CMT 403 -

INFORMATION
SYSTEMS
MANAGEMENT
MOD 1 - Introduction to
Information Systems
 Academic norms (Pls read it, very important!!!)
• Choices have consequences. To Fail or to Pass well in an exam is an Option/Choice. Lets
aspire for 100% Pass rate in this unit.
• Class will be starting on time. Student lateness will be allowed 10 minutes after starting
the class.
• During the learning process, all the hand phones must be off or silent.
• CAT dates will be announced a week earlier
• Plagiarism not allowed for all assignments and final examination.
• The attendance minimum 75 percent of the total learning process
• Lectures will be offered on100% on physical basis though virtual classes can still be
offered.
• Quality of Education = Q of Students x Q of Faculty x Q of Learning
Environment
• Remain Relevant. How do you stay relevant ? Learn, Build Competencies &
Build a Brand, You as a brand.MOD 1 - Introduction to Information Systems 2
Learning Objectives
• Understand basic networked communications and services
• Mass Customization Revisited
• What is Data?
• What is Information?
• What is Knowledge?
• Characteristics of Valuable Information
• What is a System?
• What is an Information System?
• The Components of a CBIS
• Types of Business Information Systems
• Information Systems in Organizations
MOD 1 - Introduction to Information Systems 3
What is Networking?
• Connecting computers to share information and resources
• Complex and varied technology
• Many choices for physical connections and related software.

MOD 1 - Introduction to Information Systems 4

Networking Fundamentals
• As simple as two computers connected with a cable that can transmit
data
• Allows users to:
i. Share data quickly and efficiently
ii. Access to shared peripheral devices such as printers, scanners, and
fax machines

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Advantages of Networks
i. Allow groups of users to exchange information and share data
ii. Allow easy and efficient communication among individuals,
including electronic mail (e-mail)
iii. Device sharing can reduce costs

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 Standalone Computer and a “Sneakernet”
i. Standalone computer
• Single computer not attached to a network
• Cannot match power and convenience of network
ii. “Sneakernet”
• Passing floppy disk from machine to machine
• Old alternative to networking

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Sharing Resources on a Simple Network
• Networking computers allows them to:
i. Share data
ii. Access shared printer and other equipment

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Local Area Networks (LANs) and
Internetworks
i. Early networks – custom-built, expensive, severe restrictions
ii. Early Ethernet – no more than 30 users with total span of 607 feet
Local area network (LAN) – works within limited geographic area
iii. Building block for constructing larger networks, called
internetworks
iv. Internetwork – network 100 or more computers at distances in
excess of 1000 feet

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Wide Area Networks (WANs) and the
Internet
• Wide area network (WAN)
– spans distances measured in miles; links two or more separate LANS
Metropolitan area network (MAN)
– uses WAN technology to interconnect LANs within a specific
geographic region Internet
– global WAN internetwork; includes millions of machines and users
worldwide

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Terminologies
• A Networking Lexicon Must understand specialized networking
vocabulary, including:
i. Server — shares resources across network, typically with more
central processing unit (CPU) power and storage capacity than
other computers
ii. Client — accesses shared resources
iii. Request-response — client requests information; server responds
by providing information
iv. Client-server relationship — client makes a request to the server,
and the server responds with requested data
v. Peer-to-peer — computers share and request resources from one
another MOD 1 - Introduction to Information Systems 11
 Network Medium
• Network Medium Carries Network Messages
• Computers share access to common network medium that carries signals
from one computer to another
• Medium may be:
i. Physical cable, such as twisted pair, coaxial, or fiber-optic
ii. Wireless
• Physical interface to medium is usually network interface card (NIC) or
network adapter
• Kind of medium dictates type of connector and limits number and type of
devices as well as distance a single LAN can span.
MOD 1 - Introduction to Information Systems 12
Network Protocols
• Network Protocols – a common set of rules.
• Define how to interpret signals, identify individual computers, initiate
and end networked communication, and manage information
exchange across network medium
• Include TCP/IP, NetBEUI, IPX/SPX, and NWLink

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Network Software
• Network software issues requests and responses
• Network operating system (NOS) controls which computers and users
access network resources
• Include both client and server components
• Popular NOSs include:
i. Windows Server 2003,
ii. Windows XP,
iii. Windows 2000,
iv. Windows NT, and
v. Novell NetWare MOD 1 - Introduction to Information Systems 14
• Network applications access the network
i. Include e-mail programs,
ii. Web browsers, and
iii. Network- oriented utilities

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Network Services
• Services include:
i. file and print services,
ii. file-sharing,
iii. e-mail, and
iv. other capabilities

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Network communications
• Network communications are layered Network applications use NOS
or client networking software to get network protocol to access
medium
• Medium exchanges information with other computers

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Layers of networking process

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Simulation of animated depiction of the
layered networking process

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Mass Customization…
Revisited
• Building Impenetrable Customer Loyalty
• "A company that aspires to give customers exactly what they
want must look at the world through new lenses. It must use
technology to become two things: a mass customizer that
efficiently provides individually customized goods and
services, and a one-to-one marketer that elicits information
from its customer about his or her specific needs and
preferences."
B. Joseph Pine, II, Strategic Horizons

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What is Data?

