16118570 ch1-foundations-of-it-systems-in-business

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  • 1. Chapter 1 Foundations of Information Systems in Business James A. O'Brien, and George Marakas. Management Information Systems with MISource 2007, 8 th ed.  Boston, MA: McGraw-Hill, Inc., 2007.  ISBN: 13 9780073323091
  • 2.
    • Understand the concept of a system and how it relates to IS
    • Explain why knowledge of IS is important for business professionals; Identify five areas of Is knowledge needed
    • Give examples to illustrate how business applications of IS can support a firm’s business processes, managerial decision making, and strategies for competitive advantage
    • Provide examples of IS from your experiences with business organizations in the real world
    • Identify challenges that a business manager might face in managing the successful, ethical development and use of information technology
    • Provide examples of the components of real world IS
    • Become familiar with the myriad of career opportunities in IS
    Learning Objectives Chapter 1 Foundations of Information Systems in Business
  • 3. Foundation Concepts
    • Why study information systems and information technology?
      • Vital component of successful businesses
      • Helps businesses expand and compete
      • Improves efficiency and effectiveness of business processes
      • Facilitates managerial decision making and workgroup collaboration
    Chapter 1 Foundations of Information Systems in Business
  • 4. Case 1 Heidelberg, Honeywell, Eaton
    • Smart services, smart products
      • Using information technology to monitor, intervene, assist
    • Machines relay information via the Internet and wireless systems
      • Optimized performance
      • Minimized maintenance and repair costs
      • Less unanticipated downtime
    • Increased value justifies premium charge
    Chapter 1 Foundations of Information Systems in Business
  • 5. Case Study Questions
    • Why should manufacturing companies build smart products and provide smart services?
      • What business benefits can be gained?
      • Provide examples beyond those discussed in this case
    • What information technologies are used by the companies in this case to build smart products and provide smart services?
      • What other IT components might be used?
      • Give examples of the capabilities they would provide
    • What are some limitations of a smart products and smart services strategy?
      • Give several examples that a business might encounter
      • Explain how it might overcome them
    Chapter 1 Foundations of Information Systems in Business
  • 6. What is a System?
    • A set of interrelated components
    • With a clearly defined boundary
    • Working together
    • To achieve a common set of objectives
    Chapter 1 Foundations of Information Systems in Business
  • 7. 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 disseminates information in an organization
    Chapter 1 Foundations of Information Systems in Business
  • 8. Information Technologies
    • Information Systems
      • All the components and resources necessary to deliver information and functions to the organization
      • Could be paper based
    • Information Technologies
      • Hardware, software, networking, data management
    • Our focus will be on computer-based information systems (CBIS)
    Chapter 1 Foundations of Information Systems in Business
  • 9. What Should Business Professionals Know? Chapter 1 Foundations of Information Systems in Business
  • 10. Fundamental Roles of IS in Business Chapter 1 Foundations of Information Systems in Business
  • 11. Trends in Information Systems Chapter 1 Foundations of Information Systems in Business
  • 12. What is E-Business?
    • Using Internet technologies to empower…
      • Business processes
      • Electronic commerce
      • Collaboration within a company
      • Collaboration with customers, suppliers, and other business stakeholders
    • In essence, an online exchange of value
    Chapter 1 Foundations of Information Systems in Business
  • 13. How E-Business is Being Used Chapter 1 Foundations of Information Systems in Business
  • 14. E-Business Use
    • Reengineering
      • Internal business processes
    • Enterprise collaboration systems
      • Support communications, coordination and coordination among teams and work groups
    • Electronic commerce
      • Buying, selling, marketing, and servicing of products and services over networks
    Chapter 1 Foundations of Information Systems in Business
  • 15. 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 managers during decision-making
    Chapter 1 Foundations of Information Systems in Business
  • 16. Purposes of Information Systems Chapter 1 Foundations of Information Systems in Business
  • 17. Operations Support Systems
    • What do they do?
