Learning Objectives

Upon successful completion of this chapter, you will be able to:

• define what an information system is by identifying its major
components;
• describe the basic history of information systems
What is Information Systems?
an integrated set of components for collecting, storing, and
processing data and for providing information, knowledge, and
digital products (Swass, Vladimir, Encyclopedia).

are combinations of hardware, software, and

telecommunications networks that people build and use to
collect, create, and distribute useful data, typically in
organizational settings[2]

are interrelated components working together to collect,

process, store, and disseminate information to support decision
making, coordination, control, analysis, and visualization in an
organization[3]
What is Information Systems?
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

corporations use information systems to process financial

accounts, to manage their human resources, and to reach
their potential customers with online promotions
What is Information Systems?
eBay, a largely auction marketplace
Amazon, an expanding electronic mall and provider of cloud
computing services
Alibaba, a business-to-business e-marketplace
Google, a search engine company that derives most of its
revenue from keyword advertising on Internet searches
 Purpose of Information Systems
The purpose of an information system is to turn raw data into
useful information that can be used for decision making in an
organization.

Many information systems are designed to support a

particular process within an organization or to carry out very
specific analysis.
Information Systems Offers

• MIS Solutions can guide you to choose and implement the

right technology for your business.
• MIS solutions integrate disparate business processes and
improve productivity and efficiency within enterprises.

• Customized MIS solutions may include HR & Payroll

Management, Customer Relationship Management, Sales
Tracking System, Operations Management, Accounting
Management, Asset Management, Projects Management
and Admin portal etc.
The Components of Information Systems
1. Hardware
Information systems hardware is the part of an information system
you can touch – the physical components of the technology.
Computers, keyboards, disk drives, iPads, and flash drives are all
examples of information systems hardware.
2. Software
Software is a set of instructions that tells the hardware what to do.
Software is not tangible – it cannot be touched. There are several
categories of software, with the two main categories being operating-
system software, which makes the hardware usable, and application
software, which does something useful.
3. Data
You can think of data as a collection of facts. For example, your
street address, the city you live in, and your phone number are all
pieces of data. Like software, data is also intangible.
The Components of Information Systems
4. People
From the front-line help-desk workers, to systems analysts, to
programmers, all the way up to the chief information officer (CIO),
the people involved with information systems are an essential
element that must not be overlooked.
5. Process
A process is a series of steps undertaken to achieve a desired
outcome or goal. Information systems are becoming more and more
integrated with organizational processes, bringing more productivity
and better control to those processes.

buzzwords such as “business process reengineering,” “business

process management,” and “enterprise resource planning” all
have to do with the continued improvement of these business
procedures and the integration of technology with them
 Ways of Describing Information

the components that and the role that these

make up an information components play in an
system organization.

• Technology (Hardware, • Mainframe Era

Software, • PC Revolution
Data) • Client-Server
• People • Web and eCommerce
• Process • Web 2.0
The Role of Information Systems
1. The Mainframe Era

From the late 1950s through the 1960s, computers were

seen as a way to more efficiently do calculations.
The primary work of these
devices was to organize
and store large volumes
of information that were
tedious to manage by
hand.

These devices served dozens to hundreds of users at a time

through a process called time-sharing. Typical functions included
scientific calculations and accounting, under the broader
umbrella of “data processing.”
The Role of Information Systems
1. The Mainframe Era

In the late 1960s, the Manufacturing Resources

Planning (MRP) systems were introduced.

gave companies the ability to manage the manufacturing

process, making it more efficient. From tracking inventory
to creating bills of materials to scheduling production, the
MRP systems (and later the MRP II systems) gave more
businesses a reason to want to integrate computing into
their processes. IBM became the dominant mainframe
company. Nicknamed “Big Blue,” the company became
synonymous with business computing.
The Role of Information Systems
2. The PC Revolution

In 1975, the first microcomputer was announced on the

cover of Popular Mechanics: the Altair 8800. Its immediate
popularity sparked the imagination of entrepreneurs
everywhere, and there were quickly dozens of companies
making these “personal computers.”

The most prominent of these early personal computer

makers was a little company known as Apple Computer,
headed by Steve Jobs and Steve Wozniak, with the
hugely successful “Apple II.”
The Role of Information Systems
2. Client-Server

In the mid-1980s, businesses began to see the need to

connect their computers together as a way to collaborate
and share resources. This networking architecture was
referred to as “client-server” because users would log in
to the local area network (LAN) from their PC (the “client”)
by connecting to a powerful computer called a “server,”
which would then grant them rights to different resources
on the network (such as shared file areas and a printer).
The Role of Information Systems
2. Client-Server

It was during this era that the first Enterprise Resource

Planning (ERP) systems were developed and run on the
client-server architecture.

