SAINT LOUIS COLLEGE

City of San Fernando, La Union

College of Business and Accountancy
______________________________________________________________________________

Summary of Chapter 1.1 : Introduction to Information Systems

1.1 Why Study Information Systems?
The Informed User
●​ Being an informed user means understanding how IT applications work behind the
scenes. This knowledge allows you to enhance the quality of your organization’s IT
systems, recommend new technologies, and improve productivity.
●​ Informed users can anticipate the impact of new technologies and make better decisions
regarding their adoption.
●​ If you aspire to be an entrepreneur, understanding IT will help you leverage technology to
start and grow your own business.
Digital Transformation
●​ Organizations are increasingly undergoing digital transformation, which involves using
IT to improve customer relationships, business operations, and develop new business
models.
●​ Key technologies driving digital transformation include Big Data, Business Analytics,
Mobile Computing, the Internet of Things (IoT), Cloud Computing, and Artificial
Intelligence (AI).
●​ The chapter provides an example of Vietnam’s digital transformation, where the
government’s policies and investments in telecommunications infrastructure have
significantly improved the country’s economy and digital economy.

Career Opportunities in IT
●​ IT offers a wide range of career opportunities, including roles such as Chief Information
Officer (CIO), Systems Analyst, Business Analyst, and Web Developer.
●​ The demand for IT professionals is strong, with many high-paying jobs in areas like
e-commerce, network security, and mobile computing.
 ●​ The chapter lists some of the best IT jobs in 2020, including Software Developer, Data
Scientist, and IT Manager, highlighting the growth and lucrative nature of these careers.

Managing Information Resources

●​ Managing information systems in modern organizations is complex due to their strategic
value, high costs, and the evolution of the MIS (Management Information Systems)
function.
●​ In the past, the MIS department controlled all computing resources, but today, end users
play a significant role in managing IT resources. This shift has led to a partnership
between the MIS department and end users, where the MIS department acts as a
consultant.
●​ The responsibility for managing IT resources is shared between the MIS department and
end users, with the MIS department handling corporate-level resources and end users
managing departmental resources.
●​ The chapter outlines the traditional and new consultative functions of the MIS
department, emphasizing the importance of collaboration between IT and business units.

Core Concepts
●​ Informed User - Understanding IT allows you to make better use of technology, improve
organizational performance, and stay ahead of technological advancements.
●​ Digital Transformation - IT is a key driver of business strategy, enabling organizations
to improve operations, customer relationships, and develop new business models.
●​ Career Opportunities - IT offers numerous high-paying and in-demand career
opportunities, making it a valuable field of study.
●​ Managing IT Resources - Effective management of IT resources requires collaboration
between the MIS department and end users, with each playing a crucial role in the
organization’s success.

Case Study: Vietnam’s Digital Transformation

●​ Vietnam’s digital transformation is a prime example of how government policies and
investments in telecommunications infrastructure can drive economic growth.
 ●​ The country’s transition from a centralized economy to a market-based economy, coupled
with foreign investments in telecommunications, has led to significant improvements in
internet access, mobile computing, and e-commerce.
●​ Companies like Appota, Tiki, Skinlosophy, and Timo have leveraged these technological
advancements to grow their businesses and contribute to Vietnam’s digital economy.
●​ However, the chapter also highlights concerns about government surveillance and
restrictions on freedom of speech, showing that digital transformation can have both
positive and negative societal impacts.

Conclusion
●​ The chapter concludes by emphasizing the importance of being an informed user of IT,
understanding the role of digital transformation in modern organizations, and recognizing
the career opportunities available in the IT field.
●​ Whether you are a student, a professional, or an aspiring entrepreneur, understanding
information systems and technology is crucial for success in today’s digital world.

1.2 Overview of Computer-Based Information Systems (CBIS)

Computer-Based Information Systems (CBIS) are designed to collect, process, store, analyze,
and disseminate information to support decision-making and operations in organizations. Their
main objective is to deliver the right information to the right people, at the right time, in the right
format.

Core Concepts in Information Systems

●​ Data: Raw facts that have no context or meaning on their own, such as numbers or
characters.
●​ Information: Organized data that has meaning and value, for example, a student's name
paired with their GPA.
 ●​ Knowledge: Processed information that provides understanding and expertise, which can
be applied to solve business problems.

Components of a Computer-Based Information System

●​ Hardware: Includes physical devices such as processors, monitors, and printers.

●​ Software: Programs that enable hardware to process data.
●​ Database: A collection of related data stored for access.
●​ Network: Systems that connect computers for sharing resources, both wireline and
wireless.
●​ People: Individuals who use and interact with the system.
●​ Procedures: Instructions that guide the use of IT components to process information and
produce output.