      • Efficiently process business transactions
      • Control industrial processes
      • Support communications and collaboration
      • Update corporate databases
    Chapter 1 Foundations of Information Systems in Business
  • 18. Types of OSS
    • Transaction Processing Systems
      • Record and process business transactions
      • Example: 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
      • Example: email, video conferencing
    Chapter 1 Foundations of Information Systems in Business
  • 19. Two Ways to Process Transactions
    • Batch Processing
      • Accumulate transactions over time and process periodically
      • Example: a bank processes all checks received in a batch at night
    • Online Processing
      • Process transactions immediately
      • Example: a bank processes an ATM withdrawal immediately
    Chapter 1 Foundations of Information Systems in Business
  • 20. Management Support Systems
    • What do they do?
      • Provide information and support for effective decision making by managers
        • Management information systems
        • Decision support systems
        • Executive information systems
    Chapter 1 Foundations of Information Systems in Business
  • 21. 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 determine where to spend advertising dollars
    • Executive Information Systems (EIS)
      • Critical information for executives and managers
      • Example: easy access to actions of competitors
    Chapter 1 Foundations of Information Systems in Business
  • 22. Other Information Systems
    • Expert Systems - provide expert advice
      • Example: credit application advisor
    • Knowledge Management Systems - support creation, organization, and dissemination of business knowledge throughout company
      • Example: intranet access to best business practices
    • Strategic Information Systems - help get a strategic advantage over customer
      • Example: shipment tracking, e-commerce Web systems
    • Functional Business Systems - focus on operational and managerial applications of basic business functions
      • Example: accounting, finance, or marketing
    Chapter 1 Foundations of Information Systems in Business
  • 23. IT Challenges and Opportunities Chapter 1 Foundations of Information Systems in Business
  • 24. Measuring IT Success
    • Efficiency
      • Minimize cost, time, and use of information resources
    • Effectiveness
      • Support business strategies
      • Enable business processes
      • Enhance organizational structure and culture
      • Increase customer and business value
    Chapter 1 Foundations of Information Systems in Business
  • 25. Developing IS Solutions Chapter 1 Foundations of Information Systems in Business
  • 26. Challenges and Ethics of IT
    • Application of IT
      • Customer relationship management
      • Human resources management
      • Business intelligence systems
    • Potential Harm
      • Infringements on privacy
      • Inaccurate information
      • Collusion
    • Potential Risks
      • Consumer boycotts
      • Work stoppages
      • Government intervention
    • Possible Responses
      • Codes of ethics
      • Incentives
      • Certification
    Chapter 1 Foundations of Information Systems in Business
  • 27. Ethical Responsibilities
    • What uses of IT might be considered improper or harmful to other individuals or society?
    • What is the proper business use of the Internet or a company’s IT resources?
    • How can you protect yourself from computer crime?
    Chapter 1 Foundations of Information Systems in Business
  • 28. IT Careers
    • Economic downturns have affected all job sectors, including IT
    • Rising labor costs are pushing jobs to India, the Middle East, and Asia-Pacific countries
    • However, IT employment opportunities are strong, with new jobs emerging daily
    • Shortages of IT personnel are frequent
    • The long-term job outlook is positive and exciting
    • Figure
    Chapter 1 Foundations of Information Systems in Business
  • 29. IT Careers Chapter 1 Foundations of Information Systems in Business
  • 30. IT Careers
    • Job increases will be driven by…
      • Rapid growth in computer system design and related services
      • The need to backfill positions
      • Information sharing and client/server environments
      • The need for those with problem-solving skills
      • Falling hardware and software prices, which will fuel expanded computerization of operations
    Chapter 1 Foundations of Information Systems in Business
  • 31. The IS Function
    • The IS function is…
      • A major functional area of business
      • An important contributor to operational efficiency, employee productivity, morale, customer service and satisfaction
      • A major source of information and support for decision making
      • A vital ingredient in developing competitive products and services in the global marketplace
      • A dynamic and challenging career opportunity
      • A key component of today’s networked business
    Chapter 1 Foundations of Information Systems in Business
  • 32. 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 use information technology includes designing the basic components of information systems
      • Management : emphasizes the quality, strategic business value, and security of an organization’s information systems
    Chapter 1 Foundations of Information Systems in Business
  • 33. Real World Case: Lufthansa
    • Lufthansa wants to…
      • Keep 3,500 pilots
        • Trained on the latest technology and procedures
        • Plugged into the corporate infrastructure
        • Informed about schedules, weather events, and other facts that affect their jobs
      • Control costs
      • Provide Internet access to passengers
    Chapter 1 Foundations of Information Systems in Business
  • 34. Case Study Questions
    • Are many of Lufthansa’s challenges identified in the case similar to those being experienced by other businesses in today’s global economy?
