1 Chapter 1 Business Information Systems: An Overview

11

Chapter 1Chapter 1Business Information Business Information

Systems: An Systems: An OverviewOverview

22

Learning ObjectivesLearning Objectives

When you finish this chapter, you will:When you finish this chapter, you will:

– Understand why information systems are Understand why information systems are essential to business.essential to business.

– Know how computers process data into useful Know how computers process data into useful information for problem solving and decision information for problem solving and decision making.making.

– Understand the functions of different types of Understand the functions of different types of information systems and how levels within an information systems and how levels within an organization are served by different organization are served by different information systems.information systems.

33

Learning ObjectivesLearning Objectives

– Understand how telecommunications and Understand how telecommunications and database technology can help implement the database technology can help implement the goals of information systems.goals of information systems.

– Recognize the role of information technology in Recognize the role of information technology in e-commerce.e-commerce.

– Know how to evaluate information systems and Know how to evaluate information systems and their roles in organizations.their roles in organizations.

– Be able to identify major ethical and societal Be able to identify major ethical and societal conflicts created by widespread use of conflicts created by widespread use of information systems.information systems.

44

Information SystemsInformation Systems

Why Do People Need Information?Why Do People Need Information?

– Individuals - Entertainment and Individuals - Entertainment and enlightenmentenlightenment

– Businesses - Decision making and Businesses - Decision making and problem solvingproblem solving

GatheringGathering

StoringStoring

ManipulatingManipulating

55

Data vs. InformationData vs. Information

– DataData A “given,” or fact: a number, a statement, or a A “given,” or fact: a number, a statement, or a

picturepicture

The raw materials in the production of The raw materials in the production of informationinformation

– InformationInformation Data that have meaning within a contextData that have meaning within a context

Raw data or data that have been manipulatedRaw data or data that have been manipulated

Data, Information, and Data, Information, and SystemsSystems

66

Data ManipulationData Manipulation

– Example: customer surveyExample: customer survey Reading through data collected from a Reading through data collected from a

customer survey with questions in customer survey with questions in various categories would be time-various categories would be time-consuming and not very helpful.consuming and not very helpful.

When manipulated, the surveys may When manipulated, the surveys may provide useful information.provide useful information.


77

Generating InformationGenerating Information

– Computer-based ISs take data as raw material, Computer-based ISs take data as raw material, process it, and produce information as output.process it, and produce information as output.

Figure 1.1 Input-process-output

Input, Process, OutputInput, Process, Output

88

Information needs to be:Information needs to be:

– RelevantRelevant

– CompleteComplete

– AccurateAccurate

– CurrentCurrent

– EconomicalEconomical

Information in ContextInformation in Context

99

What is a System?What is a System?

System: A set of components that work System: A set of components that work together to achieve a common goaltogether to achieve a common goal

Subsystem: One part of a system where Subsystem: One part of a system where the products of more than one system the products of more than one system are combined to reach an ultimate goalare combined to reach an ultimate goal

Closed system: Stand-alone system that Closed system: Stand-alone system that has no contact with other systemshas no contact with other systems

Open system: System that interfaces Open system: System that interfaces with other systemswith other systems

1010


Figure 1.3 Several subsystems make up this corporate accounting system.

1111

Figure 1.4 Farmington High School is one subsystem within the Farmington school system.


1212

Information and ManagersInformation and Managers

– Systems thinkingSystems thinking

Creates a framework for problem Creates a framework for problem solving and decision making.solving and decision making.

Keeps managers focused on overall Keeps managers focused on overall goals and operations of business.goals and operations of business.


