Introduction to Business
Information Systems
by
James Norrie, Mark Huber, Craig Piercy,
And Patrick McKeown
Chapter 1
IT for Business and
Business Professionals
Copyright 2010 John Wiley & Sons
Canada, Ltd.
What We Will Cover
•
•
•
•
•
Why IS matters
What Is an Information System?
What’s in IT for Me?
What’s in IT for an Organization?
What’s in IT for Society?
Copyright 2010 John Wiley & Sons Canada, Ltd.
Student ROI (Return on Investment)
Your investment of time and effort in this
course will result in your being able to
answer these questions:
1. What is an information system?
2. Why is the study of IT so important to any future
business professional?
3. What are the most common types of information
systems in businesses?
Copyright 2010 John Wiley & Sons Canada, Ltd.
Welcome!
o We want to prepare you for your
future as a business professional
o Business and information first, then IT!
o What we do with IT to create business
value is usually more important than
the IT itself!
Copyright 2010 John Wiley & Sons Canada, Ltd.
Why IS Matters
o Organizations and individuals must keep up with
rapid technology changes or risk becoming
obsolete
o Rate of technology change is greater today than
ever before and it will be more important to keep
up with those changes
o Information technology, as a part of any IS,
impacts all business disciplines (accounting,
marketing, etc.)
o In today's work environment it’s impossible to do
knowledge work without technology
Copyright 2010 John Wiley & Sons Canada, Ltd.
Figure 1.1 Moore’s Law
Figure 1.1 Moore's Law illustrates the rate of change in technology capability over time, and the
resulting effect on cost
Source: Intel Corporation.
Copyright 2010 John Wiley & Sons Canada, Ltd.
What Is an Information System (IS)?
o An information system (IS) is an
organized collection of people,
information, business processes, and
information technology (IT), designed to
transform inputs into outputs, in order to
achieve a goal
o Information systems enhance knowledge,
work, decision making, problem solving,
communication, and coordination
Copyright 2010 John Wiley & Sons Canada, Ltd.
IPO Model of an Information System
Copyright 2010 John Wiley & Sons Canada, Ltd.
Information System Components
Concept
Definition
Input
Items entered into a system to transform them
into outputs
Process
A series of one or more steps used by a
business to transform inputs into outputs
Output
The end result of a process. Information is the
result of the transformation (processing) of
data. From an organizational perspective, the
output of a process is a product or a service
Data
Raw, unorganized facts
Information
Processed/organized/transformed data that is
useful to a person
Knowledge
Information plus human experience and
judgment
Copyright 2010 John Wiley & Sons Canada, Ltd.
Information System Components
(Continued)
Concept
Definition
System
A recognizable whole that consists of a
collection of interrelated parts that interact
with each other to transform inputs into
outputs to achieve a goal
People
People or organizations that have both an
interest in and an influence on the creation,
implementation, or operation of an IS
Information
Technology
The physical components, typically hardware,
software, and connectivity, that make up an
IS. Technology enables processes to perform
the steps they were designed to accomplish
Copyright 2010 John Wiley & Sons Canada, Ltd.
Information System Components
(Continued)
Concept
Definition
Decision
A choice made from one or more alternatives
to follow or avoid some course of action
Business
Value
A positive return on the investment of
resources that is created through the effective
and efficient integration of an organization’s
people, information, information technology,
and business processes
Copyright 2010 John Wiley & Sons Canada, Ltd.
What is Information Technology (IT)?
o Information technology (IT) is a
collection of tools – hardware,
software, and connectivity – that
enable individuals or businesses to
achieve their goals
Copyright 2010 John Wiley & Sons Canada, Ltd.
The Productivity Zone
o Created at the intersection of
people, process and technology
o Incorporates elements of human
design to accommodate how people
will use the system
o Combines all three of these
elements allowing for superior
productivity and a competitive
advantage
Copyright 2010 John Wiley & Sons Canada, Ltd.
The Productivity Zone
The productivity zone occurs at the intersection of people, processes, and technology. A
successful IS system integrates all three of these components to create business value
Figure 1.3
Copyright 2010 John Wiley & Sons Canada, Ltd.
The Internet
o The most widely used component of the
Internet is the World Wide Web, which
allows us to transfer text, images, audio,
and video, as well as giving us new ways
of buying and selling goods—that is,
carrying out commerce in the global
marketplace
o Commerce using computer networks is
known as e-commerce, which is the use
of information systems, technologies, and
computer networks by individuals and
organizations to create business value
Copyright 2010 John Wiley & Sons Canada, Ltd.
What’s in IT for Me?
o IT knowledge can be a key
contributor to your success both
personally and professionally
o Using technology allows you to be
more efficient and effective thereby
becoming more productive
o IT is fundamental for your career
o Provides a major source of
entertainment and enjoyment
Copyright 2010 John Wiley & Sons Canada, Ltd.
What’s in IT for an Organization?
For our purposes, a business is an
organization with one or more people who:
● decide on common goals to pursue
● work together to locate and organize
resources
● create processes to achieve the
desired goal or goals
One of the most important factors
influencing a business is the business
environment
Copyright 2010 John Wiley & Sons Canada, Ltd.
The Business Environment
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Types of IS Found in Business
º There are a number of types of IS that
are widely used in creating business
value:
● Transaction Processing Systems (TPS)
● Management Information Systems
(MIS)
● Decision Support Systems (DSS)
● Enterprise Resource Planning (ERP)
Systems
● Customer Relationship Management
(CRM) Systems
Copyright 2010 John Wiley & Sons Canada, Ltd.
Transaction Processing Systems


