Information Systems in

Organization
 What Is an Information System?
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 Feedback mechanism
 The component that helps organizations
achieve their goals, such as increasing profits
or improving customer service
 A set of interrelated components that collect,
manipulate, store data and disseminate
information and provide a feedback
mechanism to monitor performance.
 What Is an Information System?
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 Input, Processing, Output, Feedback
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 Input
 Gathering and capturing raw data
 Processing
 Converting or transforming data into useful
outputs
 Output
 Production of useful information, usually in the
form of documents and reports
 Feedback
 Output that is used to make changes to input or
processing activities
 Information Concepts
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 Data, information, and knowledge

 Data: Raw facts
 Information: Collection of facts organized in
such a way that they have additional value
beyond the value of the facts themselves
 Process: Set of logically related tasks
performed to achieve a defined outcome
 Knowledge: Awareness and understanding of
a set of information
 Data, Information and Knowledge
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 Data, Information and Knowledge
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 The Characteristics of Valuable Information
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 If information is not accurate or complete

 People can make poor decisions, costing
thousands, or even millions, of dollars
 Information can be of little value to the
organization
 If information is not relevant, not delivered to
decision makers in a timely fashion, or too
complex to understand
 The Value of Information
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 Valuable information
 Can help people and their organizations
perform tasks more efficiently and effectively
 Can help managers decide whether to invest
in additional information systems and
technology
 Manual and Computerized Information Systems
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 An information system can be:

 Manual
• Example: Developing patterns and trends on graph
paper for stock analysis
 Computerized
• Example: Using program trading to track the
market and trade large blocks of stocks when
discrepancies occur
 Computer-Based Information Systems
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 Single set of hardware, software,

databases, telecommunications, people,
and procedures configured to collect,
manipulate, store, and process data into
information
 Information technology (IT)
 Hardware, software, databases, and
telecommunications
 Computer-Based Information Systems
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 Computer-Based Information Systems
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 CBIS components
 Hardware: Computer equipment used to perform
input, processing, and output activities
 Software: Computer programs that govern the
operation of the computer
 Database: Organized collection of facts and
information
 Telecommunications: Electronic transmission of
signals for communications
 Networks: Connect computers and equipment in
a building, around the country, and around the
world
 Computer-Based Information Systems
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 CBIS components (continued)

 Internet: World’s largest computer network
 People: Manage, run, program, and maintain
the system
 Procedures: Strategies, policies, methods,
and rules for using a CBIS
 Business Information Systems
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 Most common types of information

systems used are those designed for:
 Electronic and mobile commerce
 Transaction processing
 Management information
 Decision support
 Business Information Systems
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 Electronic and Mobile Commerce
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 E-commerce
 Any business transaction executed
electronically between:
• Companies (B2B)
• Companies and consumers (B2C)
• Consumers and other consumers (C2C)
• Business and the public sector
• Consumers and the public sector
 Electronic and Mobile Commerce
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 Mobile commerce (m-commerce)

 Transactions conducted anywhere, anytime
 Electronic business (e-business)
 Uses information systems and the Internet to
perform all business-related tasks and
functions
 Electronic and Mobile Commerce
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 Electronic and Mobile Commerce
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 Enterprise Systems
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 Transaction
 Any business-related exchange
 Transaction processing system (TPS)
 Organized collection of people, procedures,
software, databases, and devices used to
record completed business transactions
 Enterprise resource planning
 Programs that manage the vital business
operations for an entire multisite, global
organization
 Enterprise Systems
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 Information and Decision Support Systems
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 Management information systems

 Organized collection of people, procedures,
software, databases, and devices
 Provides routine information to
managers/decision makers
 Decision support systems
 Organized collection of people, procedures,
software, databases, and devices that support
problem-specific decision making
 Information and Decision Support Systems
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 Information and Decision Support Systems
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 Specialized Business Information Systems
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 Knowledge management systems (KMSs)