• Raw Material
• Numbers and strings of letters with no precise
context or meaning

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What is Information?

• Data processed with knowledge

• “Data endowed with relevance and purpose”
• “Data becomes information when its creator
adds meaning”
• “An organized, meaningful, and useful
interpretation of data”

MOD 1 - Introduction to Information Systems 22

What is Knowledge?
• “A body of guidelines and rules used to select, organize,
and manipulate data to make it suitable for a given
task”
• “An awareness and understanding of a set of
information and how that information can be put to its
best use”
• “Internalized information + the ability to utilize this
information”

MOD 1 - Introduction to Information Systems 23

Data transformed into Information

A collection of facts organized

in such a way that they have
additional value beyond the
Information value of facts themselves.

Guidelines and procedures used to

Knowledge select, organize, and manipulate data
Process
to make it suitable for a specific task.

Data Raw facts

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Data becomes Information
 Establishing
relationships between
data creates
information.

Information = Data + Relationships

MOD 1 - Introduction to Information Systems 25

Characteristics of Valuable Information
• Relevant
• Complete
• Accurate
• Current/Timely
• Economical
• Accessible

MOD 1 - Introduction to Information Systems 26

Does Perfect Information Lead to Perfect
Decisions?
• IBM
• Among the first to learn that PCs were revolutionizing the computer
industry.
• Wal-Mart
• “We got big by replacing inventory with information”
Wal-Mart CIO

MOD 1 - Introduction to Information Systems 27

Determining the Value of Information
• Measurements
• Time saved, lower costs
• More accurate forecasts
• Improved service
• Often difficult to quantify
• Payback period?

MOD 1 - Introduction to Information Systems 28

What is a System?
• Components that work together to achieve a goal by accepting input,
processing it, and producing output in an organized manner.
• e.g. a sound system

MOD 1 - Introduction to Information Systems 29

Components of a System

INPUTS
INPUTS PROCESSING
PROCESSING OUTPUTS
OUTPUTS
Gathering
Gathering and
and Converting
Converting oror Producing
Producing useful
useful
capturing
capturing raw
raw data
data transforming
transforming data
data information,
information, usually
usually in
in
into
into useful
useful outputs
outputs the
the form
form of
of documents.
documents.

Output that is used to

make changes to input
or processing activities
Feedback

MOD 1 - Introduction to Information Systems 30

Components of a System

MOD 1 - Introduction to Information Systems 31

Open vs. Closed Systems
• Closed System
• Stands alone
• No connection to other systems
• Open System
• Interfaces and interacts with other systems
• Gets information from and provides information to other systems

MOD 1 - Introduction to Information Systems 32

System Performance
• Efficiency
• A measure of what is produced divided by what is
consumed.
• Effectiveness
• A measure of what is achieved divided by the stated goal.

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System Performance Standards

Sales

Defects

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System Variables and Parameters
• System Variable
• A quantity or item that can be controlled by the decision
maker (controllable).
• e.g. selling price

• System Parameter
• A value or quantity that cannot be controlled by the
decision maker.
• e.g. raw material costs

MOD 1 - Introduction to Information Systems 35

So, What is an Information System?

Information: An System: Components that work

together to achieve a goal by
organized, meaningful,
accepting input, processing it,
and useful interpretation and producing output in an
of data organized manner

• Information System: Components that

work together to process data and produce
information (to help companies solve
problems and make decisions).
MOD 1 - Introduction to Information Systems 36
The Components of a CBIS

1) Hardware
2) Software
• Operating systems
• Applications
3) Databases
4) Telecommunications/Networks
5) People
6) Procedures
MOD 1 - Introduction to Information Systems 37
Types of Business
Information Systems
• Transaction Processing
• E-Commerce
• Workflow
• Enterprise Resource Planning
• Management Information
• Decision Support
• Artificial Intelligence/Expert

