This document provides an introduction to information technology and information systems. It discusses why organizations should invest in IT solutions due to changes in business and technology. It defines key concepts like data, information, knowledge, and systems. It also describes different types of information systems like transaction processing systems, management information systems, and decision support systems. Finally, it discusses trends in IT and how IT is transforming businesses and organizations.

1. Chapter 1
Introductio
n to
Information
Technology

2. Learning Objectives
• why organization should invest in IT based solution;
• should organizations invest in networking and
processing capacity ahead of applications needs, or be
driven by the current business;
• what level of IT solutions organizations should
implement;
• major changes that needs to be addressed in terms of
organization and management;
• different level of activities being performed by various
level of managers and their information solutions
needs.
• the latest trends in Information Technology.

3. Why organization should invest in IT
based solution?
• Because the business is changing; competition
is changing; and technology is changing.
• Because of emergence of:
– Globalisation, Liberalisation and Privatisation
– Business Process Outsourcing
– Knowledge Process Outsourcing
– Digital Economy & Knowledge Economy
– Organization Level Transformation

4. Why organization should invest in IT
based solution?
• 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.
• 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.

5. What is Information Technology?
• Information Technology can be defined as
collection of computer hardware, software,
databases, networking and telecommunication
devices that helps the organisation to manage
the business process more effectively and
efficiently.
• In simple terms one may say, any technological
device that helps the organisation in managing its
processes more effectively and efficiently
qualifies to be part of IT.

6. Digital Economy
• Digital Economy is defined as economy based
on Information Technologies including
computers, internet, intranets, and extranets.
• Allows management of Digitally-enabled
relationships with Customers, Suppliers and
Employees.

7. Data, Information & Knowledge
• Data is a collection of raw facts and figures. Data is an
element of a transaction. Any transaction facts collected
about the lifestyle of credit card customers, or point of
sales or demographics and geographic are some of the
examples of data.
• Information is a collection of data (facts & figures) arranged
in more meaningful manner, which helps in decision
making.
• Knowledge is defined as the experience and expertise
acquired by an individual. Knowledge can also be defined
as level of understanding in interpreting the information
available for effective decision making purpose.

8. System
• System can be defined as group of entities
that work together to achieve a common
predefined goal.
INPUT PROCESS OUTPUT
FEEDBACK

9. Information System
• Information system is a set of procedures that
collects, process, store and disseminate
information to support decision making.
• Information systems always have a pre-
defined boundary and operate in an
environment which includes other systems
and also players like customers, suppliers and
government departments etc.

10. Information Technology vs.
Information System.
• Information Technology is a means to
Information System or they are similar to heart
and soul relationship.
• Information technology provides effective and
efficient means of storing, processing and
disseminating information.
• Information Systems provides best practices to
manage business processes. To learn about
information systems, one needs to understand
the organisation, management and technology.

11. Components of Information System
ENVIRONMENT
Organization Information System
INPUT PROCESS OUTPUT
FEEDBACK
System Boundary

12. Major Characteristics of Information
Systems
• Intrinsic
• Accessibility
• Contextual
• Representation
• Information system needs to be economical to
develop and maintain
• Information system needs to flexible and
adaptable

13. Uses of Information
• Identification
• Collection
• Controlling
• Measuring and
• Decision Making

14. Organizational Structure
• Organizations are structured in a many ways, which is
dependant on their objectives and culture.
• The structure of an organization will determine the
manner in which it operates and it’s performance.
• Structure allows the responsibilities for different
functions and processes to be clearly allocated to
different departments and employees.
• Organizational structures are created in such a way
that it aims at maximizing the efficiency and success of
the Organization.
• Common organization structures that exist are:
Hierarchical, Flat and Matrix.

15. Functions of Management
• Management is creative problem solving which can be accomplished
through four functions of management: planning, organizing, directing
and controlling.
• Planning: Planning is the ongoing process of developing the organizational
goals and objectives and determining how they will be accomplished.
• Organizing: Organizing also means to establish the internal organizational
structure of the organization. The focus is on division, coordination, and
control of tasks and the flow of information within the organization.
• Directing: Directing also means to influence staff behavior through
motivation, communication, group dynamics, leadership and discipline.
• Controlling: It is a multi stage process which includes establishing
performance standards based on the firm's objectives; evaluating and
reporting actual job performance; comparing the two, and taking
corrective or preventive action as necessary.

16. MANAGEMENT LEVELS AND
MANAGERIAL FUNCTIONS
Planning Organization Leading Control
Top Level Managers
Middle Level Managers
Lower Level Managers

17. Decision Characteristics of
Management Levels
Decisional Roles
Decision Characteristics
Unstructured
Strategic
Management
(Top Level)
In
orf
Semi-
n s
m
io
structured
at
Tactical
cis
io
Management
n
De
(Middle Level)
Structured
Operational
Management
(Lower Level)

18. Major Roles of Information Systems
Support of
Strategic
Advantage
Support of
Managerial
Decision Making
Support of
Business Operations

19. Types of Information Systems
• Transaction Processing System (TPS)
• Management Information System (MIS)
• Office Automation System (OAS)
• Decision Support System (DSS)
• Executive Support System (ESS) and
• Expert Systems (ES)

20. Characteristics of Transaction
Processing System (TPS)
• Serves the Operational Level or lower level management
• Performs & records the daily routine transactions
• Tasks, resources and goals for TPS are predefined & highly structured
• TPS captures data about the organization and its environment
• TPS are major producers of information about the organization
• TPS failure will result in failure of the organizational system
• TPS is often tied to other systems
• TPS is a main feeder of data to other information systems
• TPS serves the most elementary day-to-day activities of an organization
• It can have strategic consequences (eg railway/air reservation system)
• It usually has high volumes of input and output
• TPS systems are meant to be repetitive and predictable

