CHAPTER 1_INTRO TO INFORMATION SYSTEM.pptx

LOGO
CHAPTER 1: INTRODUCTION
TO INFORMATION SYSTEM

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www.themegallery.com
LEARNING OBJECTIVES
Explain what an information system is and
describe the functions of an information system.
1
Identify the components of an information
system.
2
List several types of information systems and
give an example of each.
3
Explain who information systems users are and
describe how users use the information system.
4

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LEARNING OBJECTIVES
5
6
7
Explain what ethics are and why it is important to
use information systems ethically.
.
Describe how users are connected to information
technology locally, nationally, and internationally.
Describe several benefits of information systems.

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WHAT IS AN INFORMATION SYSTEM?
 An integrated set of components for collecting, storing, and
processing data and for providing information, knowledge, and
digital products.
 Business firms and other organizations rely on information
systems to carry out and manage their operations, interact with
their customers and suppliers, and compete in the marketplace.
 Information systems are used to run interorganizational supply
chains and electronic markets.

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WHAT IS AN INFORMATION SYSTEM?
 Many major companies are built entirely
around information systems.
 These include eBay, a largely auction
marketplace; Amazon, an expanding
electronic mall and provider of cloud
computing services; Alibaba, a business-to-
business e-marketplace; and Google, a
search engine company that derives most of
its revenue from keyword advertising on
Internet searches.

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COMPUTER APPLICATION / APP
 Application Software allows users to create letters, reports, and
other documents; develop multimedia presentations; design
Web pages and diagrams; draw images; enhance audio and
video clips; prepare taxes; play games; compose e-mail
messages and instant messages; and much more.
 An App, a type of software that can be installed and run on a
computer, tablet, smartphone or other electronic devices. An
app most frequently refers to a mobile application or a piece of
software that is installed and used on a computer.
 For example, using computers to prepare written documents, to
project revenues and expenses, and to keep track of customers
name and addresses.

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COMPUTER APPLICATION/ APP
Application software consists of programs designed to make
users more productive and/or assist them with personal tasks.
Application software has a variety of uses:
1. To make business activities more efficient
2. To assist with graphics and multimedia projects
3. To support home, personal, and educational tasks
4. To facilitate communications

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EXAMPLES OF INFORMATION SYSTEMS
a. An inventory control system
b. An order entry system
c. A production scheduling system

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AN INVENTORY CONTROL SYSTEM
 Inventory: stock of goods that a business has on hand.
 For example, in a shoe store, it is the stock of shoes that the
store has. Each style of shoes that the store has stocks is
called an item in the store’s inventory.
 An inventory control system keeps track of information about
the items that the business stocks.
 The quantity of each item that the business has on hand is an
example of the information it tracks.
Point of sales (POS System)

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AN ORDER ENTRY SYSTEM
 Customers place orders that include the customer’s name, the
descriptions of the items ordered, and the quantity of each item
ordered.
 This information is entered into an order entry system which
keeps track of the orders from customers.
 The order entry system provides information to employees
about orders to be filled.

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AN ORDER ENTRY SYSTEM
 If there is adequate stock in the warehouse, the items will be
shipped to customers immediately.
 If the items are not available, check the items with the
manufacturer to determine when they will be delivered.

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A PRODUCTION SCHEDULING SYSTEM
 Production scheduling involves determining what items the
manufacturer should produce at what times.
 One factor that affects the production schedule is the demand
for different items which can vary over time.
 For example, the demand for basketball shoes increases just
before and during basketball season, and the demand for
running shoes increases during the summer Olympic Games.

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A PRODUCTION SCHEDULING SYSTEM
 Another factor is the production facility’s capacity. Production
scheduling systems assists in the operations and management
of the business.
 The system provides information about what to produce at
what times, and the production facility uses this information in
its operations.
 The system also helps management plan for production. If for
example the production facility is not adequate to meet the
required production needs, management can determine
whether new facilities should be built.

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INFORMATION SYSTEM FUNCTIONS
 An information system accepts facts from outside the system,
stores and processes the facts, and produces the results of
processing for use outside the system.
 These activities are performed by four functions of an
information system:

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INFORMATION SYSTEM FUNCTIONS
a. Input Function accepts the input data from outside the
system.
b. Storage Function retains input data and retrieves stored data.
c. Processing Function calculates and in other ways
manipulates the input and stored data.
d. Output Function produces results of processing for use
outside the system.