MOD 1 - Introduction to Information Systems 38

Transaction Processing

• Transaction
• Any business related exchange
• Tend to be routine, labor-intensive
• “Interactions”

MOD 1 - Introduction to Information Systems 39

Transaction Processing
• Transaction processing system (TPS)
• The application of information technology to routine, repetitive, and usually
ordinary business transactions

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Transaction Processing System

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E-Commerce
• E-Commerce
• Any business transaction executed electronically between
parties involving the exchange of goods and/or services
• B2B, B2C

• Workflow
• Rule-based

MOD 1 - Introduction to Information Systems 42

E-Commerce
• Lowering Barriers to Entry
• Traditionally
• Sales force
• Advertising & promotion
• Factories, warehouses, retail stores
• Competing electronically
• Increases the threat of new companies

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Enterprise Resource Planning (ERP)
• Integrated programs that can manage a company’s entire set of
business operations
• Often coordinate planning, inventory control, production and ordering

MOD 1 - Introduction to Information Systems 44

Management Information System (MIS)
• Management Information System
• Used to provide routine information to help
managers plan, control, and make decisions
• Characteristics
i. Focus on operational efficiency
ii. Supports functional areas
iii. Common database
iv. Standard reports…

MOD 1 - Introduction to Information Systems 45

Management Information System
• Types of Reports
• Scheduled
• Demand
• Exception

MOD 1 - Introduction to Information Systems 46

Decision Support Systems
• Decision Support Systems (DSS)
• Used to support decision making (e.g. where to build, how
much to order)
• Characteristics
i. Suggests and compares alternatives
ii. Problem is complex
iii. Information is voluminous

MOD 1 - Introduction to Information Systems 47

Artificial Intelligence
• Artificial Intelligence (AI)
• A field that involves computer systems taking on the
characteristics of human intelligence
• Robotics
• Natural language processing
• Learning systems
• Neural networks (patterns & trends)

MOD 1 - Introduction to Information Systems 48

Expert Systems

• Expert Systems (ES)

• Give the computer the ability to make suggestions
and act like an expert in a particular field
• Medical diagnoses
• Repair problems
• Credit evaluations
• Investment strategies

MOD 1 - Introduction to Information Systems 49

Systems Development

• Systems Development
• The activity of creating or modifying existing business
systems.
• Objectives
• Make the process manageable
• Achieve predictable costs and timing

MOD 1 - Introduction to Information Systems 50

Systems Development Steps

1) Systems Investigation
• Gain a clear understanding of the problem to be
solved or opportunity to be addressed.
2) Systems Analysis
• Define the problems and opportunities of the existing
system.
3) Systems Design
• Determine how the new system will work to meet the
business needs defined during systems analysis.

MOD 1 - Introduction to Information Systems 51

Systems Development Steps

4) Systems Implementation
• Create or acquire the various system components
defined in the design step, assemble them, and put the
new system into operation.
5) System Maintenance and Review
• Check and modify the system so that it continues to
meet changing business needs.

MOD 1 - Introduction to Information Systems 52

Information
Systems in
Organizations
Strategic Information Systems
• Strategy
• A plan designed to help an organization gain a competitive
advantage

• Strategic Information Systems

• Information systems that help accomplish a strategy

MOD 1 - Introduction to Information Systems 54

Achieving a Competitive Advantage

• The essence of strategy is innovation, so

competitive advantage often occurs when an
organization tries a strategy that no one has
tried before.
• e.g. Dell was the first PC manufacturer to use the
Web to take customer orders.

MOD 1 - Introduction to Information Systems 55

The Value Chain
Michael Porter

• A series or “chain” of basic activities that add

value to a firm’s products or services
• Critical leverage points where information
technology can enhance a firm’s competitive
position

MOD 1 - Introduction to Information Systems 56

The Value-Added Process

Inputs Outputs
Money Products
Materials Services
People Value-Added Process Data
Machines Increases the combined Information
Data value of the inputs.
Information
Decisions

MOD 1 - Introduction to Information Systems 57

The Value Chain

What
value can
IT add at
each step
in the
Value
Chain?

