Chapter 01: An Introduction to Information Systems Stair, Reynolds and Chesney: Principles of Business Information Systems, Fourth edition (9781473774605) © Cengage Learning 2021 Principles • The value of information is directly linked to how it helps decision makers achieve the organization’s goals • Computers and information systems are constantly making it possible for organizations to improve the way they conduct business • 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 • System users, business managers, and information systems professionals must work together to build a successful information system • Information systems must be applied thoughtfully and carefully so that society, business, and industry can reap their enormous benefits For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Defining an Information System 1 What is a system? • A system is a set of elements or components that interact to accomplish goals • Systems have inputs, processing mechanisms, outputs, and feedback • A system processes the input to create the output • Examples of systems are everywhere – an automatic car wash, the heating in a building, the human body; you should be able to think of many more For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Defining an Information System 2 What is information? • Information is a collection of facts (Processed data) • It can take many forms – text, numbers, images, audio clips and video clips are all examples • A closely related term is data • These two terms are often used interchangeably For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Defining an Information System 3 Therefore… • an information system (IS) is a set of interrelated components that collect (input), manipulate & store (process), and disseminate (output) information, and provide a feedback mechanism to meet an objective • In information systems, input is the activity of gathering and capturing data • Processing means converting or transforming this input into useful outputs • Output involves producing useful information, usually in the form of documents and reports • Feedback is information from the system that is used to make changes to input or processing activities For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning The Characteristics of Valuable Information To be useful to managers, information should have some or possibly all of the following characteristics (Pg 9): Accessible Complete Flexible Reliable Simple Verifiable Accurate Economical Relevant Secure Timely For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Self-Test Questions 1. What are two characteristics of valuable information? 2. Which type of data includes noises, sounds, or tones? 3. Name some other formats for information. 4. Name the essential elements of a system. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Self-Test Answers 1. What are two characteristics of valuable information? ANSWER: Accessible, accurate, complete, economical, flexible, relevant, reliable, secure, simple, timely, and verifiable 2. Which type of data includes noises, sounds, or tones? ANSWER: Audio data 3. Name some other formats for information. ANSWER: Video and text 4. Name the essential elements of a system. ANSWER: Input, processing, output and feedback For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Manual and Computerized Information Systems • An information system can be manual, for example paper-based, or computerized • A computer-based information system (CBIS) is a single set of hardware, software, databases, telecommunications, people, and procedures that are configured to collect, manipulate, store, and process data into information For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Hardware • Hardware consists of computer equipment used to perform input, processing, and output activities • Input devices include keyboards, mice and other pointing devices, automatic scanning devices, and equipment that can read magnetic ink characters • Processing devices include computer chips that contain the central processing unit and main memory • Output devices include computer screens and printers • Storage devices • Communication (internal/external) For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Software • Software consists of the computer programs that govern the operation of the computer • There are two types of software*: System software controls basic computer operations, including start-up, input and output. An example is Microsoft Windows Applications software allows you to accomplish specific tasks, including word processing and drawing charts. An example is Microsoft Excel For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Databases • A database is an organized collection of facts and information, typically consisting of two or more related data files • An organization’s database can contain information on customers, employees, inventory, competitors’ sales, online purchases, and much more o Rows - Records o Columns – Attributes For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Telecommunications, Networks, and the Internet • Telecommunication is the electronic transmission of signals for communications, which enables organizations to carry out their processes and tasks through computer networks • Networks connect computers and equipment in a building, around the country, or around the world to enable electronic communication (LAN, WAN, MAN) • The Internet is the world’s largest computer network, actually consisting of thousands of interconnected networks, all freely exchanging information For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning People • People are the most important element in most computer-based information systems • The people involved include users of the system and information systems personnel, including all the people who manage, run, program, and maintain the system For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Procedures • Procedures include the strategies, policies, methods, and rules for using the CBIS, including the operation, maintenance, and security of the computer • Good procedures can help companies take advantage of new opportunities and avoid potential disasters • Poorly developed and inadequately implemented procedures can cause people to waste their time or result in inadequate responses to disasters For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Business Information Systems • The most common types of information systems used in business organizations are those designed for electronic and mobile commerce, transaction processing, management information, and decision support* • These systems help employees in organizations accomplish routine and special tasks • They are often integrated in one product and delivered by the same software package • For example, some enterprise resource planning packages process transactions, deliver information, and support decisions For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Electronic and Mobile Commerce • E-commerce involves any business transaction executed electronically • Some types of e-commerce are: – B2B (business-to-business): commerce between companies – B2C (business-to-consumer, B2C): commerce between companies and consumers – C2C (consumer-to-consumer): commerce between consumers and other consumers • B2B represents the major volume of e-commerce, and its fastestgrowing segment • Mobile commerce (m-commerce) refers to transactions conducted anywhere, anytime • M-commerce relies on wireless communications that managers and corporations use to place orders and conduct business with handheld computers, portable