1313

The Benefits of Human-Computer The Benefits of Human-Computer SynergySynergy

– SynergySynergy When combined resources produce output When combined resources produce output

that exceeds the sum of the outputs of that exceeds the sum of the outputs of the same resources employed separatelythe same resources employed separately

– Allows human thought to be translated Allows human thought to be translated into efficient processing of large into efficient processing of large amounts of dataamounts of data


1414

Figure 1.5 Qualities of humans and computers that contribute to synergy

Humans vs. ComputersHumans vs. Computers

1515

In an organization, an In an organization, an information systems information systems

consists of:consists of: DataData

HardwareHardware

SoftwareSoftware

TelecommunicationsTelecommunications

PeoplePeople

ProceduresProcedures

1616

Compenents of an ISCompenents of an IS

Figure 1.6 Components of an information system

1717

Input: Data are collected and entered Input: Data are collected and entered into computer.into computer.

Data processing: Data are manipulated Data processing: Data are manipulated into information using mathematical, into information using mathematical, statistical, and other tools.statistical, and other tools.

Output: Information is displayed or Output: Information is displayed or presented.presented.

Storage: Data and information are Storage: Data and information are maintained for later use.maintained for later use.

The Four Stages of The Four Stages of ProcessingProcessing

1818


Computer Equipment for Computer Equipment for Information SystemInformation System– Input devices introduce data into the IS.Input devices introduce data into the IS.

– The computer processes data through the IS.The computer processes data through the IS.

– Output devices display information.Output devices display information.

– Storage devices store data and information.Storage devices store data and information.

1919

Figure 1.7 Input-process-output-storage devices


2020

Transaction Processing Systems (TPS)Transaction Processing Systems (TPS)

– Record data and perform basic processingRecord data and perform basic processing Cash registers and ATMsCash registers and ATMs

Management Information Systems (MIS)Management Information Systems (MIS)

– Use recorded transactions and other data Use recorded transactions and other data to produce information for problem solving to produce information for problem solving and decision making.and decision making.

ISs From Recording ISs From Recording Transactions to Providing Transactions to Providing

Expertise Expertise

2121

Types of MISsTypes of MISs

– On-demand OutputOn-demand Output Managers can obtain reports tailored to Managers can obtain reports tailored to

their needs at any time their needs at any time

– Decision Support Systems (DSS)Decision Support Systems (DSS) Contain models, or formulas, that Contain models, or formulas, that

manipulate data into informationmanipulate data into information

Often answer “what if?” questionsOften answer “what if?” questions

Group Decision Support Systems (GDSS) Group Decision Support Systems (GDSS) help groups generate ideas, establish help groups generate ideas, establish priorities, and reach decisionspriorities, and reach decisions


Expertise Expertise

2222


Expertise Expertise – Executive Information Systems (EIS)Executive Information Systems (EIS)

Can gather information from vast amounts Can gather information from vast amounts of data for high-level executivesof data for high-level executives

Highly useful in control and planningHighly useful in control and planning

– Expert Systems (ES)Expert Systems (ES) Programmed with human expertiseProgrammed with human expertise

Can help solve problems of unstructured Can help solve problems of unstructured naturenature

2323

– Geographic Information Systems Geographic Information Systems (GISS)(GISS) Represents local conditions or featuresRepresents local conditions or features

Allows planning, decision-making, and Allows planning, decision-making, and monitoring of local conditions or monitoring of local conditions or activitiesactivities


Expertise Expertise

2424

Information Systems in Information Systems in BusinessBusiness

ISs in Functional Business AreasISs in Functional Business Areas

– AccountingAccounting Record business transactions, produce periodic Record business transactions, produce periodic

financial statements, and create reports required financial statements, and create reports required by lawby law

– FinanceFinance Organize budgets, manage the flow of cash, Organize budgets, manage the flow of cash,

analyze investments, and make decisions that analyze investments, and make decisions that could reduce interest payments and increase could reduce interest payments and increase revenuesrevenues

2525


– Marketing Marketing Analyze demand for various products in Analyze demand for various products in

different regions and population groupsdifferent regions and population groups

– Human ResourcesHuman Resources Help with record keeping and employee Help with record keeping and employee

evaluationevaluation

2626


ISs in Different Business SectorsISs in Different Business Sectors

– ManufacturingManufacturing Allocate resources such as personnel, raw Allocate resources such as personnel, raw

material, and timematerial, and time

Control inventory, process customer Control inventory, process customer orders, prepare production schedules, orders, prepare production schedules, perform quality assurance, and prepare perform quality assurance, and prepare shipping documentsshipping documents

2727


– ServiceService

ISs are often the backbone of service ISs are often the backbone of service organizationsorganizations

– RetailRetail

Some retail stores (e.g., Wal-Mart, Kmart) Some retail stores (e.g., Wal-Mart, Kmart) now linked to communication networks now linked to communication networks by satellite.by satellite.