21. Characteristic of Management
Information System (MIS)
• Provide managers with reports and in some cases on-line
access to the organization performance
• Serves the Management control level
• Produce summary reports generated by TPS
• Have limited analytical capabilities and use simple models
• Address structured questions that are known well in
advance
• Not very flexible
• Rely more on existing organizational data & data flows
• Generally past and present oriented
• MIS are generally reporting and control oriented
• Exception reports

22. Characteristics of Decision Support
System (DSS)
• For Semi-structured & Unstructured decisions
• For managers at different levels
• For groups and individuals
• Adaptability and flexibility
• Effectiveness, not efficiency
• Humans control the machine
• Modeling & Knowledge based

23. Characteristics of Executive Support
System (ESS)
• Serves the Strategic Level
• Address unstructured decisions and involve a
generalized computing and communication
environment rather than fixed application.
• Dependent on internal & external information
• Make less use of analytical models
• ESS are more oriented towards external events
• More graphic oriented
• What Business should we be in?
• What are the competitors doing?

24. Office Automation Systems (OAS)
• Office Automation Systems (OAS) are information
system solutions that try to improve the productivity
of employees of an organization.
• OAS objective is to create the technology driven
environment in an organization and it provides
individuals effective ways to process personal and
organisational data, perform calculations, and create
documents.
• They are used for increasing productivity and reducing
paper work by processing major work electronically.
Communication systems and groupware concepts
facilitate implementation of OAS.

25. Expert Systems (ES)
• Expert System (ES) are computer system or
program that uses artificial intelligence
techniques to solve problems that ordinarily
require a knowledgeable human.
• Expert Systems help to guide users to find
solutions to problems that would otherwise need
expert advice.
• Expert Systems are useful in diagnosing,
monitoring, selecting, designing, predicting and
training.

26. Information Technology Trends
• Information technologies are becoming the dominant force in our culture.
– Worldwide Internet Use Continues to Expand
– e-Business is Here to Stay
– Websites are a Necessary Function of Business
– Wireless Communication will Increase Significantly
– Technically Trained People will be in Demand Worldwide
• Information technologies will continue to transform the way we live and work.
– IT is Transforming How We Conduct Business
– IT is Changing How We Manufacture
– IT is Changing the Role of Consumers
– IT is Changing How We Travel and Move Goods
– IT is Transforming How Our Governments Operate
• The pace of change will accelerate.
– Nano-technology is the Next New Frontier
– Requirement for Service Oriented Architecture
– Strong Security systems like Biometric

27. Summary
• Information Technology has become integral part of life.
• Organization started investing in technology to remain competitive, individual started learning about
technology for their survival.
• Information Technology can be simply defined as collection of computing and communication tools
that help organization to manage it business processes better.
• Major reasons, why organizations started looking at IT based solutions includes, change in methods
the way we do businesses; global competition; global opportunities; introduction of concepts like
business process outsourcing; emergence of digital economy; shift towards knowledge based
economy; change in organization structure; and setting of virtual organization.
• Information play an important role in any business, it acts as glue to an organisational process.
• Information is always derived from Data, which is a collection of raw facts and figures.
• Information is a processed meaningful data that helps in decision making.
• Knowledge is a skill required to interpret the information and System is a group of entities that work
together to achieve organisational goals.
• Information System, which is important component of complete technology solution, can be defined
as a set of procedures that collects, process, store and disseminate information to support decision
making.
• Major characteristics that Information Systems needs to have include – Intrinsic, Accessibility,
Contextual, Representation, Flexible, Adaptable, and Economical.
• Organizations use Information Systems to manage its business activities and achieve business goals.
While implementing IS solutions for an organization it is important to understand the Organizational
and Management structures. An organization is a collection of people and other resources that work
together to achieve organizational goal. Organizations are similar to systems with inputs, processes
and outputs.

28. Summary
• Organizational structure determines how it operates.
• Organization structures are created on the basis of their objectives and culture. The common
structures are: Hierarchical, Flat and Matrix.
• Organizational Culture is important to understand how business processes are being managed by the
organisation. The different kinds of cultures being followed by different organisation include –
Power, Role, and Task cultures. Most common among these is the Role culture, which splits the
organization into various functions and the role is assigned within a function.
• Management function needs to be understood wherever human efforts are involved. Typically, most
organizations are divided into three management levels: top-level, middle-level and lower-level.
• The key function that these managers perform at various levels are Planning, Organizing, Directing,
and Controlling.
• Top-level managers take decision affecting entire organisation like policy formulation, middle-level
managers define action plan as per the formulated policies and the lower-level act as per the defined
action plan.
• There are six kinds of information systems which are used by different organisations at different
levels. These systems are Transaction Processing System (TPS) meant for lower-level managers,
Management Information Systems (MIS) meant for middle-level managers, Office Automation
System (OAS) helps in bringing IT culture in an organisation by introducing Office support systems,
Decision Support System (DSS) meant for senior-middle level executive for semi and un-structured
kind of decisions, Executive Support System (ESS) meant for top-level executives for strategic
decisions and Expert System (ES) are application specific intelligent systems.
• The most important challenge being faced by many organizations is to understand how to integrate
these always changing technologies into their business. Technology is evolving faster than the needs
of businesses, finding the right application in the current business is the key challenge.