Chapter 1

Foundations of
Information Systems in
Business
 I. The Real World of Information Systems

 Information Systems are an essential

field in the study of business
administration and management.

 Improve the effectiveness and

efficiency of business processes,
managerial decision making, and
workgroup collaboration.

2
 What do these pictures have in
common?

3
I. The Real World of Information Systems

 An Information System may be

computerized or not
 Smoke signals for communication
 Card catalogs in a library
 Your book bag, day planner, notebooks, and
file folders
 The cash register at your favorite fast-food
restaurant
 A paper-based accounting ledger

4
II. The Fundamental Roles of IS in Business

 Support of Strategies for Competitive

Advantage
 Support of Business Decision Making
 Support of Business Processes and
Operations

5
Book Structure
 Framework of major areas:
 Foundation Concepts – fundamental behavioral, technical,
business, and managerial concepts about information
systems
 Information Technologies – major concepts, developments,
and management issues in IT
 Business Applications – major uses of IS for operations,
management, and competitive advantage
 Development Process – how an IS is planned, developed, and
implemented to meet business opportunities
 Management Challenges – effectively and ethically managing
IT at the end-user, enterprise, and global levels of a business

6
III. Trends in Information Systems

7
IV. The Role of e-Business in Business

 E-Business – use of Internet technologies to

empower business processes, e-commerce,
and enterprise collaboration within a firm and
its customers, suppliers, and stakeholders

 Enterprise Collaboration Systems – support

communication, coordination, and
collaboration among networked
teams/workgroups

 E-Commerce – buying, selling, marketing,

and servicing products, services, and
information over computer networks
8
IV. The Role of e-Business in Business

9
V. Types of Information Systems

10
V. Types of Information Systems

 Operation Support Systems – help run

the daily business, but do not provide
much information for managerial
decision-making
 Transaction Processing Systems – record &
process daily transactions
 Process Control Systems - monitor and
control physical processes
 Enterprise Collaboration Systems (Office
Automation Systems) – enhance team and
workgroup communications and productivity

11
 V. Types of Information Systems

 Management Support Systems

 Management Information Systems –
reports and displays for managers to help
them make better business decisions
 Decision Support Systems – direct
computer support for decision-making
 Executive Information Systems – critical
information specifically for executives to
make better decisions; not just a better
MIS

12
V. Types of Information Systems

 Other Categories of Information

Systems
 Expert Systems – expert advice for operational
decisions
 Knowledge Management Systems – support
creation, organization, and dissemination of
business knowledge
 Strategic Information Systems – apply IT to
products, services, and processes for strategic
advantage
 Functional Business Systems – support basic
business functions
 Cross-Functional Systems – integrate various roles
and outputs into a variety of functions

13
VI. Managerial Challenges of Information Technology

 Challenges and Opportunities

 Business/IT Challenges
 Business/IT Developments
 Business/IT Goals

 Success and Failure with IT

 Effectiveness – does it work?
 Efficiency – how well does it work?

14
Responsibility and Accountability for
Project Success (and Failure)

 If a project involving IT fails, who gets

blamed? Why? Who should be
accountable?

 If the project is successful, who gets

credit?

 How can you go about changing

mindsets about these projects?
15
VI. Managerial Challenges of Information Technology

 Developing IS Solutions – an Information

Systems is a Solution to a Business Problem
 Investigate (Plan) – recognize the problem exists
 Analyze – investigate the current system
 Design – designing the new system
 Implement – put the new system into effect
 Maintain (Use) – use, monitor, and maintain the new
system

16
 Modernize (Don’t Replace!) Your Legacy
Applications
 What is a legacy system?
 Why is it a problem?
 What solutions are available?

17
VI. Managerial Challenges of Information Technology

 Challenges and Ethics of IT – what is

improper, irresponsible, or harmful?

18
VI. Managerial Challenges of Information Technology

 Challenges of IS and IT Careers – in

business, if you are not in an IT career,
you will work regularly with IS
professionals
 Employment opportunities in IS are strong
 Business Technologist – a professional competent
in both business and IT
 U.S. Department of Labor – IS positions expected
to be among fastest growing for years to come

19
The Critical Role of Business Analysts

 What is the role of a business analyst?

 Why is a business analyst important?

 What skills should a business analyst

bring to the firm?

 Why are these skills important?

20
VI. Managerial Challenges of Information Technology

 The IS Function
 IS is a major functional area of business, just as
important as any business function
 IS is an important contributor to operational
efficiency, employee productivity and morale, and
customer services and satisfaction
 IS is an important strategic resource

21
The Foundation for Business Processes

22
I. System Concepts: The Foundation for Business
Processes
 Other System Characteristics
 Environment and Subsystems
 Interface – a shared boundary between
systems
 Open (and Closed) Systems – open systems
interact with other systems (closed systems
do not interact with other systems)
 Adaptive Systems – have the ability to change
themselves or their environment

23
II. Components of Information Systems

24
III. Information System Resources

 People Resources
 IS Specialists
 End Users

 Hardware Resources
 Machines – the computing devices
themselves
 Media – where data is stored

25
III. Information System Resources

 Software Resources
 Programs – instructions that tell the
computer what to do
 System Software – runs the computer
 Application Software – a particular use by end
users

 Procedures – instructions on how to use

the system

26
III. Information System Resources

 Data Resources
 Data – unorganized facts and figures
 Information – data organized so that it has
value to the organization

 Network Resources
 Communications Media- the physical
pathways over which signals travel
 Network Infrastructure – hardware,
software, and data technologies needed to
support communications networks

27
IV. Information System Activities

 Input of Data Resources

 Processing of Data into Information –
organize, analyze, and manipulate data
 Output of Information Products –
dissemination of information products to
appropriate end users
 Storage of Data Resources
 Control of System Resources –
monitoring feedback to assure the system
meets its performance standards

28
V. Recognizing Information Systems

 People, Hardware, Software, Data, and

Network Resources

 Types of Information Products Used

 Performance of Input, Processing,

Output, Storage and Control Activities

29