Chapter 1 Business Information Systems: An Overview

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Chapter 1Business Information Systems An
Overview
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Learning Objectives

• Explain why information systems are essential to
  business
• Describe how computers process data into useful
  information for problem solving and decision
  making
• Identify the functions of different types of
  information systems
• Describe how different information systems serve
  different levels within an organization

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Learning Objectives (Cont.)

• Evaluate how telecommunications and database
  technology can help implement the goals of
  information systems
• Recognize the role of information technology in
  e-commerce
• List major factors to consider when evaluating
  information systems and their roles in
  organizations
• Identify major ethical and societal conflicts
  created by widespread use of information systems

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Information Systems

• Why Do People Need Information?
• Individuals Entertainment and enlightenment
• Businesses Decision making and problem solving
• Gathering
• Storing
• Manipulating

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Data, Information, and Systems

• Data vs. Information
• Data
• A given or fact a number, a statement, or a
  picture
• The raw materials in the production of
  information
• Information
• Data that have meaning within a context (a
  specific time space)
• Raw data or data that have been manipulated

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Data Manipulation

• Raw data
• Time-consuming to read
• Difficult to understand
• Manipulated Data
• Provides useful information

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Generating Information

• Raw data are processed in an IS to create final
  useful information
• Process Manipulation of data
• Computer-based ISs process data to produce
  information

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Information Important Resource

• Information must be useful
• Relevant
• Complete
• Accurate
• Current
• Cost effective in business

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What Is a System?

• System A set of components that work together to
  achieve a common goal
• Subsystem One part of a system where the
  products of more than one system are combined to
  reach an ultimate goal
• Closed system Stand-alone system that has no
  contact with other systems no flow-ins or
  flow-outs
• Open system System that interfaces with other
  systems

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Systems and Subsystems
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Information and Managers

• Systems thinking
• Viewing organization in terms of suborganizations
  or subsystems decomposition
• A framework for problem solving and decision
  makingconquering
• Managers focus on overall goals and operations of
  businesssynthesizing

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Information and Managers (Cont.)

• Systems thinking (Cont.)
• Information Map data and information flow within
  an organization
• (?????)
• (key corporate resources M.I.T.)
• Information Technology all technologies that
  facilitate construction and maintenance of
  information systems
• (?????)

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The Benefits of Human-Computer Synergy
Prerequisites?

• Synergy combined resources produce output
  exceeding the sum of the outputs of the same
  resources employed separately
• Translates human thought into efficient
  processing of large amounts of data

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Trends of information systems

• Power of computers increasing prices dropping
• Increasing p/p (performance/price) ratio
• Increase in programming variety and ingenuity
• Internet access faster and more reliable
• Internet growth resulting in opportunities
• Increasing ratio of computer-literate workforce

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Components of an Information System
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The Four Stages of Data Processing

• Input Data are collected and entered into
  computer
• Data processing Data are manipulated into
  information using mathematical, statistical, and
  other tools
• Output Information is displayed or presented
• Storage Data and information are maintained for
  later use (for the 1st or 2nd order feedback loop)

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Computer Equipment for Information System

• Input devices introduce data into the IS
• Processor manipulates data through the IS
• Output devices display information
• Storage devices store data and information

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Input-process-output-storage devices
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ISs From Recording Transactionsto Providing
Expertise

• Transaction Processing Systems (TPS)
• Record data and perform basic processing
• Cash registers and ATMs
• Management Information Systems (MIS)
• Recorded transactions and other data produce
  information for problem solving and decision
  making
• Customer purchasing power analysis

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Types of MISs

• Decision Support Systems (DSS)
• Contain models, or formulas, that manipulate data
  into information
• Often answer what if? questions,
• Scenario simulation
• Group Decision Support Systems (GDSS)
• Generate ideas, establish priorities, and reach
  decisions in group environment
• A case of Delphi method

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Types of MISs (Cont.)

• Executive Information Systems (EIS)
• Can gather information from vast amounts of data
  for high-level executives
• Highly useful in control and planning
• Summarized report with highlights
• Expert Systems (ES)
• Programmed with human expertise
• Can help solve problems of unstructured nature
• Multiple criteria planning the heuristic method
  (with the 2nd order feedback loop)

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Types of MISs (Cont.)

• Geographic Information Systems (GIS)
• Represents local conditions or features
• Allows planning, decision-making, and monitoring
  of local conditions or activities
• On-demand Output
• Managers can obtain reports tailored to their
  needs at any time, or even anywhere

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ISs in Functional Business Areas

• Accounting
• Record business transactions, produce periodic
  financial statements, and create reports required
  by law
• Finance
• Organize budgets, manage the flow of cash,
  analyze investments, and make decisions that
  could reduce interest payments and increase
  revenues

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ISs in Functional Business Areas (Cont.)

• Marketing
• Analyze demand for various products in different
  regions and population groups
• Human Resources
• Help with record keeping and employee evaluation,
  training, and dispatching

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ISs in Different Business Sectors

• Manufacturing
• Allocate resources such as personnel, raw
  material, and time
• Control inventory, process customer orders,
  prepare production schedules, perform quality
  assurance, and prepare shipping documents

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ISs in Different Business Sectors (Cont.)

• Service
• ISs are often the backbone of service
  organizations
• E.g., quick response, FAQs, complain trace, etc.
• Retail
• Some retail stores (e.g., Wal-Mart, Sears) are
  now linked to communication networks by satellite
• Management can determine which items move quickly
  and which do not
• Returns arrangement

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ISs in Different Business Sectors (Cont.)
ß-version prototyping

• New Businesses
• ISs have made new products and services possible,
  such as credit reports and shipment tracking
• Interactive new product designing activities
  across multiple divisions
• Government
• Tax authorities, national insurance and welfare
  agencies, defense departments, economic
  organizations, immigration authorities

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Shared Data Resources

• Effective way to operate different systems share
  data from the same pool
• Companys database one of the most powerful
  resources, a corporate asset
• Categorized and structured data can be
  manipulated to produce useful information

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Shared Data Resources (Cont.)
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E-Commerce

• Business-to-business and business-to-consumer
  transactions done electronically via networks
• Database management online makes information
  cheaper to distribute
• E-commerce is now synonymous with doing business
  on the Internet

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Why Study IS?

• Knowledge Workers
• Employers seek computer-literate professionals
  who know how to use information technology
• Degrees in IS
• Computer Science and Management Information
  Systems
• Information Systems Careers
• Systems analyst, specialist in enterprise
  resource planning (ERP), database administrator,
  telecommunications specialist, consulting, etc.

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Ethical and Societal IssuesThe Not-So-Bright Side

• Consumer Privacy
• Organizations collect (and sometimes sell) huge
  amounts of data on individuals
• Employee Privacy
• IT supports remote monitoring of employees,
  violating privacy and creating stress

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Ethical and Societal IssuesThe Not-So-Bright
Side

• Freedom of Speech
• Opportunities increase for pornography, hate
  speech, intellectual property crime, and other
  intrusions
• Prevention may abridge free speech

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Ethical and Societal IssuesThe Not-So-Bright
Side

• IT Professionalism
• No mandatory or enforced code of ethics for IT
  professionals--unlike other professions
• Social Inequality
• Less than 20 of the worlds population have ever
  used a PC less than 3 have Internet access
• Increasing gap or not?

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Summary

• Information Systems are essential to business
• Data is processed into useful information for
  problem solving and decision making
• Information systems provide information for
  different levels within an organization
• There are major factors to consider when
  evaluating information systems