Chapter 1

Information Systems Overview

Chapter Objectives

• Understand the term “information system” (IS),

• Describe the evolution of computing,

• Explain the technology, people, and organizational components of an IS

• Discuss how IS can be used to automate, informate, and strategically support business

• Describe IS’ critical, strategic importance to the success of modern organizations

InformationSystems

Software

Hardware Telecommunications

Data People

The Components of an Information System

Information Systems Defined

Information systems are combinations of

hardware, software, and telecommunications networks

which

people build and use

to

collect, create, and distribute useful data,

typically in

organizational settings.

Rapid Rise in the Development and Use of Technology

• The computer industry is characterized by rapid change

• The field has a high growth rate and vast revenues

• Technology is widely covered in both popular and business press

• Technology is critical to businesses today

IS Past and Present

• The evolution in computing

• IS today

• Technology side of IS

• People side of IS

• Organizational side of IS

The Evolution in Computing

• Mainframe era - 1950 to 1970

• Mini-computer era - 1960 to 1980

• Personal computing era - 1975 to 1985

• Interpersonal computing era - 1985 to 1990

• Internetworking era - 1990’s

IS Today

• Encompasses a diverse range of computing and networking technologies

• Includes a variety of network capabilities• Includes a wide variety of peripherals• Allows users more responsibility for

management of the technology• Has increased professionalism of IS

positions

The Technology Side of IS

• Technology– Any mechanical and/or electrical means to

supplement or replace manual operations

• Information technology (IT)– Any use of machine technology that is

controlled by or uses information

• Information systems (IS) is a subset of IT

The People Side of IS

• Those who develop, maintain, use, manage, and study information systems– IS professionals in organizations– IS consultants– Professors– Researchers

The Organizational Side of IS

• IS used by all types of organizations– Professional– Social– Religious– Educational– Governmental

Dual Nature of Information Systems

• An Information System Gone Awry: Denver International Airport

• An Information System that Works: Federal Express

Information Systems for Competitive Advantage

• Systems can be developed with a strategic intent

• To gain or sustain a competitive advantage

IS for Automating: The First Step

• View technology as a way to continue doing the same things

• Use technology to automate existing tasks

• Early stages of IS focused on automating

IS for Informating: The Second Step

• View technology as a vehicle for organizational learning

• Use technology to provide information about operations

• Use technology to help detect problems with processes

• Use of technology without informating can make a bad process worse

IS as Strategic Enabler:The Final Step

• View technology as an enabler of organizational strategy

• Use technology to conduct strategic planning for an organization

• IS used to achieve organizational strategies

OverallLow-cost

LeadershipStrategy

BroadDifferentiation

Strategy

Lower cost Differentiation

FocusedLow-costStrategy

A Broad Rangeof Buyers

Marketwide

A ParticularBuyer Segmentor Market Niche

FocusedDifferentiation

Strategy

Type of CompetitiveAdvantage Being Pursued

Best-costproviderstrategy

Five Organizational StrategiesM

ark

et T

arge

t

Sources of Competitive Advantage

• Have the best product on the market• Deliver superior customer service• Achieve lower costs than rivals• Have a proprietary technology• Have shorter lead times to new products• Have a well-known brand name • Provide customers more value for their

money

IS and Value Chain Analysis

• Value chain analysis– Studying an organization’s activities to

determine where value is added to a product or service

• Provides opportunities to add value to an organization

An Organizational Value Chain

PurchasedSuppliesInboundLogistics

Operations

Product R&D, Technology, and Systems Development

Human Resources Management

General Administration

OutboundLogistics

Sales andMarketing Service

The Role of Information Systems in Value Chain Analysis

• Automate activities along the value chain

• Improve the front end of the value chain– Electronic Data Interchange (EDI)

• Improve the back end of the value chain– Service after the sale

The Technology/Strategy Fit

• Choose an IS that automates, informates, and matches the strategic plan

• Need two strategic plans tightly coupled– One for the overall organization– One for the Information System

• Make every technology decision a strategic decision