An Introduction to Information
Systems in Organizations
Chapter 1
Fundamentals of Information
Systems, Second Edition
1
Principles and Learning Objectives
• The value of information is directly linked
to how it helps decision makers achieve
the organization’s goals.
– Distinguish data from information and
describe the characteristics used to evaluate
the quality of data.
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Systems, Second Edition
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Principles and Learning Objectives
• Knowing the potential impact of information
systems and having the ability to put this
knowledge to work can result in a successful
personal career, organizations that reach their
goals, and a society with a higher quality of life.
– Identify the basic types of business information
systems and discuss who uses them, how they are
used, and what kinds of benefits they deliver.
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Systems, Second Edition
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Principles and Learning Objectives
• System users, business managers, and
information systems professionals must work
together to build a successful information
system.
– Identify the major steps of the systems development
process and state the goal of each.
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Systems, Second Edition
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Principles and Learning Objectives
• The use of information systems to add value to
the organization can also give an organization a
competitive advantage.
– Identify the value-added processes in the supply
chain and describe the role of information systems
within them.
– Identify some of the strategies employed to lower
costs or improve service.
– Define the term competitive advantage and discuss
how organizations are using information systems to
gain such an advantage.
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Systems, Second Edition
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Principles and Learning Objectives
• Information systems personnel are the key to
unlocking the potential of any new or modified
system.
– Define the types of roles, functions, and careers
available in information systems.
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Systems, Second Edition
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Information Concepts
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Systems, Second Edition
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Information System
• A set of interrelated components that collect,
manipulate & disseminate data & information &
provide feedback to meet an objective.
• Examples: ATMs; airline reservation systems;
course reservation systems
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Systems, Second Edition
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Data vs. Information
• Data: raw facts
• Information: collection of facts organized in
such a way that they have value beyond the
facts themselves
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Systems, Second Edition
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The Process of Transforming Data into
Information
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Systems, Second Edition
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Characteristics of Valuable Information
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Systems, Second Edition
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The Components of an Information
System
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Systems, Second Edition
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Computer-Based
Information Systems (CBIS)
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Systems, Second Edition
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Components of a CBIS
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Systems, Second Edition
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Components of a CBIS
• Hardware - computer equipment used to perform input, processing,
and output activities.
• Software - computer programs that govern the operation of the
computer.
• Database - an organized collection of facts and information, typically
consisting of two or more related data files.
• People - the most important element in most computer-based
information systems.
• Procedures - include the strategies, policies, methods, and rules for
using the CBIS.
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Systems, Second Edition
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Telecommunications, Network, and the
Internet
• Telecommunications - the electronic
transmission of signals for communications.
• Networks - used to connect computers and
computer equipment in a building, around the
country, or around the world to enable electronic
communications.
• Internet - the world’s largest computer network,
actually consisting of thousands of
interconnected networks
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Systems, Second Edition
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Business Information
Systems
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Systems, Second Edition
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Business Information Systems
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Electronic Commerce
Transaction Processing Systems and ERP
Information and Decision Support Systems
Special-Purpose Business Information Systems: Artificial
Intelligence, Expert Systems, and Virtual Reality
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Systems, Second Edition
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E-Commerce
• Business-to-business
• Business-to-consumer
• Consumer-to-consumer
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Systems, Second Edition
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E-Commerce Greatly Simplifies the
Purchasing Process
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Systems, Second Edition
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Transaction Processing Systems
and ERP
• Transaction processing system (TPS) - an organized
collection of people, procedures, software, databases,
and devices used to record completed business
transactions.
• Enterprise Resource Planning (ERP) System - a set
of integrated programs capable of managing a
company’s vital business operations for an entire
multisite, global organization.
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Systems, Second Edition
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A Payroll Transaction Processing
System
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Systems, Second Edition
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Functional Management Information Systems Draw
Data from the Organization’s TPS
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Systems, Second Edition
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Decision Support Systems (DSS)
An organized collection of people, procedures,
software, databases, and devices used to
support problem-specific decision making.
– The focus of a DSS is on decision-making
effectiveness.
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Systems, Second Edition
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Essential DSS Elements
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Systems, Second Edition
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Special-Purpose Business Information
Systems
• Artificial intelligence (AI) systems
• Virtual reality systems
• Expert systems
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Systems, Second Edition
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The Major Elements of Artificial
Intelligence
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Systems, Second Edition
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A Head-Mounted Display
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Systems, Second Edition
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Data Glove
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Systems, Second Edition
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Systems Development
The activity of creating or modifying existing
business systems.
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Systems Investigation
Systems Analysis
Systems Design
Systems Implementation
Systems Maintenance and Review
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Systems, Second Edition
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Organizations and
Information Systems
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Systems, Second Edition
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A General Model of an Organization
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Systems, Second Edition
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The Value Chain of a Manufacturing
Company
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Systems, Second Edition
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Technology Diffusion, Infusion, and
Acceptance
• Technology Diffusion - a measure of how widely
technology is spread throughout an organization.
• Technology Infusion - is the extent to which technology
permeates an area or department.
• Technology Acceptance Model (TAM) - specifies the
factors that can lead to higher acceptance and usage of
technology in an organization
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Systems, Second Edition
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Competitive Advantage
A significant and (ideally) long-term benefit to a
company over its competition.
• Factors That Lead Firms to Seek Competitive
Advantage
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Rivalry among Existing Competitors
Threat of New Entrants
Threat of Substitute Products and Services
Bargaining Power of Customers and Suppliers
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Systems, Second Edition
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Strategic Planning for Competitive
Advantage
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Altering the Industry Structure
Creating New Products and Services
Improving Existing Product Lines and Services
Using Information Systems for Strategic
Purposes
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Systems, Second Edition
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Competitive Advantage Factors and Strategies
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Systems, Second Edition
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Performance-Based Information Systems
• Productivity
• Quality
• Return on Investment and the Value of
Information Systems
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Earnings Growth
Market Share
Customer Awareness and Satisfaction
Total Cost of Ownership
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Systems, Second Edition
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Three Stages in the Business Use of IS
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Systems, Second Edition
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The 10 Best Places to Work for IS
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Systems, Second Edition
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Roles, Functions, and Careers in the
Information Systems Department
• Operations
• Systems Development
• Support
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Systems, Second Edition
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The Three Primary Responsibilities of Information
Systems
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Systems, Second Edition
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Typical IS Titles and Functions
• The Chief Information Officer
• LAN Administrators
• Internet Careers
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Systems, Second Edition
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Why Learn About Information
Systems?
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Advance in your career
Solve problems
Realize opportunities
Meet your career goals
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Systems, Second Edition
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Summary
• Data - raw facts
• Information - data transformed into a
meaningful form
• Systems development - creating or modifying
existing business systems
• Organization - a formal collection of people and
various other resources established to
accomplish a set of goals
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Systems, Second Edition
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