Capabilities of Information Systems

●​ Numerical Computations: High-speed, high-volume Performance

●​ Communication: Fast and accurate— within and among organizations
●​ Data Storage: Manageable and accessible large volumes of information
●​ Information Access: Vast global information— quick and inexpensive
●​ Data Analysis: Efficient, greatly support decision-making
●​ Automation: Automate both manual tasks and semi-automatic business processes

Types of Information Systems in Organizations

1.​ Functional Area Information Systems (FAIS):

-​ Prepare reports primarily for middle managers, sometimes level managers
 -​ Support specific departments or functional areas like HR, finance, marketing, etc.

2.​ Transaction Processing Systems (TPS):

-​ Focus on the monitoring, collection, and processing of data from basic business
transactions.
-​ TPS systems provide essential data for the organization's database and are critical
for operations.
-​ Many modern Enterprise Resource Planning (ERP) systems also serve as TPSs,
integrating functions across departments.

3.​ Enterprise Resource Planning (ERP) Systems:

-​ Integrate multiple functional area information systems by using a common
database to streamline communication and operations across departments.

4.​ Interorganizational Information Systems (IOS):

-​ These systems span multiple organizations, such as those used in supply chain
management, where information, materials, and services flow between suppliers,
manufacturers, and customers.
-​ E-commerce Systems: These are a key example of IOS, enabling transactions
between businesses (B2B) and between businesses and consumers (B2C).

5.​ Business Intelligence (BI) Systems:

-​ Provide support for complex, non-routine decision-making primarily for middle
managers and knowledge workers, and sometimes lower-level managers.
-​ Typically paired with a data warehouse, BI systems allow users to analyze
business data independently.

6.​ Expert Systems (ES):

-​ Mimic human expertise by using reasoning and knowledge to solve specific
problems.
 -​ They can be standalone systems or embedded in other applications.

7.​ Dashboards:
-​ Provide managers with rapid access to real-time information and structured
reports, helping in decision-making, especially for executives.

Detailed Examples of Functional Area Information Systems

●​ Finance and Accounting: Use systems for budgeting, forecasting, and auditing.
●​ Sales and Marketing: Employ IT to analyze products, pricing, promotions, and customer
relationships.
●​ Manufacturing: Utilize IT for production scheduling, inventory control, and quality
management.
●​ Human Resources: Use HRIS for recruitment, performance management, and employee
career development.

Interorganizational Information Systems (IOS) and E-commerce

●​ Supply Chain Management (SCM): Involves the flow of materials, information, and
finances between organizations, often facilitated by IOS.
●​ E-commerce: Enables online transactions between businesses and customers (B2B,
B2C), often through digital platforms and websites.

1.3 How Does IT Impact Organizations?

A.​ IT Impacts Entire Industries
Various industries have been integrated with technology by acquiring software
engines and machinery to achieve competitive advantage:
■​ Book Industry. Amazon provides software products known as electronic
books or e-books.
■​ Music Industry. In 2019, Spotify, Apple Music, Pandora, and Amazon
Prime encouraged music fans to pay to stream music with high-quality
audio.
■​ Video Industry. Blockbuster, a leading video rental shop in the 1990s,
was disrupted by Netflix—a subscription video-on-demand, over-the-top
streaming service.
■​ Software Industry. Incumbent software companies such as Oracle and
Microsoft are increasingly threatened by software-as-a-service (SaaS)
products, such as Salesforce and Android, an open-source operating
system.
■​ Video Game Industry. The fastest growing entertainment companies are
video game makers-again, software. Examples are Zynga, the creator of
FarmVille; Rovio, the maker of Angry Birds; and Minecraft, now owned
by Microsoft.
■​ Photography Industry. Software disrupted this industry years ago
because mobile phones have camera features to capture good-quality
photos. In addition, people can upload photos automatically to the Internet
for permanent archiving and global sharing. Leading photography
companies include Instagram, Shutterfly, Snapfish, and Flickr. Meanwhile,
Kodak, the longtime market leader whose name was almost synonymous
with cameras, declared bankruptcy in January 2012.
■​ Marketing Industry. Today's largest direct marketing companies include
Facebook, Google, and Amazon. All of these companies are using
software to disrupt the retail marketing industry.
■​ Recruiting Industry. LinkedIn is disrupting the traditional job-recruiting
industry. For the first time, employees and job searchers can maintain their
résumés on a publicly accessible website that interested parties can search
in real-time.
■​ Financial Services Industry. Software has transformed the financial
services industry. Every financial transaction—for example, buying and
 selling stocks is now performed by software. Also, many of the leading
innovators in financial services are software companies.
■​ Motion Picture Industry. Studios require state-of-the-art information
technologies, including massive servers, sophisticated software, and
enormous storage. Consider DreamWorks Animation, a motion picture
studio that creates animated feature films, television programs, and online
virtual worlds. For a single motion picture, the studio manages over
500,000 files and 300 terabytes (a terabyte is 1 trillion bytes) of data,
using about 80 million central processing unit hours.
■​ Automobile Industry. In modern cars, the software is responsible for
running the engine, controlling safety features, entertaining passengers,
guiding drivers to their destinations, and connecting the car to mobile,
satellite, and GPS networks. Other software functions include Wi-Fi
receivers, which turn your car into a mobile hot spot; software, which
helps maximize fuel efficiency; and ultrasonic sensors, which enable some
models to parallel park automatically. The next step is to network all
vehicles together, a necessary step toward the next breakthrough:
self-driving or driverless cars. Google, Tesla, Apple, and all of the major
automobile companies are now developing driverless vehicles.
■​ Agriculture Industry. Satellite analysis of soils linked to per-acre
seed-selection software algorithms. In addition, precision agriculture uses
automated, driverless tractors controlled by global positioning systems
(GPS) and software. Precision agriculture is an approach to farm
management that uses information technology to ensure that crops receive
precisely what they need—for example, water, fertilizer, and pesticides for
optimum health and productivity
■​ Fashion Industry. Rent the Runway has redefined the fashion business,
making expensive clothing available to more women than ever before, and
the firm is also disrupting traditional physical retailers.
■​ Legal Profession. Law firms are now beginning to use a new artificial
intelligence software package called ROSS. In May 2020, ROSS offered
 its complete features, unlimited searches, and access to its entire U.S.
federal and state cases database, with prices starting at $69 per month per
user.