Management can determine which items Management can determine which items move quickly and which do not.move quickly and which do not.

2828


– New BusinessesNew Businesses

ISs have made new products and services ISs have made new products and services possible, such as credit reports and possible, such as credit reports and shipment tracking.shipment tracking.

– GovernmentGovernment

Tax authorities, national insurance and Tax authorities, national insurance and welfare agencies, defense departments, welfare agencies, defense departments, economic organizations, immigration economic organizations, immigration authorities. authorities.

2929

Shared Data ResourcesShared Data Resources

Most effective way to operate: different Most effective way to operate: different systems share same data from same systems share same data from same poolpool

Company’s database: one of the most Company’s database: one of the most powerful resources powerful resources

Categorized and structured data can be Categorized and structured data can be manipulated to produce useful manipulated to produce useful informationinformation

3030


Figure 1.8 Computer-based databases are an important resource for any organization

3131


Figure 1.9 Generalized concept of organization information systems

3232

E-CommerceE-Commerce

E-CommerceE-Commerce

– Business-to-business and business-to-Business-to-business and business-to-consumer transactions take place in consumer transactions take place in electronic form via computer electronic form via computer networks.networks.

– Database management online makes Database management online makes information cheaper to distribute.information cheaper to distribute.

– E-commerce is now synonymous with E-commerce is now synonymous with “doing business on the Internet.”“doing business on the Internet.”

3333

Why Study IS?Why Study IS? Knowledge WorkersKnowledge Workers

– Employers seek computer-literate professionals who Employers seek computer-literate professionals who know how to use information technology.know how to use information technology.

Degrees in ISDegrees in IS– Computer Science or Management Information Computer Science or Management Information

SystemsSystems

Information Systems CareersInformation Systems Careers– Systems analysts, Webmaster and database Systems analysts, Webmaster and database

administrator administrator Systems analysts may later choose from various pathsSystems analysts may later choose from various paths

– specialist in enterprise resource planning (ERP) systems, specialist in enterprise resource planning (ERP) systems, database administrator, telecommunications specialist, database administrator, telecommunications specialist, consulting, etc.consulting, etc.

3434

Ethical and Societal IssuesEthical and Societal IssuesThe Not-So-Bright SideThe Not-So-Bright Side

Consumer PrivacyConsumer Privacy

– Organizations collect (and Organizations collect (and sometimes sell) huge amounts of sometimes sell) huge amounts of data on individuals.data on individuals.

Employee PrivacyEmployee Privacy

– IT supports remote monitoring of IT supports remote monitoring of employees, violating privacy and employees, violating privacy and creating stress.creating stress.

3535

Ethical and Societal IssuesEthical and Societal IssuesThe Not-So-Bright SideThe Not-So-Bright Side

Freedom of SpeechFreedom of Speech– IT increases opportunities for pornography, hate IT increases opportunities for pornography, hate

speech, intellectual property crime, and other speech, intellectual property crime, and other intrusions; prevention may abridge free speech. intrusions; prevention may abridge free speech.

IT ProfessionalismIT Professionalism– No mandatory or enforced code of ethics for IT No mandatory or enforced code of ethics for IT

professionals--unlike other professions. professionals--unlike other professions.

Social InequalitySocial Inequality– Less than 20% of the world’s population have ever Less than 20% of the world’s population have ever

used a PC; less than 3% have Internet access. used a PC; less than 3% have Internet access.

Documents

1 Chapter 1 Business Information Systems: An Overview