Fundamentals of Information

Systems

1
 What is information System?
 Information system (IS) is a set of interrelated elements that
collect (input), manipulate (process), store, disseminate
(output) data and information and provide a corrective
reaction (feedback mechanism) to meet an objective.
 IS Feedback mechanism is critical for helping organizations
 To monitor and control its operation and to make sure it continues to
meet its goals and objectives.
 For increasing profits or improving customer service.
 Information System is the integrated concepts of information
and system.
 Information: An organized, meaningful, and useful interpretation of
data
 A system is a set of elements or components that interact to
accomplish goals
 Therefore, an information system a set of interrelated
components of information and system to support decision
making, coordination, control, analysis, and visualization of
various organizational activities.
2
What is a System?
• A set of elements or components that interact to
accomplish goals.
• A system’s four components consist of input,
processing, output, and feedback.
 Why Learn about Information Systems?
• Information itself has real value, and in order to stay competitive,
organizations require a steady flow of information about their business
partners, competitors, customers, employees, markets, and suppliers.
• Information systems are increasingly being used to gather, store, digest,
analyze, and make sense out of all information.
• Using information systems,
• individuals communicate instantaneously with one another;
• consumers make purchases online using mobile devices;
• members dispersed globally & across multiple organizations collaborate
effectively;
• financial institutions manage billions of dollars in assets around the world;
• manufacturers partner with suppliers and customers to track inventory, order
supplies, and distribute goods faster than ever before.
• To change businesses, increase profit and the way we live.
• To rework every aspect of organizations from product and service creation
through production, delivery, and customer service.
• To participate in and lead all innovations, & creating a job opportunities.
• Therefore , the ability to recognize and capitalize on IS opportunities can
make you an even more valuable member of your organization and will
ultimately help advance your career.
4
 Data, Information, and Knowledge
 Data is a prerequisite to information which represents unorganized and
unprocessed facts
• It consists of raw facts, such as an employee number, total hours worked in a
week, an inventory part number, etc
• It can be transformed based on rules and relationships to organize data so it
becomes useful, valuable information.
• It can be Alphanumeric data , Audio data, Image data, and video data
• Information is a collection of data organized and processed so that it
has additional value beyond the value of the individual facts. Eg. the
total sales for the month.
 Turning data into information is known as a process, or a set of
logically related tasks performed to achieve a defined outcome.
 The process of defining relationships among data to create
useful information requires knowledge, which is the awareness
and understanding of a set of information and the ways in which
that information can be made useful to support a specific task or
reach a decision.
 In other words, information is essentially data made more useful
through the application of knowledge. 5
 The Value of Information

• The value of information is directly linked to how it

helps decision makers achieve their organization’s goals.

• Valuable information which can help people perform tasks

more efficiently and effectively.

• Many businesses assume that reports are based on correct,

quality information, but, unfortunately, that is not always
true.

6
 Characteristics of Quality Information
 Fundamental to the quality of a decision is the quality of the
information used to reach that decision.
 The importance of each characteristics varies depending on the
situation and the kind of decision you are trying to make

• Reliable
• Secure
• Simple
• Timely
• Verifiable

7
 Characteristics of Quality Information
• Accessible: Information should be easily accessible by authorized users so
they can obtain it in the right format and at the right time to meet their
needs.
• Accurate: Information is error free.
• Complete: information contains all the important facts.
• Economical: It should be relatively economical to produce. Decision
makers must always balance the value of information with the cost of
producing it.
• Flexible: information should be used for a variety of purposes
• Relevant: It should be relevant that is important to the decision maker
• Reliable: it should be trusted by users. In many cases, the reliability of the
information depends on the reliability of the data-collection method means
it depends on the source of the information.
• Secure: Information should be secure from access by unauthorized users
• Simple: It should be simple, not complex, Sophisticated and detailed
information might not be needed.
• Timely: information should be delivered when it is needed
• Verifiable: It should be verifiable. This means that you can check it to
make sure it is correct, perhaps by checking many sources for the same
information
8
 What Is Computer-Based Information System?

• A computer-based information system (CBIS) is a single

set of hardware, software, databases, networks, people, and
procedures that are configured to collect, manipulate,
store, and process data into information.
• The components of a CBIS are part of a business’s technology
infrastructure which includes hardware, software, databases,
networks, people, and procedures .
• An organization’s technology infrastructure includes all the
hardware, software, databases, networks, people, and
procedures that are configured to collect, manipulate, store,
and process data into information.
• The technology infrastructure is a set of shared IS resources
that form the foundation of each computer-based information
system.

