Information Systems Defined
Information System: Combination of hardware, software, and telecom leveraged by
human capital to transform data into information, and then knowledge.
 We transform data to press strategic advantage
Data: The Root and Purpose of Information Systems:
Data
Information
465889727
465-88-9727
Unformatted
Formatted
Meaning: ???
Meaning: SSN



Knowledge
465-88-9727 John Doe
Data Relationships
SSN Unique Person
Data is analyzed and processed into information
Where there is an ability to understand the information and make decisions
using it, it becomes knowledge.
What is the benefit of transforming data this way?
Components of Information Systems
 People
 Telecommunications
 Hardware
 Data
 Software
Three Types of Systems To Transform Data
 Automated Office Systems
o Communication tools within the firm
 Transaction Processing Systems
o Used to facilitate the interaction between the firm and itself, and
upstream or downstream partners
 Management Information Systems
o Sorted TPS information which facilitates managerial decision making
What Is The Role of the Knowledge Worker?
 These data and software fit into a system; they do not exist in a vacuum
o What is their value?
 Provide insight on tacit or explicit knowledge; evaluate
what information is out there.
 The information contained in an IS can be leveraged by a firm
or individual
 IS professionals find the leverage point
Three Methods of Exploiting This Information
 Technical Competency
o Knowledge and skill about hardware, software, networking, and
security; the “nuts and bolts”
 Business Competency
o Understanding market forces and how the firm presses strategic
advantage
 Ex: Porter’s Puzzle
 Systems Competency
o The integration of technical and business competency
 Carr’s Argument: “IT Doesn’t Matter”; As information technology becomes
more persuasive, it becomes more standardized and more of a commodity
than necessity. He felt companies should focus on using IT strictly on cost
reduction and risk mitigation and that using this for competitive advantage is
futile.
o IT has become the cost of doing business
 What Carr misses: his argument is strictly about business;
it has nothing to do with IT itself
 IT Success V. IT Failure
o There are risks associated with making business gambles
 Branding and Differentiation in Service
 Imitation Cannot Be Stopped
o Preposterous to the point of utter absurdity
Types of Technology
 Infrastructure
o Ubiquitous building
o Standardized
 Commoditized
o Everyone has it
o It becomes inexpensive and provides lower margins
o Becomes the cost of doing business (electricity)
 Propriety
o Possessed by few
o Provides advantage
 Ex: Frito-Lay ERP
Why Is The Advantage Fleeing?
 Two reasons:
1. Because technology happens in phases
2. Because strategy is a multi-period game
Suggestions by Carr
 Spend less- Returns are higher for those who invest sparingly
 Follow, Don’t Lead- Let others take the risk of the bleeding edge

Focus on vulnerabilities
What We Want”
 Porter’s Puzzle
Customers
Substitutes
Internal
Suppliers
Entrants

Carr asserts that IT provides temporal advantage
IS Ethics
Illegal and unethical are not synonymous!
Computer Ethics
 Issues and standards of conduct pertaining to the use of information systems
Information Privacy
 Concerned with what information an individual should have to reveal to
others in the work place or through transactions, such as online shopping
 Companies seem to know about our every move-how much information do
we need to reveal?
o Ex: Amazon.com is famous for personalization
Information
Privacy
Information
Accessability
Information
Systems
Ethics
Information
Accuracy
Information
Property
The Need For a Code of Ethical Conduct: Computer Ethics Institute Guidelines
 These guidelines prohibit things such as:
o Using the computer to hard others
o Interfering with the computing work of others
o Snooping through people’s files
o Using a computer to steal
o Copying or using proprietary software without paying for it
o Appropriating other people’s intellectual property
 These guidelines recommend:
o Review social consequences of programs and systems you design
o Use computers in ways that show consideration for others
The Digital Divide
 Many people are being left behind in the information age
o Strong linkage between computer literacy and a person’s ability to
compete in the information age
o People in rural communities, the elderly, people with disabilities, and
minorities lag behind the nation averages for Internet access and
computer literacy
o The challenges in overcoming the digital divide are even greater in
developing countries
 Consider the prospect of job search without the internet
 Consider the competitive advantage you have