 Organized collection of people, procedures,
software, databases, and devices
 Artificial intelligence (AI)
 Field in which the computer system takes on
the characteristics of human intelligence
 Robotics, vision systems, and natural
language processing
 Specialized Business Information Systems
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 Specialized Business Information Systems
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 Expert systems
 Give the computer the ability to make
suggestions and act like an expert in a
particular field
 Virtual reality
 The simulation of a real or imagined
environment that can be experienced visually
in three dimensions
 Systems Development
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 Creating or modifying existing business

systems
 Systems development failures can be a result
of:
 Poor planning and scheduling
 Insufficient management of risk
 Poor requirements determination
 Lack of user involvement
 Outsourcing
 Allows a company to focus on what it does best
and delegate other functions
 Systems Development
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 Systems Development
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 Systems investigation
 Goal is to gain understanding of the problem
to be solved or opportunity to be addressed
 Systems analysis
 Defines problems and opportunities of the
existing system
 Systems Development
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 Systems design
 Determines how the new system will work to
meet the business needs defined during systems
analysis
 Systems implementation
 Creating or acquiring the system components
defined in the design step, assembling them, and
putting the new system into operation
 Systems maintenance and review
 Checking and modifying the system so that it
continues to meet changing business needs
 Organizations and Information Systems
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 Organization
 Collection of people and other resources
established to accomplish a set of goals
 Has inputs, processing mechanisms, outputs,
and feedback
 Organizations and Information Systems
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 Organizations and Information Systems
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 Value chain
 Series of activities that includes inbound logistics,
warehouse and storage, and production
 Supply chain management (SCM)
 Helps determine what supplies are required for
the value chain and what quantities are needed
to meet customer demand
 Customer relationship management (CRM)
 Helps companies manage all aspects of
customer encounters, including marketing and
advertising
 Organizations and Information Systems
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 Organizational Culture and Change
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 Organizational culture
 Major understandings and assumptions
 The understandings are often not stated or
documented as goals or formal policies
 Organizational change
 How organizations plan for, implement, and
handle change
 Can be sustaining or disruptive
 User Satisfaction and Technology Acceptance
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 Technology acceptance model (TAM)

 Specifies factors that can lead to higher
acceptance and usage of technology
 Technology diffusion
 Measure of widespread use of technology
 Technology infusion
 Extent to which technology permeates a
department
 Competitive Advantage
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 Significant, long-term benefit to a

company over its competition
 An organization often uses its information
system to help achieve a competitive
advantage
 Factors to Seek Competitive Advantage
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 Five-forces model identifies key factors

 Rivalry among existing competitors
 Threat of new entrants
 Threat of substitute products and services
 Bargaining power of buyers
 Bargaining power of suppliers
 Strategic Planning for Competitive Advantage
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 Cost leadership
 Deliver the lowest possible products and
services
 Differentiation
 Deliver different products and services
 Niche strategy
 Deliver to a small, niche market
 Altering the industry structure
 Change the industry to become more
favorable to organization
 Strategic Planning for Competitive Advantage
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 Creating new products and services

 Introduce periodically or frequently
 Improving existing product lines and
service
 Make real or perceived improvements
 Other strategies
 Growth in sales
 First to market
 Customizing products and services
 Hiring the best people
 Performance-Based Information Systems
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 Three major stages

 Organizations focused on using information
systems to reduce costs and improve
productivity
 Companies generally ignored revenue
potential, not looking for opportunities to use
information systems to increase sales
 Companies carefully consider both strategic
advantage and costs
 Performance-Based Information Systems
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 Productivity
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 Output achieved divided by input required

 Higher level of output for a given level of
input means greater productivity
 Lower level of output for a given level of
input means lower productivity
 ROI and the Value of Information Systems
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 Earnings growth
 Increase in profits
 Market share
 Percentage of sales in relation to total market
 Customer awareness and satisfaction
 Based on feedback from internal and external
users
 Total cost of ownership
 Sum of all costs over the life of the
information system
 Risk
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 Managers must consider the risks of:

 Designing, developing, and implementing new
or modified information systems
 Information systems can be costly failures
 Costs of development and implementation
can be greater than the returns from the
new system
 Global Challenges in Information Systems
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 Cultural challenges
 Language challenges
 Time and distance challenges
 Infrastructure challenges
 Currency challenges
 Global Challenges in Information Systems
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 Product and service challenges

 Technology transfer issues
 State, regional, and national laws
 Trade agreements