The document discusses the foundations of information systems in business. It covers several key topics: - The importance of studying information systems for business professionals and five key areas of knowledge. - Examples of how information systems can support business processes, decision making, and competitive advantage. - Types of information systems like transaction processing systems, decision support systems, and enterprise collaboration systems. - Challenges of managing information technology successfully and ethically in business.

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2. Chapter
1
Foundations of
Information Systems
in Business
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3. Learning Objectives
1. Explain why knowledge of information systems
is important for business professionals and
identify five areas of information systems
knowledge they need.
2. 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.
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4. Learning Objectives
3. Provide examples of several major types
of information systems from your
experiences with business organizations
in the real world.
4. 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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5. Learning Objectives
5. 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.
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6. Why Study Information Systems?
• Information technology can help all kinds
of businesses improve the efficiency and
effectiveness of their business processes,
managerial decision making, and
workgroup collaboration, thus
strengthening their competitive positions
in a rapidly changing marketplace.
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7. Why Study Information Systems
• Internet-based systems have become a
necessary ingredient for business
success in today’s dynamic global
environment.
• Information technologies are playing an
expanding role in business.
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8. Case #1: Athens Olympics Network
• What makes the Olympic Games a
unique project is that the athletes aren’t
going to stop running just because the
server does.
• Major Components:
• Games Management System (GMS)
• Information Diffusion System (IDS)
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9. Case #1: Athens Olympics Network
GMS:
• Managed access accreditations for the games
IDS:
• Collected and distributed event results and
rankings to press agencies and certain websites
• Live feed for broadcasters commenting on
events
• Results, rankings, statistics and biographies
available to commentators .3 seconds after the
athletes crossed the line
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10. Case #1: Athens Olympics Network
Goals & Constraints:
• Reduce the amount of risk
• 100% availability
• Non-negotiable deadline
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11. Case #1: Athens Olympics Network
Fail-Safe Plan:
• Redundancy
• Constructed the network in such a way that
service could be provided even if one of the
routers was damaged.
• Stored data in two physically distant data
centers (in different earthquake zones).
• Test. Test. Test. “We wanted to be sure
that every stupid thing that can happen
was planned for.”
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12. Case #1: Athens Olympics Network
1. Could the 2004 Athens Olympics have been a
success without all of the networks and
backup technologies?
2. How would your 2004 Olympics experience
changed without the GMS and IDS systems?
3. The 2004 Olympics is a global business. Can
a business today succeed without information
technology? Why or why not?
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13. Case #1: Athens Olympics Network
4. Claude Philipps said dealing with the
“crazy scenarios of what might happen
in every area: a network problem, staff
stopped in a traffic jam, a security
attack… everything that might happen,”
was the reason for so much testing.
Can you think of other businesses that
would require “crazy scenario” testing?
Explain.
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14. Case #1: Athens Olympics Network
5. Are the redundancies and backup
systems in place limited to one-time
systems like those at the Olympics or
should they exist in other business
environments? Explain your position
and provide specific examples.
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15. What is an Information System?
Any organized combination of people,
hardware, software, communications
networks, and data resources that stores,
retrieves, transforms, and disseminates
information in an organization.
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16. Information Systems vs.
Information Technology
• Information Systems (IS) – all
components and resources necessary to
deliver information and information
processing functions to the organization
• Information Technology (IT) – various
hardware components necessary for the
system to operate
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17. Types of Information Technologies
• Computer Hardware Technologies
including microcomputers, midsize servers, and large
mainframe systems, and the input, output, and storage
devices that support them
• Computer Software Technologies
including operating system software, Web browsers,
software productivity suites, and software for business
applications like customer relationship management and
supply chain management
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18. Types of Information Technologies
• Telecommunications Network
Technologies
including the telecommunications media, processors,
and software needed to provide wire-based and wireless
access and support for the Internet and private Internet-
based networks
• Data Resource Management
Technologies
including database management system software for
the development, access, and maintenance of the
databases of an organization
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19. Conceptual Framework of IS Knowledge
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20. Roles of IS in Business
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21. Trends in Information Systems
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22. What is E-Business?
Definition:
• The use of Internet technologies to work
and empower business processes,
electronic commerce, and enterprise
collaboration within a company and with
its customers, suppliers, and other
business stakeholders.
• An online exchange of value.
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23. E-Business Information Technology
Infrastructure
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24. Enterprise Collaboration Systems
Definition:
• Involve the use of software tools to
support communication, coordination, and
collaboration among the members of
networked teams and workgroups.
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25. What is E-Commerce?
Definition:
The buying and selling, and marketing
and servicing of products, services, and
information over a variety of computer
networks.
