The document provides an overview of information systems (IS) in business, defining IS as organized combinations of people, hardware, software, communications networks, and data that manage information within organizations. It describes various types of information systems, including operational support systems and management support systems, highlighting their roles in processing transactions and aiding decision-making. Additionally, it discusses system components such as input, processing, output, and the distinction between data and information.

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Foundations of
Information Systems
in Business
Chapter
1

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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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Roles of IS in Business

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Types of Information Systems

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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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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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A Transaction Processing System Example

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Management Support Systems
Definition:
• Information systems that focus on
providing information and support for
effective decision making by managers

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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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A Decision Support System Example

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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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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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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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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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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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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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A Business System

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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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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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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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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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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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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