phones, laptop computers connected to a network, and other mobile devices For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Enterprise Resource Planning • An enterprise resource planning (ERP) system is a set of integrated programs that manage the vital business operations for an entire multi-site, global organization • The scope of an ERP system might vary from company to company • An ERP might do the job of some or all of the other types of Business Information Systems, particularly the Transaction Processing System, Management Information System and Decision Support System • They are used to schedule inventory purchases and the manufacturing process, so that the right number of products are built at the right time, to meet customer demand For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Transaction Processing Systems • A Transaction Processing System is an ‘Operational System’ • Operational systems help organizations perform and integrate important tasks, such as paying employees and suppliers, controlling inventory, sending out invoices, and ordering supplies • A transaction processing system (TPS) is an organized collection of people, procedures, software, databases, and devices used to record completed business transactions • A transaction is any business-related exchange such as payments to employees, sales to customers, or payments to suppliers For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Management Information Systems • A management information system (MIS) is an organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers (e.g., running out stock) • An MIS focuses on operational efficiency • The output of a TPS is the input to a MIS • MIS typically provide standard reports generated with data and information from the TPS For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Decision Support System • A decision support system (DSS) is an organized collection of people, procedures, software, databases, and devices that support problem-specific decision-making • A human being is still in charge of making the decision, unlike in a system with Artificial Intelligence (Q) • Decision support systems are used when the problem is complex and the information needed to make the best decision is difficult to obtain and use (Q) For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Specialized Business Information Systems • Knowledge management systems (KMS): an organized collection of people, procedures, software, databases, and devices to create, store, share, and use the organization’s knowledge and experience • Artificial Intelligence: attempts to have the computer system take on the characteristics of human intelligence. Applications include robotics and natural language processing • Virtual reality: simulation of a real or imagined environment that can be experienced visually in three dimensions (10 Best Examples of Virtual Reality by Bernard Marr https://www.youtube.com/watch?v=zcEFGV7JT18) For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Systems Development Systems development is the activity of creating or modifying business systems. The main stages are as follows: – Systems investigation, where a clear understanding of the problem to be solved is developed – Systems analysis, where the problems and opportunities of the existing system are defined – Systems design, which determines how the new system will work to meet the business needs defined during systems analysis – Systems implementation, which involves creating or acquiring the various system components (hardware, software, databases, etc.) defined in the design step, assembling them, and putting the new system into operation – Systems maintenance and review checks and modifies the system so that it continues to meet changing business needs For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Security, Privacy, and Ethical Issues • Security and privacy fears persist with computer users • Many people experience ‘cyberbullying’ at home, school or work • Many criminal gangs are trying to steal financial information online • Some IS professionals believe that computers may create new opportunities for unethical behaviour – unethical investors have placed false rumours or incorrect information about a company on the Internet and tried to influence its stock price to make money • To protect against these and other threats, security and control measures can be installed For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Security and control measures • Firewalls • Anti virus software • Password protection • Physical protection – a security guard outside the room where the servers are located for instance • Security procedures – users must change passwords every month, for instance For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Global Challenges in IS 1 Changes in society as a result of increased international trade and cultural exchange, often called globalization, has always had a big impact on organizations and their information systems: • Cultural challenges: countries and regional areas have their own cultures • Language challenges • Time and distance challenges • Infrastructure challenges: high-quality electricity and water might not be available in certain parts of the world. Telephone services, Internet connections, and skilled employees might be expensive or not readily available • Currency challenges: the value of different currencies can vary significantly over time, making international trade more difficult and complex For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Global Challenges in IS 2 • Product and service challenges: traditional products that are physical or tangible, such as a car or bicycle, can be difficult to deliver to the global market • Technology transfer issues: most governments don’t allow certain military-related equipment and systems to be sold to some countries. • National laws: all countries have a set of laws that must be obeyed by citizens and organizations operating in the country. Laws restricting how data enters or exits a country are often called trans-border dataflow laws. Keeping track of these laws and incorporating them into the procedures and computer systems of multinational and trans-national organizations can be very difficult and time consuming, requiring expert legal advice • Trade agreements: countries often enter into trade agreements with each other For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Summary • Information: collection of facts organized in such a way that they have value beyond the facts themselves • System: a set of elements that interact to accomplish a goal • Components of an information system: input, processing, output, and feedback For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Summary (continued) • Computer-based information system (CBIS): a single set of hardware, software, databases, telecommunications, people, and procedures that are configured to collect, manipulate, store, and process data into information • Transaction processing system (TPS): an organized collection of people, procedures, software, databases, and devices used to record completed business transactions For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Summary (continued) • Management information system (MIS): an organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers • Decision support system (DSS): an organized collection of people, procedures, software, databases, and devices used to support problem-specific decision making • Systems development: creating or modifying existing business systems For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning