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26. Types of Information Systems
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27. Operation Support Systems
Definition:
• Information systems that process data
generated by and used in business
operations
• Goal is to efficiently process business
transactions, control industrial processes,
support enterprise communications and
collaboration, and update corporate
databases
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28. Examples of Operations Support Systems
• Transaction Processing Systems (TPS) –
process data resulting from business
transactions, update operational databases, and
produce business documents.
• Process Control Systems (PCS) – monitor and
control industrial processes.
• Enterprise Collaboration Systems – support
team, workgroup, and enterprise
communications an collaboration.
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29. A Transaction Processing System Example
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30. Management Support Systems
Definition:
• Information systems that focus on
providing information and support for
effective decision making by managers
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31. Management Support Systems
• Management Information Systems (MIS) –
provide information in the form of pre-specified
reports and displays to support business
decision making.
• Decision Support Systems (DSS) – provide
interactive ad hoc support for the decision
making processes of managers and other
business professionals.
• Executive Information Systems (EIS) – provide
critical information from MIS, DSS, and other
sources tailored to the information needs of
executives.
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32. A Decision Support System Example
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33. Operational & Managerial IS
• Expert Systems – provide expert advice
for operational chores or managerial
decisions
• Knowledge Management Systems –
support the creation, organization, and
dissemination of business knowledge to
employees and managers
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34. IS Classifications by Scope
• Functional Business Systems – support basic
business functions
• Strategic Information Systems – support
processes that provide a firm with strategic
products, services, and capabilities for
competitive advantage
• Cross-functional Information Systems –
integrated combinations of information systems
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35. Management Challenges & Opportunities
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36. Measures of Success
• Efficiency
• Minimize costs
• Minimize time
• Minimize the use of information resources
• Effectiveness
• Support an organization’s business strategies
• Enable its business processes
• Enhance its organizational structure and culture
• Increase the customer business value of the
enterprise
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37. Developing IS Solutions
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38. The Systems Development Lifecycle
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39. Ethical Challenges of IT
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40. IT Career Trends
• Rising labor costs have resulting in large-scale
movement to outsource programming functions to India,
the Middle East and Asia-Pacific countries.
• More new and exciting jobs emerge each day as
organizations continue to expand their wide-scale use of
IT.
• Frequent shortages of qualified information systems
personnel.
• Constantly changing job requirements due to dynamic
developments in business and IT ensure long-term job
outlook in IT remains positive and exciting.
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41. The IS Function represents…
• A major functional area of business
equally as important to business success
as the functions of accounting, finance,
operations management, marketing, and
human resource management.
• An important contributor to operational
efficiency, employee productivity and
morale, and customer service and
satisfaction.
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42. The IS Function represents…
• A major source of information and support
needed to promote effective decision
making by managers and business
professionals.
• A vital ingredient in developing
competitive products and services that
give an organization a strategic
advantage in global marketplace.
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43. The IS Function represents…
• A dynamic, rewarding, and challenging
career opportunity for millions of men and
women.
• A key component of the resources,
infrastructure, and capabilities of today’s
networked business enterprise.
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44. Case #2: Connecting the Mobile Workforce
Goals:
• Keep 3,500 highly mobile airline 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
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45. Case #2: Connecting the Mobile Workforce
Productivity and Efficiency Improvements:
• Pilots can access updated data electronically.
• Pilots can work in a variety of locations including
airplanes, airports, hotels, and other remote
locations.
• Pilots appreciate the convenience of not having
to carry heavy manuals and documentation to
multiple locations.
• Pilots can take their required training on their
laptops during downtime in any airport.
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46. Case #2: Connecting the Mobile Workforce
1. Are many of Lufthansa’s challenges
identified in the case similar to those
being experienced by other businesses
in today’s global economy? Explain and
provide some examples.
2. What other tangible and intangible
benefits, beyond those identified by
Lufthansa, might a mobile workforce
enjoy as a result of deploying mobile
technologies? Explain.
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47. Case #2: Connecting the Mobile Workforce
3. Lufthansa was clearly taking a big risk
with their decision to deploy notebook
computers to their pilots. What steps did
they take to manage that risk and what
others might be needed in today’s
business environment? Provide some
examples.
4. How might mobile computing improve
your productivity and efficiency?
Provide some examples.
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48. Case #2: Connecting the Mobile Workforce
5. What challenges in pilot morale,
performance, and management might
arise with the use of mobile computing
devices in the field and in the cockpit?
What preventive actions or solutions to
these potential problem areas could you
suggest?
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49. What is a System?
Definition:
A group of interrelated components, with
a clearly defined boundary, working
together toward a common goal by
accepting inputs and producing outputs in
an organized transformation process.