B.​ IT Reduces the Number of Middle Managers

○​ IT ultimately decreases the number of managers and experts. Therefore, it is
reasonable to assume that in coming years, organizations will have fewer
managerial levels and fewer staff and line managers. If this trend materializes,
promotional opportunities will decrease, making promotions much more
competitive. Bottom line: pay attention in school!

C.​ IT Changes the Manager’s Job

○​ IT will provide managers with real-time or near real-time information, meaning
managers will have less time to make decisions.
○​ IT also provides many tools—for example, business analytics applications such as
dashboards, search engines, and intranets- to help managers handle the volumes
of information they must deal with on an ongoing basis.
○​ IT will increase the likelihood that managers will have to supervise
geographically dispersed employees and teams remotely.

D.​ Will IT Eliminate Jobs?

The answer is that IT can eliminate jobs for nonmanagerial workers due to
relentless cost-cutting measures in modern organizations, resulting in large-scale
layoffs. As computers advance in intelligence and capabilities, the competitive
advantage of replacing people with machines is increasing rapidly and decreasing
job security. Conversely, IT creates new jobs, such as electronic medical
record-keeping and nanotechnology.

E.​ Employees at Work

 ○​ Employees’ Health and Safety
■​ Although computerization has benefited organizations by increasing
productivity, it also has created an ever-expanding workload for some
employees. Workers feel overwhelmed and have become increasingly
anxious about their job performance.
■​ It can cause job stress and physical problems, such as repetitive stress
injuries. The long-term use of keyboards can lead to repetitive strain
injuries such as backaches and muscle tension in the wrists and fingers.

○​ Provides Opportunities for People with Disabilities

■​ Computers can create new employment opportunities for people with
disabilities by integrating speech-recognition and vision-recognition
capabilities.
■​ Also, adaptive equipment for computers enables people with disabilities
to perform tasks they usually would not be able to do.

1.4 Importance of Information Systems to Society

A.​ IT Affects Our Quality of Life

Pros
■​ IT can provide employees with flexibility the that can significantly
improve the quality of leisure time, even if it doesn't increase the total
amount of leisure time.
■​ Automated machines like robots (mainly industrial robots and
collaborative robots or cobots) and autonomous vehicles can perform tasks
that humans do.
■​ Provides Opportunities for People with Disabilities

Cons
 ■​ IT also can place employees on "constant call"which means they are never
truly away from the office, even when they are on vacation. In fact,surveys
reveal that the majority of respondents take their laptops and smartphones
on theirvacations, did some work and while 100 percent take their cell
phones.
■​ Some robots may not be capable of handling unfamiliar situations. For
example, fatalities have been reported with Tesla automobiles on full
autopilot.

B.​ IT Impacts Health Care

Pros
■​ Information technology can be applied to improve the efficiency and
effectiveness of healthcare. Among the thousands of other health care
applications, administrative systems are critically important. These
systems perform functions ranging from detecting insurance fraud to
creating nursing schedules to performing financial and marketing
management.
■​ Medical personnel use IT to make better and faster diagnoses and to
monitor critically ill patients more accurately. Expert systems now help
doctors diagnose diseases, and machine vision is enhancing the work of
radiologists. Surgeons use virtual reality to plan complex surgeries.
■​ IT assists healthcare professionals in avoiding medical errors and
fine-tuning their medical diagnoses.

Cons
■​ Although some health data are structured-for example, blood pressure
readings and cholesterol counts-the vast majority are unstructured. In fact,
modern medicine entails so much unstructured data that their rapid growth
has surpassed the ability of health care practitioners to keep up.
■​ Due to accessible medical information because of Internet, people may
tend to do self-diagnosis and expose themselves to misinformation.