information and expertise from experts
• He / she translates the experts knowledge into a
  set of (if .. then) rules

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eBusiness/ eCommerce- B2C, B2B, B2E, C2C
Reference Text Pages 218 - 228
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Learning Objectives

• Describe electronic commerce and how it has
  evolved
• Describe the strategies that companies are
  adopting to compete in cyberspace
• Explain the differences between extranets and
  intranets as well as show how organizations
  utilize these environments
• Describe the stages of business-to-consumer
  electronic commerce and the key drivers for the
  emergence of mobile commerce
• Understand the keys to successful electronic
  commerce applications
• Understand general eBusiness security
  fundamentals

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Types of Electronic Commerce
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Front-End Systems L

• Front- end systems are those processes with which
  a user interfaces, and over which a customer can
  exert some control.
• For an eBusiness, front-end systems are the Web
  site processes that customers use to view
  information and purchase products and services.

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Back-End Systems L

• Back-end systems are those processes that are not
  directly accessed by customers.
• Back-end systems include the businesss TPS and
  MIS systems that handle the accounting and
  budgeting, manufacturing, marketing, inventory
  management, distribution, order-tracking, and
  customer support processes.

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Front Back-End Systems
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Integrating the ends L

• Online sales transactions are the heart of an
  e-businesss operations.
• The sales and payment information gathered from
  online sales transactions must be integrated with
  other back-end processes

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Systems Development
Reference Text Pages 354 - 392
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Principles and Learning Objectives

• Understand the process used by organizations to
  manage the development of information systems
• Describe each major phase of the system
  development life cycle systems identification,
  selection, and planning system analysis system
  design system implementation and system
  maintenance
• Understand the factors involved in building a
  system in-house, along with situations in which
  it is not feasible

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System Development Life Cycle L

• usually a system is developed in specific SDLC
  stages
• 1. Systems Investigation
• a) Problem Definition
• b) Feasibility Study
• 2. System Analysis
• 3. System Design
• a) General Design
• b) Detailed Design
• 4. System Development (Building)
• 5. System Implementation
• 6. System Maintenance
• Stages not necessarily linear

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System Development Life Cycle L

• usually a system is developed in specific SDLC
  stages
• 1. Systems Investigation
• a) Problem Definition
• b) Feasibility Study
• 2. System Analysis
• 3. System Design
• a) General Design
• b) Detailed Design
• 4. System Development (Building)
• 5. System Implementation
• 6. System Maintenance

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System Development Life Cycle L

• Systems Investigation
• ltshould we really develop a new system?gt
• - identify problems with the current system and
  opportunities for improvement
• why do we want a new system?
• do initial feasibility study for the proposed
  system L
• - financial feasibility (is available)
• - technical feasibility (is equipment available)
• - operational feasibility (will people be able to
  work with new system)

• if we determine that a new system is feasible,
  we go on to the next stages

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Systems Investigation
Criteria for evaluating and selecting a systems
project
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System Development Life Cycle L

• usually a system is developed in specific SDLC
  stages
• 1. Systems Investigation
• a) Problem Definition
• b) Feasibility Study
• 2. System Analysis
• 3. System Design
• a) General Design
• b) Detailed Design
• 4. System Development (Building)
• 5. System Implementation
• 6. System Maintenance

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System Development Life Cycle

• System Analysis L
• - analyze the current information system (manual
  or computerized), in terms of data, processing
  and information flow, and user input/output
• - ask where are problems with the current system
  or what other reasons are there to develop a new
  system
• we get an idea of WHAT will be required of the
  new system in terms of data, processing, and user
  interfaces we document this in detail

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System Development Life Cycle L

• usually a system is developed in specific SDLC
  stages
• 1. Systems Investigation
• a) Problem Definition
• b) Feasibility Study
• 2. System Analysis
• 3. System Design
• a) General Design
• b) Detailed Design
• 4. System Development (Building)
• 5. System Implementation
• 6. System Maintenance

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System Design MC

• Detailed design for
• Database
• Programs
• Menu, input, output screens, reports
• Controls
• Hardware telecomm
• Organizational aspects

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System Development Life Cycle L

• usually a system is developed in specific SDLC
  stages
• 1. Systems Investigation
• a) Problem Definition
• b) Feasibility Study
• 2. System Analysis
• 3. System Design
• a) General Design
• b) Detailed Design
• 4. System Development (Building)
• 5. System Implementation
• 6. System Maintenance