    • What other tangible and intangible benefits, beyond those identified by Lufthansa, might a mobile workforce enjoy as a result of deploying mobile technologies?
    • Lufthansa was clearly taking a big risk with their decision to deploy notebook computers to their pilots. What steps did they take to manage the risk, and what others might be needed in today’s business environment?
    Chapter 1 Foundations of Information Systems in Business
  • 35. 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 producing outputs
      • In an organized transformation process
    Chapter 1 Foundations of Information Systems in Business
  • 36. Basic Functions of a System
    • Input
      • Capturing and assembling elements that enter the system to be processed
    • Processing
      • Transformation process that converts input into output
    • Output
      • Transferring transformed elements to their ultimate destination
    Chapter 1 Foundations of Information Systems in Business
  • 37. Cybernetic System
    • All systems have input , processing , and output
    • A cybernetic system , a self-monitoring, self-regulating system, adds feedback and control:
      • Feedback is data about the performance of a system
      • Control involves monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal
    Chapter 1 Foundations of Information Systems in Business
  • 38. A Business as a System Chapter 1 Foundations of Information Systems in Business
  • 39. Other System Characteristics
    • If a system is one of the components of a larger system, it is a subsystem
      • The larger system is an environment
    • Several systems may share the same environment
      • Some may be connected via a shared boundary, or interface
    • Types of systems…
      • Open
      • Adaptive
    Chapter 1 Foundations of Information Systems in Business
  • 40. Components of an IS Chapter 1 Foundations of Information Systems in Business
  • 41. Information System Resources
    • People Resources
      • Specialists
      • End users
    • Hardware Resources
      • Machines
      • Media
    • Software Resources
      • Programs
      • Procedures
    • Data Resources
      • Product descriptions, customer records, employee files, inventory databases
    • Network Resources
      • Communications media, communications processors, network access and control software
    • Information Resources
      • Management reports and business documents using text and graphics displays, audio responses, and paper forms
    Chapter 1 Foundations of Information Systems in Business
  • 42. Data Versus Information
    • Data are raw facts about physical phenomena or business transactions
    • Information is data that has been converted into meaningful and useful context for end users
    • Example:
      • Sales data is names, quantities, and dollar amounts
      • Sales information is amount of sales by product type, sales territory, or salesperson
    Chapter 1 Foundations of Information Systems in Business
  • 43. 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
    Chapter 1 Foundations of Information Systems in Business
  • 44. Recognizing IS
    • Business professionals should be able to look at an information system and 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
    Chapter 1 Foundations of Information Systems in Business
  • 45. Case 3 Aviall, Inc.
    • Supplier of airplane parts and components
    • Had lost track of its inventory
      • Price-tracking software didn’t work with inventory control or purchasing forecasting
      • Sent wrong parts to wrong customers
      • Sales falling
    • Needed a middleware vision
      • Get all the software to work together
    Chapter 1 Foundations of Information Systems in Business
  • 46. Case Study Questions
    • Why do you think that Aviall failed in their implementation of an airplane parts and components inventory control system?
    • How has information technology brought new business success to Aviall? How did IT change Aviall’s business model?
    • How could other companies use Aviall’s approach to the use of IT to improve their business success?
    Chapter 1 Foundations of Information Systems in Business
  • 47. Case 4 Continental Airlines
    • Building customer loyalty has become crucial for success in the airline industry
    • Continental employs CallMinder systems to…
      • Monitor calls and keystrokes
      • Data mine keystrokes and voice calls
    • This technology resulted in…
      • Fewer calls going to the help desk
      • Higher customer satisfaction
      • Reduction of flight confirmation calls
      • Cost savings in excess of $1 million
    Chapter 1 Foundations of Information Systems in Business
  • 48. Case Questions
    • What are the business benefits of the CallMiner system?
    • How can new technologies like CallMiner help companies improve their customer service and gain a competitive edge in the marketplace?
    • Andre Harris refers to calls to reconfirm a flight as “quite frankly, low-value calls.” Why are they classified as low value? Why do you think so many customers are placing such calls?
    Chapter 1 Foundations of Information Systems in Business