Chapter 1
Foundations of Information
Systems in Business
Content
• Information Systems in Business
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What Is an Information System?
The Fundamental Roles of IS in Business
Trends in Information Systems
The Role of e-Business in Business
Types of Information Systems
Managerial Challenges of Information Technology
• The Components of Information Systems
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What Is a System?
Components of Information Systems
Information System Resources
Information System Activities
Information Systems in Business
• What Is an Information System? can be any organized combination of
people, hardware, software, communications networks, data resources,
and policies and procedures that stores, retrieves, transforms, and
disseminates information in an organization.
• Example of IS:
– Smoke signals for communication: The pattern of smoke transmitted valuable
information to others who were too far to see or hear the sender.
– Card catalogs in a library are designed to store data about the books in an
organized manner that allows readers to locate a particular book by its title,
author name, subject, or a variety of other approaches.
– The cash register at your favorite fast-food restaurant is part of a large
information system that tracks the products sold, the time of a sale, inventory
level, and the amount of money in the cash drawer.
– A paper-based accounting ledger as used before the advent of computerbased accounting systems is an iconic example of an information system.
– Your book bag, day planner, notebooks, and file folders are all part of an
information system designed to help you organize the inputs provided to you
via handouts, lectures, presentations, and discussions.
A framework that outlines the major areas of information
systems knowledge needed by business professionals
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Foundation Concepts: Fundamental behavioral,
technical, business, and managerial concepts
about the components and roles of information
systems.
Information Technologies: Major concepts,
developments, and management issues in
information technology(hardware, software,
networks, data management, and many Internetbased technologies)
Business Applications: The major uses of
information systems for the operations,
management, and competitive advantage of a
business.
Development Processes: How business
professionals and information specialists plan,
develop, and implement information systems to
meet business opportunities.
Management Challenges: The challenges of
effectively and ethically managing information
technology at the end-user, enterprise, and
global levels of a business.
The Fundamental Roles of IS in Business
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Support of business processes and
operations: most retail stores now use
it.
computer-based information systems to
help their employees record customer
purchases, keep track of inventory, pay
employees, buy new merchandise, and
evaluate sales trends.
Support of decision making by
employees and managers: Information
systems also help store managers and
other business professionals make
better decisions.
Support of strategies for competitive
advantage: gaining a strategic
advantage over competitors requires
the innovative application of
information technologies(e-commerce
Web site).
Trends in Information Systems
ERP
2000s–2010s
E-Comerce
1990s–2000s
EIS, AI, ES,SIS
1980s–990s
DSS
1970s–980s
MIS
1960s–970s
EDS
1950s–960s
The Role of e-Business in Business
• e-business is the use of
Internet technologies to
work and empower business
processes(online exchange
of value).
• Enterprise collaboration
systems involve the use of
software tools to support
communication,
coordination, and
collaboration among the
members of networked
teams and workgroups(use
intranets, Internet,
extranets).
Types of Information Systems
Transaction processing systems: Process data resulting from business transactions, update
operational databases, and produce business documents.
Process control systems: Monitor and control industrial processes. Ex petroleum refining
Enterprise collaboration systems: Support team, workgroup, and enterprise communications
and collaborations. Ex e-mail, chat, and videoconferencing groupware systems
Managerial Challenges of Information Technology
Developing IS Solutions
Challenges and Ethics of IT
What Is a System?
• System is a set of interrelated components, with a clearly defined
boundary, working together to achieve a common set of objectives by
accepting inputs and producing outputs in an organized transformation
process.
• The basic functions of system:
– Input involves capturing and assembling elements that enter the system to be
processed.
– Processing involves transformation processes that convert input into output.
– Output involves transferring elements that have been produced by a
transformation process to their ultimate destination.
– Subsystem is a system that is a component of large system.
• To make system more useful we need include two elements are Feedback
and Control is called a cybernetic.
– Feedback is data about the performance of a system. For example, data about
sales performance are feedback to a sales manager.
– Control involves monitoring and evaluating feedback to determine whether a
system is moving toward the achievement of its goal.
A common cybernetic system is a
home temperature control system
A business is an example of
an organizational system in
which economic resources
(input) are transformed by
various business processes
(processing) into goods
and services (output).
Information systems
provide information
(feedback) about the
operations of the system
to management for the
direction and maintenance
of the system (control) as it
exchanges inputs and
outputs with its
environment.
Components of Information Systems
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People, hardware, software, data, and
networks are the five basic resources of
information systems.
People resources include end users and IS
specialists, hardware resources consist of
machines and media, software resources
include both programs and procedures,
data resources include data and knowledge
bases, and network resources include
communications media and networks.
Data resources are transformed by
information processing activities into a
variety of information products for end
users.
Information processing consists of the
system activities of input, processing,
output, storage, and control.
Information System Resources
• People Resources: People are the essential ingredient for the
successful operation of all information systems(End users, IS
specialists).
• Hardware Resources: It includes all physical devices and materials
used in information processing(Computer systems, Computer
peripherals).
• Software Resources: includes all sets of information processing
instructions(System software, Application software, Procedures).
• Data Resources: The concept of data as an organizational resource
has resulted in a variety of changes in the modern organization.
• Network Resources: communications technologies and networks
are fundamental resource components of all information
systems(Communications media, Network infrastructure).
Information System Activities
• Input of Data Resources: takes the form of data entry activities
such as recording and editing.
• Processing of Data into Information: refer to analyze, and
manipulate data, thus converting them into information for end
users.
• Output of Information Products: Information in various forms is
transmitted to end users and made available to them in the output
activity.
• Storage of Data Resources: Storage is the information system
activity in which data are retained in an organized manner for later
use.
• Control of System Performance: feedback must be monitored and
evaluated to determine whether the system is meeting established
performance standards.