2. 2
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 in business
• Describe careers in information technology
• Identify major ethical and societal concerns created by
widespread use of information technology
3. 3
The Purpose of Information Systems
• Businesses use information systems
– To make sound decisions
– To solve problems
• Problem is any undesirable situation
• Decision arises when more than one solution to
problem exists
4. 4
The Purpose of Information Systems
(continued)
• Problem solving and decision making require
information
• Keys to success in business are
– Gathering correct information
– Storing information
– Using information
5. 5
Data, Information, and Information
Systems
• “Data”, “information” and “system” are commonly
used terms
• Important to understand their similarities and
differences
6. 6
Data vs. Information
• Data: a given or fact
– Can be number, statement, or picture
• Information: facts or conclusions that have
meaning within context
– Composed of data that is manipulated
7. 7
Data Manipulation
• Data is manipulated to make useful information
• Survey is common method of collecting data
• Raw data is hard to read
• Information is more useful to business than data
8. 8
Generating Information
• A process is manipulation of data
• Process usually produces information
• Process may produce more data
• A piece of information in one context may be
considered data in another context
13. 13
What Is a System?
• System: array of components that work together
to achieve goal or goals
• System
– Accepts input
– Processes input
– Produces output
14. 14
What is a system? (continued)
• System may have multiple goals
• System may contain subsystems
• Subsystems have sub-goals that meet main goal
• Subsystems transfer output to other subsystems
15. 15
What is a system? (continued)
• Closed system: has no connections with other
systems
• Open system: interfaces and interacts with
other systems
– Often a subsystem of a bigger system
• Information system: processes data and
produces information
16. 16
Information and Managers
• Systems thinking: thinking of an organization in
terms of subsystems
• Database: collection of electronic records
• Information systems automate exchange among
subsystems
• Information map: network of information
systems
• Information technology: technologies that
facilitate construction and maintenance of
information systems
17. 17
The Benefits of Human-Computer
Synergy
• Humans are relatively slow and make mistakes
• Computers cannot make decisions
• Synergy: combining resources to produce
greater output
18. 18
The Benefits of Human-Computer
Synergy (Continued)
Figure 1.4: Qualities of humans and computers that contribute to synergy
19. 19
Information Systems in Organizations
• Computer-based Information system: system
with computer at center
• Certain trends have made information systems
important in business
• Organizations lag behind if they do not use
information systems
21. 21
The Four Stages of Processing
• Input: collect and introduce data to system
– Transaction: a business event, usually entered
as input
• Data processing: perform calculations on input
• Output: what is produced by the information
system
• Storage: vast amounts of data stored on optical
discs
22. 22
Computer Equipment for Information
Systems
• Input devices: receive input
• Computer: process data
• Output: displays information
• Storage devices: store data
• Network devices: transfer data
23. 23
Computer Equipment for Information
Systems (continued)
Figure 1.6: Input, process, output, storage, and networking devices
24. 24
From Recording Transactions to
Providing Expertise: Types of
Information Systems
• Many types of information systems
• Capabilities of applications have been combined
and merged
• Management Information System: supports
planning, control, and making decisions
25. 25
Transaction Processing Systems
• Most widely used type of system
• Records data collected at point where
organization interacts with other parties
• Encompasses cash registers, ATMs and
purchase order systems
26. 26
Supply Chain Management Systems
• Supply chain: sequence of activities involved in
producing products
– Activities include marketing, purchasing raw
materials, manufacturing, shipping, billing, collecti
on, and after-sale services
27. 27
Customer Relationship Management
Systems
• Customer relationship management:
managing relations with customers
– Used in combination with telephones to provide
customer service
– Often linked to Web applications that track online
transactions
28. 28
Business Intelligence Systems
• Business Intelligence: gather data to help
organization compete
– Often contains statistical models
– Access large pools of data
• Data warehouse: large database that usually
store transactional records
29. 29
Decision Support and Expert Systems
• Decision support system: supports decision-
making
– Relies on models to produce tables
– Extrapolates data to predict outcomes
• Expert system: supports knowledge-intensive
decision-making
– Uses artificial intelligence
30. 30
Geographic Information Systems
• Geographic information system: ties data to
physical locations
• Represents data on a map in different formats
• May reflect demographic information in addition
to geographic
• May use information from GPS satellites
32. 32
Information Systems in Business
Functions
• Functional business area: services within a
company that support main business
– Includes accounting, finance, marketing, and
human resources
– Part of a larger enterprise system
33. 33
Accounting
• Information systems help record transactions
• Produce periodic statements
• Create required reports for law
• Create supplemental reports for managers
34. 34
Finance
• Finance systems facilitate financial planning and
business transactions
• Tasks include organizing budgets, managing
cash flow, analyzing investments, and making
decisions
35. 35
Marketing
• Pinpoint likely customers and promote products
• Marketing information systems analyze demand
for products in regions and demographic groups
– Identify trends in demand for products/services
• Web provides opportunity to collect marketing
data
36. 36
Human Resources
• Human resource management systems aid
record-keeping
– Must keep accurate records
– Aids recruiting, selection, placement, and reward
analysis
• Performance evaluation systems provide
grading utilities
37. 37
Web Empowered Enterprises
• E-commerce: Buying and selling goods and
services through Internet
• Internet is a vast network of computers
connected globally
• Web has a profound impact on information
systems
38. 38
Careers in Information Systems
• Information technology professionals are
increasingly in demand
• Networking, system analyst, software
engineering, and database administrator jobs
are increasing in demand
39. 39
Systems Analyst
• System analyst: designs and updates
information systems
• Involves analyzing system
requirements, documenting development
efforts, and providing specifications for
programmers
• Requires communication and presentation skills
40. 40
Database Administrator
• Database administrator: responsible for
databases
– Develops and acquires database applications
– Must protect privacy of customers and employees
– Responsible for securing the database
42. 42
Webmaster
• Webmaster: creates and maintains Web site
• Designs and codes the page
• Demand for Webmasters grows as more
businesses use Web
43. 43
Chief Security Officer
• Chief security officer: supervises security of
information system
• Position exists due to growing threat to
information security
• Reports to chief information officer
44. 44
Chief Information Officer and Chief
Technology Officer
• Chief information officer: responsible for all
aspects of information system
– Often the vice president
• Chief technology officer: has similar duties as
CIO
46. 46
Summary
• Computer-based information systems pervade
almost every aspect of our lives
• A system is a set of components that work
together to achieve a common goal
• Subsystem: a system performs a limited task
that produces an end result, which must be
combined with other products from other
systems to reach an ultimate goal
• Data processing has four stages
47. 47
Summary (continued)
• Any IS that helps in management is a
management information system (MIS)
• Many different types of MIS
• Enterprise application systems (SCM or ERP) tie
together different functional areas of a business
• ISs are used in
accounting, finance, marketing, and human
resources