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50. System Components
• Input – capturing and assembling
elements that enter the system to be
processed
• Processing – transformation steps that
convert input into output
• Output – transferring elements that have
been produced by a transformation
process to their ultimate destination
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51. Cybernetic Systems
Definition:
a self-monitoring, self-regulating system.
• Feedback – data about the performance
of a system
• Control – monitoring and evaluating
feedback to determine whether a system
is moving toward the achievement of its
goal
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52. Example of a Cybernetic System
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53. A Business System
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54. IS Resources & Activities
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55. Information System Resources
• People – end users and IS specialists
• Hardware – physical devices and
materials used in information processing
including computer systems, peripherals,
and media
• Software – sets of information processing
instructions including system software,
application software and procedures
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56. Information Systems Resources (con’t)
• Data – facts or observations about
physical phenomena or business
transactions
• Network – communications media and
network infrastructure
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57. Data vs. Information
• Data – raw facts or observations typically
about physical phenomena or business
transactions
• Information – data that have been
converted into a meaningful and useful
context for specific end users
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58. Network Resources
• Communications Media – examples
include twisted-pair wire, coaxial and
fiber-optic cables, microwave, cellular,
and satellite wireless technologies
• Network Infrastructure – examples include
communications processors such as
modems and internetwork processors,
and communications control software
such as network operating systems and
Internet browser packages.
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59. Information Systems Activities
• Input of Data Resources
• Processing of Data into Information
• Output of Information Products
• Storage of Data Resources
• Control of System Performance
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60. Recognizing Information Systems
Fundamental Components of IS
• People, hardware, software, data and
network resources used
• Types of information products produced
• Input, processing, output, storage and
control activities performed
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61. Case #3: Failure to Success with IT
Aviall on the Ropes:
• A failed enterprise resource planning system
that had been designed to automate and
integrate the company’s order processing,
inventory control, financial accounting, and
human resources business systems
• Couldn’t properly order or ship items to
customers
• Quarterly sales dropping
• Airline industry shrinking
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62. Case #3: Failure to Success with IT
Goals:
• Save Aviall from financial disaster
• Turn Aviall from a catalog business into a
full-scale logistics business that hundreds
of aviation parts manufacturers and
airlines could depend on for ordering,
inventory control, and demand forecasting
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63. Case #3: Failure to Success with IT
Challenges:
• Integrate five Web-enabled e-business
software systems from different software
providers
• Customized pricing for 17,000 customers
who receive various types of discounts
• 380,000 different aerospace parts
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64. Case #3: Failure to Success with IT
Benefits of Aviall.com:
• Customer order obtained via web costs only 39
cents compared with $9 for an order taken via
telephone
• Sales force freed from routine order taking can
devote more time to developing relationships
with customers
• Customers have the ability to transfer orders
from an Excel spreadsheet directly to website
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65. Case #3: Failure to Success with IT
Benefits of Aviall.com (con’t):
• Customers can receive pricing and availability
information on parts within 5 seconds
• Helps build relationships with suppliers by
providing them with customer ordering data that
enables them to better match production with
demand
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66. Case #3: Aviall Inc.
1. Why do you think that Aviall failed in their
implementation of an enterprise resource
planning system? What could they have done
differently?
2. How has information technology brought new
business success to Aviall? How did IT
change Aviall’s business model?
3. How could other companies use Aviall’s
approach to the use of IT to improve their
business success? Give several examples.
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67. Case #4: This Call is Being Monitored
Goals:
• Increase customer loyalty
• Reduce number of calls forwarded to
internal help desk
• Improve decision making
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68. Case #4: This Call is Being Monitored
Witness Systems Call-center Software &
CallMiner:
• Records conversations
• Captures keystrokes
• Tracks caller choices
• Transcribes conversations into text
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69. Case #4: This Call is Being Monitored
Benefits:
• Revenues increased 60%
• 20% fewer calls sent to help desk saving
$1 million
• Customer satisfaction rose 10%
• E-ticket sales increased 8%
• Reduced staffing needs
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70. Case #4: This Call is Being Monitored
1. What are the business benefits of the CallMiner
system? Provide some additional examples beyond
those discussed in the case.
2. How can new technologies like CallMiner help
companies improve their customer service and gain a
competitive edge in the marketplace? Explain.
3. 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?
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71. Summary
• There is no longer a distinction between
an IT project and a business initiative.
• Information systems are an important
contributor to operational efficiency,
employee productivity and morale, and
customer service and satisfaction.
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72. Summary
• Information systems are a major source of
information and support needed to
promote effective decision making by
managers and business professionals.
• Information systems can be categorized
based on their intended purpose.
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73. Summary
• Managing and using information systems
can pose several challenges including the
development process and ethical
responsibilities.
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74. Chapter
1
End of Chapter
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