What do they do? Capture and process
transactions to make them available to
the organization
How does this create business value?
It enables a business to efficiently and
accurately track the transactions that are
at the heart of all business activities.
Captured transaction data can then be
used to support decision making
Copyright 2010 John Wiley & Sons Canada, Ltd.
Management Information Systems


What do they do? Provide timely
information to decision makers through
processing and reporting features
How does this create business value?
Timely reporting can enable managers to
monitor critical processes and avoid costly
mistakes
Copyright 2010 John Wiley & Sons Canada, Ltd.
Decision Support Systems
o What do they do? Provide analytical and
visualization tools to support and enhance
decision making
o How does this create business value?
It enables decision makers to make
decisions based on data and to discover
new business opportunities through the
use of tools provided by the IS
Copyright 2010 John Wiley & Sons Canada, Ltd.
Enterprise Resource Planning Systems


What do they do? Integrate and
standardize processes and centralize and
standardize the storage and management
of data
How does this create business value?
This can reduce costs associated with
duplication of processes and effort. It can
also reduce decision-making mistakes
made because of multiple versions of the
same data, information, and knowledge
Copyright 2010 John Wiley & Sons Canada, Ltd.
Customer Relationship
Management Systems
o What do they do? Integrate data
collection, transformation, storage, and
analysis of customer transaction data,
including purchases, service requests,
and other forms of customer contact
o How does this create business value?
This greatly increases understanding of
customers’ purchasing and service
behaviours and needs. It facilitates timely
and proactive management of customers
Copyright 2010 John Wiley & Sons Canada, Ltd.
Table 1.3
Input
Sales records are gathered at point of sale (POS),
when a product's bar code is scanned.
Process
The data are added to a sales database table and removed
from an available inventory database table.
Output
The product is sold.
Data
$19.95
Information
1 medium, white, Concordia University T-shirt, $19.95,
Sept. 9, 2010, 4:06 p.m.
Knowledge
Customers who purchased white Concordia University Tshirts were also likely to purchase Concordia University
beer mugs.
Copyright 2010 John Wiley & Sons Canada, Ltd.
System
As part of the TPS, the POS bar code reader allows
for a sale to take place by managing the sale's
inventory. The payment module enables the customer
to purchase the T-shirt using a credit card.
People
The clerks in the university bookstore have been trained
on the system and are able to serve customers efficiently.
IT
The POS hardware (the bar code reader) uses software to
read data that are then input into inventory databases, the
accounting system, and banks through network
connectivity.
Decision
Move the beer mugs closer to the T-shirts to encourage
cross-selling of products during the first weeks of
September.
Business
Value
More beer mugs and T-shirts were sold in the month of
September as students and their parents arrived for the
start of the school year.
Copyright 2010 John Wiley & Sons Canada, Ltd.
What’s in IT for Society?
Globalization means that modern
businesses are using information technology
to:
 expand their market to customers
around the globe
 find the lowest-cost suppliers,
regardless of location
 create 24-hour business days by
shuttling work across time zones and
nations.
Copyright 2010 John Wiley & Sons Canada, Ltd.
What’s in IT for Society?



Much of globalization is built around the
Internet, which is simply a large number
of cooperating computer networks that
use the same rules for sending messages
Information and communications
technology is a major contributor to the
economy of the world in all industries
IT is critical to the success of business
around the globe
Copyright 2010 John Wiley & Sons Canada, Ltd.
What’s in IT for Society?
Figure 1.5 Distribution of GDP at Basic Prices by ICT Industry, 2010
Source: Information and Communications Technologies Statistical Overview, Information and Communications
Technologies Branch Spectrum, Information Technologies and Telecommunications Sector, Industry Canada,
updated April 2009.
Copyright 2010 John Wiley & Sons Canada, Ltd.
What in IT for Society?
Figure 1.6 Indexed Growth in GDP at Basic Prices for the ICT Sector and the Canadian Economy, 2002–2010
Source: Information and Communications Technologies Statistical Overview, Information and Communications
Technologies Branch Spectrum, Information Technologies and Telecommunications Sector, Industry Canada,
updated April 2009.
Copyright 2010 John Wiley & Sons Canada, Ltd.
Conclusion



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The ICT industry is large and has
significant impact globally
The trend of technology
intensification has a social impact
The “great digital divide: is a very
real social concern
Government and social agencies
around the world are wresting with
these and other issues
Copyright 2010 John Wiley & Sons Canada, Ltd.
Copyright
Copyright © 2010 John Wiley & Sons Canada,
Ltd.
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Copyright 2010 John Wiley & Sons Canada, Ltd.