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THE FUNCTIONS OF AN INFORMATION
SYSTEM
INPUT FUNCTION
PROCESSING
FUNCTION
STORAGE
FUNCTION
OUTPUT
FUNCTION
INPUT DATA
INFORMATION
(Output data)
STORED
DATA

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THE FUNCTIONS OF AN INVENTORY
CONTROL SYSTEM
INPUT
FUNCTION:
Accept input data
from outside the
system
PROCESSING
FUNCTION:
Adjust inventory
quantities for
changes in
inventory
STORAGE
FUNCTION:
Keep track of
inventory quantities
OUTPUT
FUNCTION:
Produce
information for the
user
INPUT DATA:
Data about
changes in
inventory
INFORMATION
(Output data):
Quantity on
hand for items
in inventory
STORED
DATA

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INFORMATION SYSTEM COMPONENTS
 The input, storage, processing and output functions of an
information system are performed by the system’s
components.
 Hardware and software are the information technology in the
system, and personnel and procedures are the human
resources of the system. The stored data ties together the
information.
1) Hardware
2) Software
3) Personnel
4) Procedure
5) Stored Data

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HARDWARE
 Consist of computers, communications equipment, and other
devices used in a system.
 An information system can use any type or size of computer.
 Many information systems include several types of computers
and more than one of each type all connected together using
communications equipment such as wire or fiber-optic cables
and special circuit boards.

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HARDWARE
 Other hardware devices such as digital cameras, microphones,
and circuit boards for sending faxes are used in information
systems.
 All the computers, communications equipment, and other
devices used in information system form the hardware
component of the system.

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SOFTWARE
 Software consists of instructions that tell hardware what to do.
 Computers and computer-controlled hardware, such as
communications equipment, cannot function without software,
they must have instructions to tell them what to do.
 Many types of software are needed in information systems.

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SOFTWARE
 Some software tells the computers to solve specific business
problem such as computing payroll, whereas other software
manages the computer system to make it usable.
 Still other software controls communications equipment to
provide communication between computers.

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STORED DATA
 Stored data component of an information system consists of all
the data that is kept in computers in the system and that is
used by the software of the system.
 The stored data component of an information system includes
only the data that the system stores, not input and output data.
 Users enter input data into the system and receive output data,
or information from the system.

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STORED DATA
 In a sense, the input and output flow through the system, but
they are not part of the system because they do not contribute
to the purpose of the system.
 Thus, input and output data while, critical for the use of an
information system, are not components of the systems.

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PERSONNEL
 An information system does not operate by itself; people are
needed to make it run.
 People have to supply input data to the system, receive output
information from the system, operate the hardware in the
system, and run the software that is part of the system.
 These people are called personnel.

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PROCEDURES
 Instructions that tell people how to use and operate the system.
 People do not know what to do unless they have procedures to
follow.

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TYPES OF INFORMATION SYSTEM
a. Personal information systems
b. Workgroup information systems
c. Organizational information systems
d. Interorganizational information systems
e. Global information systems

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a. PERSONAL INFORMATION SYSTEMS
 Individual/Personal Information Systems- affect the work of
only a single person. Usually these types of systems operate
on personal computers used by one person at a time.
 Example:
i. Word processing software use by legal secretary under
direction of a lawyer to put together a legal document from
standard paragraphs stored in the computer and new material
dictated by the lawyer.

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a. PERSONAL INFORMATION SYSTEMS
ii. Financial analysis system that uses spreadsheet software on a
personal computer to do financial projection for Campus Sport
Shop.
iii. Graphics system used to prepare graphic images either for
including in a document or for showing at a presentation.

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b. WORKGROUP INFORMATION SYSTEMS
 IS often affect groups of individuals who work together such as
the employees on a team or in a department of a business.
 Such workgroup or group information systems often operate
on nearby personal computers that are connected in a local
area network (LAN) so that people at different computers can
work with each other.

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b. WORKGROUP INFORMATION SYSTEMS
 Example:
i. With email, letters and memos that normally would be sent on
paper are transmitted electronically from one computer in the
network to another. This type of system lets members of a
workgroup easily communicate with each other from different
locations and at different times.
ii. Information sharing systems in the sales department which
allows employees to share information about projects they are
working on together.

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c. ORGANIZATIONAL / ENTERPRISE
INFORMATION SYSTEMS
 An Information system that affects many people throughout a
business or organization, not just an individual or the people in
a single group.
 The systems usually operate either on mainframe computers
used by many people at a time, or on a group of computers
connected over a long distance to form a wide area network
(WAN).

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c. ORGANIZATIONAL / ENTERPRISE
INFORMATION SYSTEMS
 Example:
i. Payroll system which keep track of when employees work and
periodically prepares paychecks for the employees.
ii. Automated teller machine (ATM) used by banks which allows a
customer to perform various banking transaction is not a
computer but is connected to a computer at the bank’s office
that performs the tasks requested by the customer.

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d. INTERORGANIZATIONAL INFORMATION
SYSTEMS
 Operate on a group of computers located in different
organizations and connected in an interorganizational network.
 These systems allows the organizations to use computers to
transact business among themselves.

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d. INTERORGANIZATIONAL INFORMATION
SYSTEMS
 Example:
i. Electronic Data interchange (EDI) allows businesses to
exchange data electronically such as purchase information and
bills.
ii. Bank and other financial institutions use interorganizational
electronic funds transfer (FET) systems which allow funds to be
electronically transferred between financial institutions.

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e. GLOBAL / INTERNATIONAL INFORMATION
SYSTEMS
 Many businesses have facilities in more than one country.
Such international businesses often have IS that span national
borders. Global IS are connected by means of global WAN.
 Example:
i. Global production scheduling system to schedule shoe
production at different facilities. Production data and schedules
are transmitted between headquarters and different locations
using the business’s global WAN.