An ERP system is a software application with a centralized

database that can be used to run a company’s entire
business. With separate modules for accounting, finance,
inventory, human resources, and many, many more, ERP
systems, with Germany’s SAP leading the
way, represented the state of the art in information systems
integration.
The Role of Information Systems
4. The World Wide Web and E-Commerce

invented in 1969, the Internet was confined to use by

universities, government agencies, and researchers for
many years. One exception to this was the ability to
expand electronic mail outside the confines of a single
organization.
It was with these early Internet connections that the
computer truly began to evolve from a computational
device to a communications device.

In 1989, Tim Berners-Lee developed a simpler way for

researchers to share information over the network at
CERN laboratories, a concept he called the World Wide
Web.
The Role of Information Systems
4. The World Wide Web and E-Commerce

In 1991, the National Science Foundation, which

governed how the Internet was used, lifted restrictions on
its commercial use. The year 1994 saw the establishment
of both eBay and Amazon.com, two true pioneers in the
use of the new digital marketplace.

As it became more expected for companies to be connected to the

Internet, the digital world also became a more dangerous place.
Computer viruses and worms, once slowly propagated through the
sharing of computer disks, could now grow with tremendous speed via
the Internet.
The Role of Information Systems
5. Web 2.0

This new type of interactive website, where you did not

have to know how to create a web page or do any
programming in order to put information online, became
known as web 2.0. Web 2.0 is exemplified by blogging,
social networking, and interactive comments being
available on many websites. This new web-2.0 world, in
which online interaction became expected, had a big
impact on many businesses and even whole industries.

The process of technology replacing a middleman in a

transaction is called disintermediation.
The Role of Information Systems
6. Post-PC World

The limited storage and processing power of these devices

is being offset by a move to “cloud” computing, which
allows for storage, sharing, and backup of information on a
massive scale..
The Role of Information Systems
6. Post-PC World
Can Information Systems Bring Competitive Advantage?

It has always been the assumption that the implementation

of information systems will, in and of itself, bring a
business competitive advantage.
In 2003, Nicholas Carr wrote an article in the Harvard
Business Review that questioned this assumption. The
article, entitled “IT Doesn’t Matter,” raised the idea that
information technology has become just a commodity.
Instead of viewing technology as an investment that
will make a company stand out, it should be seen as
something like electricity: It should be managed to
reduce costs, ensure that it is always running, and be
as risk-free as possible.
 Sidebar: Walmart Uses Information Systems to Become the World’s Leading
Retailer

Walmart is the world’s largest retailer, earning $15.2 billion on sales of $443.9 billion in
the fiscal year that ended on January 31, 2012. Walmart currently serves over 200 million
customers every week, worldwide. Walmart’s rise to prominence is due in no small part to
their use of information systems.
One of the keys to this success was the implementation of Retail Link, a supply-chain
management system. This system, unique when initially implemented in the mid-1980s,
allowed Walmart’s suppliers to directly access the inventory levels and sales
information of their products at any of Walmart’s more than ten thousand stores. Using
Retail Link, suppliers can analyze how well their products are selling at one or more
Walmart stores, with a range of reporting options. Further, Walmart requires the suppliers to
use Retail Link to manage their own inventory levels. If a supplier feels that their products
are selling out too quickly, they can use Retail Link to petition Walmart to raise the levels of
inventory for their products. This has essentially allowed Walmart to “hire” thousands of
product managers, all of whom have a vested interest in the products they are managing.
This revolutionary approach to managing inventory has allowed Walmart to continue to drive
prices down and respond to market forces quickly.
Today, Walmart continues to innovate with information technology. Using its tremendous
market presence, any technology that Walmart requires its suppliers to implement
immediately becomes a business standard.
 The Walmart case study introduced us

how the company used information systems to become the

world’s leading retailer. Walmart has continued to innovate
and is still looked to as a leader in the use of technology.

Do some original research and write a one-page report

detailing a new technology that Walmart has recently
implemented or is pioneering.

https://blog.walmart.com/innovation/20180201/take-a-trip-through-50-years-of-retail-innovation
"To succeed in this world, you have to change all the
time.“ – Sam Walton (Founder Walmart)
In a world where you have to stay two steps ahead of what
people want, you have to innovate, test, fail and learn at
lightning speed. And we’ve done just that for over 50 years.
What is Data Center?

A data center is a facility that centralizes an organization’s

IT operations and equipment, as well as where it stores,
manages, and disseminates its data. Data centers house a
network’s most critical systems and are vital to the continuity
of daily operations.
REFERENCES

Bourgeois, Dave and Bourgeois, David. Chapter 1: What Is an Information

System? PressBook. https://bus206.pressbooks.com/chapter/chapter-1/#footnote-5-
1