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System Development Life Cycle
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Alternatives to Systems Development
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Principles and Learning Objectives

• Explain three alternative systems development
  options external acquisition, outsourcing, and
  end-user development
• Understand the role of the IS function within an
  organization

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Needs for Alternatives to Internal Systems
Building
Often it is not feasible to consider building an
information system internally. Below are four
situations that discourage the idea of internal
development
Limited IS Staff Limited IS Skill Sets IS
Staff is Overworked Problem IS Performance
The IS organization does not have the
capability to build the system itself The IS
organization does not have personnel with the
correct skill sets to build the system Current
IS organization staff demands and priorities make
it impossible to build a system The IS
organization does not have the appropriate
performance level to build a system
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Alternatives to Internal Development
End-user Development Capitalizing on the
sophistication of current users, this technique
allows the system users to develop their system
functions using a variety of tools
External Acquisition The purchasing of an
existing system (hardware, software, databases,
network) from an outside vendor such as IBM, EDS,
or Accenture
Outsourcing Turning over some or all
responsibility for an organizations information
systems development and operations to an outside
firm
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The Auditing of Information Systems
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Information System Controls L

• Controls are implemented to counteract risks
• General (overall) controls, e.g. passwords, virus
  protection software, restricted physical access,
  backups of data files
• Controls for a specific system input controls,
  data storage controls, processing controls,
  output controls
• Also system development controls, system
  acquisition controls, system modification
  controls

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Making Sense of This L

• There are six areas of risk in an organizations
  information systems as identified here
• 1.Overall (General) (L)
• 2. System development, acquisition and (X)
• 3. Modification (X)
• 4. The working of the programs in the system
  (processing) (X)
• 5. The capture and input of data into the system
  (source data) (X)
• 6. The storage of data that has been input (data
  files) (L)

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For each area of risk (1 to 6)L

• A.What are some actual risks (e.g., possible
  error or fraud)?
• B. What are some controls to counteract these
  risks?
• C. What might an internal auditor do,
  specifically, to assess each such control, and
  how would s/he do it?

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The Information Systems Function within an
Organization
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Main Duties and Functions L

• Manage computer operations
• Includes all current information systems
• Manage and carry out new system development
• Manage IS personnel
• Budget of the department
• Help organization to plan for strategic, tactical
  and operational systems
• Justify financial investment in information
  systems

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Typical Organizational Structure L

• Chief Information Officer
• Divisions
• 1. Operations
• 2. Development
• 3. End-User services

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Three Distinct Competencies of IS ProfessionalsL

• Technical
• Knowledge of hardware, software, networking, and
  security
• Most IS professionals are not deep technical
  experts but can direct/manage others with the
  required technical skills

• Business
• Understand the nature of business including
  process, management, social, and communication
  domains
• Unique skills over those with only technical
  skills

• Systems
• Knowledge of approaches and methods, also possess
  critical thinking and problem solving skills
  necessary to build and integrate large
  information systems
• Unique skills over those with only technical
  skills

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Personal and Social Impact of Information Systems
Reference Text Pages 407 - 421
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Principles and Learning Objectives

• Analyze the ethical, social, and political issues
  that are raised by information systems
• Discuss the ethical concerns associated with
  information privacy, accuracy, property, and
  accessibility
• Define computer crime, and list several types of
  computer crime

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Information Accuracy MC
Information Accuracy Concerned with assuring the
authenticity and fidelity of information, and
identifying those responsible for information
errors that harm people

• Sources of information error
• Errors in computer output can come from two
  primary sources. These are
• Machine Errors errors in the computer program
  logic, communication and/or processing that
  receives, processes, stores, and presents
  information
• Human Errors errors by the person(s) entering
  data or information into the computer system

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Computer Crimes - Hacking and Cracking MC
Hackers A term to describe unauthorized access to
computers based entirely on a curiosity to learn
as much as possible about computers. It was
originally used to describe MIT students in the
1960s that gained access to mainframes. It was
later used universally used for gaining
unauthorized access for any reason
Crackers A term to describe those who break into
computer systems with the intention of doing
damage or committing crimes. This term was
created because of protests by true hackers