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INFORMATION SYSTEM USERS
 A user is a person who uses a computer information system to
help with some non computer activity in his or her personal or
work life.
 Sometimes this type of user is called an end user to distinguish
him or her from computer professionals.
 Users may use information systems either directly or indirectly

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HOW USERS USE INFORMATION SYSTEMS
 Direct Users - use an information system directly by pressing
keys on a computer keyboard or by operating a piece of
equipment that sends input data to a computer.
 Example:
i. A person using spreadsheet software to do financial projections
and a person checking inventory availability on a computer
screen.

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HOW USERS USE INFORMATION SYSTEMS
 Indirect Users - having someone else enter the data and receive
the output which is then given to the user.
 Example:
i. A manager who receives periodic, printed sales report.

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ETHICAL USE OF INFORMATION
SYSTEMS
 Sometimes users use information system inappropriately.
 Example:
i. A user may use an information system to gain access to
personal data not intended for that user, such as employee
salary data.
ii. A user may use the software of an information system without
permission on his or her personal computer at home.

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SYSTEMS
iii. Users may also use an information system to steal money from
a business or even steal or destroy the hardware use in an
information system.
 Ethics has to do with standards of behavior that people follow:
what is right and what is wrong.
 For example, people act ethically when they tell the truth even
when lying is not against the law.

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SYSTEMS
 The ethical use of information systems involves many issues.
 These issues arise in questions of confidentiality of
information, copying of software, use of someone else’s
computer, and ownership of information.

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CONNECTING USERS TO INFORMATION
TECHNOLOGY
 Most users use information system directly: they enter input
data through keyboard and see output data on a computer
screen.
 In an individual information system, a user uses a personal
computer for this interaction.
 For other types of information systems, the user often uses a
personal computer connected to other information technology
that is located some distance from the user.

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NETWORK
 Typically, users are connected to information technology
through a network.
 A network is a collection of computers and related equipment
connected using communications equipment so that they can
communicate with each other.
 Network can covers a small area such as a building (a LAN) or
a large area such as a city, region, country or several countries
(a WAN).

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THE INTERNET AND THE WORLD WIDE WEB
(WWW)
 Many users use the internet to access information technology.
 The Internet is a worldwide collection of interconnected
networks.
 The internet can be used for a variety of business and personal
activities. One of the most common use is for transmitting e-
mail.
 The World Wide Web (WWW) is a service on the Internet that
links information stored on different computers.

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ELECTRONIC COMMERCE
(E-COMMERCE)
 Electronic Commerce (e-commerce) allows businesses to use
networks, including the Internet, to promote and sell products
and services.
 With e-commerce, consumers can purchase products through
the Web.
 Customers can locate item of interest on the Web, review their
characteristics and features in advertisements and product
literature viewed on the Web, place orders electronically, and
pay for their purchases through the web.

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BENEFITS OF INFORMATION SYSTEMS
a. Better information
b. Improved service
c. Increased productivity
d. Competitive advantage

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a. BETTER INFORMATION
 IS store and process data, but they produce information, which
is the basis for good decision making.
 When a business person makes a decision, he or she selects
one of the several alternative courses of action.
 Information helps reduce the person’s uncertainty, and so with
better information a business person is more certain about the
outcome of the decision.

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a. BETTER INFORMATION
 Example:
i. Sales reporting system provides better information to a sales
manager for making decisions to help improve sales.

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b. IMPROVED SERVICE
 Computer information systems operate at any time of the day
or night and process data faster than humans.
 Thus, organizations and businesses serve their customers and
clients more conveniently and efficiently with computer
information systems.
 Improved service means that customers may be attracted to a
certain business because of its service.

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b. IMPROVED SERVICE
 Example:
i. Many gas stations have a computerized system that allows
customers to pay at the pump with a credit card.

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c. INCREASED PRODUCTIVITY
 Productivity has to do with how much people can accomplish
in a given period.
 With computer information systems, people can do more work
than they would be able to do.
 Increase productivity means that it costs less for business to
provide its goods and services.

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d. INCREASED PRODUCTIVITY
 These costs savings may be passed on to the customer in reduced
prices. Such savings also result in increased profits for the
business.
 Example:
i. A typist using a word processing system can revise and print a long
document faster than if he or she had to retype the document
completely on a typewriter.

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e. COMPETITIVE ADVANTAGE
 A business has a competitive
advantage when customers
clearly prefer its products over
those of other businesses.
 Some businesses gain a
competitive advantage by
being the least expensive seller
of particular products.
 Still other businesses
concentrate on special or
unique for a small section of
the market to gain a
competitive advantage.

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e. COMPETITIVE ADVANTAGE
 Example:
i. Information systems can help reduce the cost of production so
that a business can have the least expensive product.
ii. Information systems can also help a business determine how a
product should be different from those of its competitors.
iii. Information systems can also help a business identify small
segments of a market that are looking for special or unique
products.

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