9
 Components of Computer Based Information System(CBIS)
• Hardware: computer equipment used to perform input, processing, storing and
output activities
• Software: the computer programs that govern the operation of the computer
• Database: Organized collection of facts and information, typically consisting of
two or more related data files
• People: The most important element in most CBIS .
• IS personnel include all the people who manage, run, program, and maintain
the system, including the chief information officer (CIO), who leads the IS
organization.
• End users are people who work directly with information systems to get
results. They include financial executives, marketing representatives, and
manufacturing line operators.
• Procedures: defines the steps to follow to achieve a specific end result, such
as enter a customer order, pay a supplier invoice, or request a current
inventory report. Include strategies, policies, methods, and rules for using the
CBIS
• Telecommunications, Network and internet
• Networks: Connect computers and equipment to enable electronic communication
• Internet : World’s largest computer network, consisting of thousands of
interconnected networks, all freely exchanging information
• Intranet: Internal network that allows people within an organization to exchange
information and work on projects
• Extranet: Network that allows selected outsiders, such as business partners and
customers, to access authorized resources of a company’s intranet 10
 Fundamental Types of Information Systems
• Most organizations have a number of different information
systems. When considering the role of business managers in
working with IS, it is useful to divide information systems into three
types:
• Personal IS
• Group IS, and
• Enterprise IS.
• Personal IS includes information systems that improve the productivity of
individual users in performing stand-alone tasks. Examples include
personal productivity software, such as word-processing, presentation,
and spreadsheet.
• Group IS includes information systems that improve communications and
supports collaboration among members of a workgroup. Examples include
Web conferencing software, wikis, and electronic corporate directories.
• Enterprise IS includes information systems that organizations use to
define structured interactions among their own employees and/or with external
customers, suppliers, government agencies, and other business partners.
Three examples of enterprise IS are transaction processing, enterprise,
and inter organizational systems. 11
Examples and characteristics of each type of information system

12
 Information Systems in Organizations
• An organization is a group of people that is structured and managed to meet
its mission or set of group goals.
• “Structured” means that there are defined relationships between members of the
organization and their various activities, and that procedures are defined that assign
roles, responsibilities, and authority to complete the various activities.
• Organizations are considered to be open systems, meaning that they affect
and are affected by their surrounding environment.

13
Fig. General model of an organization
 Business Information Systems(BIS)
• Most common types of information systems those designed for –
• Electronic and mobile commerce,
• Transaction processing(TPS),
• Management information(MIS), and
• Decision support (DSS)

The development of BIS

14
 Electronic and Mobile Commerce
• E-commerce : is Any business transaction executed electronically
between:
• Companies (business-to-business, B2B)
• Companies and consumers (business-to-consumer, B2C)
• Consumers and other consumers (consumer-to-consumer(C2C)
• Business and the public sector
• Consumers and the public sector
• Mobile commerce (m-commerce):The use of mobile, wireless devices
to place orders and conduct business
• E-commerce: Can enhance a company’s stock prices and market value
• Electronic business (e-business): Uses information systems and the
Internet to perform all business-related tasks and functions

15
 Transaction Processing Systems and
Enterprise Resource Planning
• Transaction: Any business-related exchange, such as payments to
employees and sales to customers
• Transaction processing system (TPS): is an organized collection
of people, procedures, software, databases, and devices used to
record completed business transactions
• Enterprise resource planning: Set of integrated programs that
Manages the vital business operations for an entire multisite,
global organization

16
 Information and Decision Support Systems
• Management information system (MIS): is an Organized
collection of people, procedures, software, databases, and
devices that Provides routine information to managers and
decision makers
• Decision support system (DSS): is an Organized collection of
people, procedures, software, databases, and devices that support
problem-specific decision making Used when problem is
complex and information needed to determine appropriate action
is difficult to obtain

17
 Specialized Business Information Systems

• Knowledge management systems (KMSs): is an

organized collection of people, procedures, software,
databases, and devices to Create, store, share, and use
the organization’s knowledge and experience
• Artificial intelligence (AI): Computer system takes
on characteristics of human intelligence
• Expert systems: Give computer ability to make
suggestions and function like an expert in a particular
field
• Virtual reality: Simulation of a real or imagined
environment that can be experienced visually in three
dimensions
18