MOD 1 - Introduction to Information Systems 58

Five-Force Model

Competitive forces that

Substitute
lead firms to seek Products
competitive advantage

Buyer Supplier
Power Rivalry
Power

New
Entrants

MOD 1 - Introduction to Information Systems 59

Ways to Achieve a Competitive Advantage
• Reduce costs
• Automation of a business process
• Transaction processing
• Online customer service
• Factory robotics
• Raise barriers to entry
• Legal protection of intellectual property
• High cost of entry

MOD 1 - Introduction to Information Systems 60

Ways to Achieve a Competitive Advantage
• Establish high switching costs
• Penalties for terminating contracts
• Software re-training

• Create new products and services

• Copyright protection
• Continuous innovation

MOD 1 - Introduction to Information Systems 61

Ways to Achieve a Competitive Advantage
• Differentiate products and services
• Branding
• First to market

• Enhance products and services

• Longer warranties, more information
• Better service

MOD 1 - Introduction to Information Systems 62

Ways to Achieve a Competitive Advantage
• Establish alliances
• Bundling products
• Rewards programs
• Outsourcing

• Lock in suppliers or customers

• Purchasing volume
• Create a standard

MOD 1 - Introduction to Information Systems 63

Ways to Achieve a Competitive Advantage

• Potentially winning business moves

PLUS

• Ideas for harnessing technology to

implement those moves

MOD 1 - Introduction to Information Systems 64

Organizational Structures

• An organization’s structure can have an impact

on how information systems are viewed and
what kind are used:
• Hierarchical
• Project/Product
• Team
• Multidimensional

MOD 1 - Introduction to Information Systems 65

Traditional Organizational Structure

MOD 1 - Introduction to Information Systems 66

Project Organizational Structure

MOD 1 - Introduction to Information Systems 67

Team Organizational Structure

Member Member
Member
Member
Member Team
Leader

Management

MOD 1 - Introduction to Information Systems 68

Multidimensional (Matrix)
Organizational Structure

MOD 1 - Introduction to Information Systems 69

Organizational Culture & Change

• Organizational Culture
 Set of shared beliefs and assumptions
• Organizational Change
 A process that alters the way an
organization functions
 Often associated with new IS

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Organizational Change
Lewin & Schein

•Create receptive
climate(there is a better
way to operate)

•Learn new methods,

obtain commitment

•Reinforce, reward new

behavior

MOD 1 - Introduction to Information Systems 71

Reengineering
• The radical redesign of business processes to
achieve a significant breakthrough in business
results
• Delivery time
• Product & service quality
• Costs, revenue & productivity

MOD 1 - Introduction to Information Systems 72

Reengineering
• Employee resistance
• Employees must understand benefits
• Old rules must be challenged
Examples
• Size of orders
• Credit approval
• Decision-making level

MOD 1 - Introduction to Information Systems 73

Reengineering

• Examples of reengineering initiatives

• Simplifying work processes
• Combining several jobs into one
• Outsourcing ancillary processes
• Entering new business areas
• Establishing new management structures
• Renovating technology systems

MOD 1 - Introduction to Information Systems 74

Reengineering vs. Continuous Improvement

 Strong action to solve  Routine actions to make

serious problems minor improvements

 Top-down-driven by senior  Worker driven

executives

 Broad in scope; cuts across  Narrow in scope; focus in a

organizations given area

 Goal is to achieve a major  Goal is continuous, gradual

breakthrough improvement

MOD 1 - Introduction to Information Systems 75

Total Quality Management

• Company-wide effort to add more value

• Keen awareness of customer
• Strategic vision for quality
• Empowerment of employees
• Rewards for high quality

MOD 1 - Introduction to Information Systems 76

Outsourcing
• Contracting with outside professional services to meet specific
business needs.
• Focus on core business
• Save money

MOD 1 - Introduction to Information Systems 77

 Downsizing
• Reducing the number of employees to cut costs

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Performance-Based Information Systems
• Productivity
• A measure of the output achieved divided by the input
required.
• Return on Investment
• Profit or benefit as a percentage of investment
• Earnings Growth
• Market Share
• Customer Awareness & Satisfaction
• Total Cost of Ownership
MOD 1 - Introduction to Information Systems 79
Identifying Risks

• How well are requirements understood?

• Does the project require pioneering effort?
• Is there a risk of severe business repercussions?

MOD 1 - Introduction to Information Systems 80

Leading Edge vs. Bleeding Edge

• Bleeding Edge: When failure occurs because an

organization tries to be too far out on the
technological leading edge
• Time-Warner’s Pathfinder portal
• Leading Edge: Let competitors test the new
technology first
• Microsoft Word, Excel, Access, IE

MOD 1 - Introduction to Information Systems 81

Justifying IS

• Tangible savings (reduced costs)

• Intangible savings (better decisions)
• Legal requirements (reports)
• Modernization (Y2K, new apps)
• Pilot project (laptops)

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Roles and Functions in the IS Department

MOD 1 - Introduction to Information Systems 83

***END***

MOD 1 - Introduction to Information Systems 84