Chapter 1
Introduction to
Information Systems
Cases on Information systems

American airlines
creating new businesses

Baxter company
competitive advantage

Mrs. Fields
organizational consequences

Open Market
fast evolution: business risk
IS and IS resources
Management
Challenges
Business
Information
applications Information technologies
systems
Development
processes
O’Brien p7-8
Foundation
concepts
PEOPLE
Software
Data
Information
Systems
Resources
Hardware
Networks
The importance of Information Systems

An information system is a set of people , procedures
and resources that:
collect
transform
disseminates
information in an organization.

Information is used for better management

Companies cannot operate any more without
automated information systems
O’Brien p 7-8
Properties of Information Systems
Enterprise Perspective






major functional area of business
important cost that poses a resource
management problem
important factor for efficiency, productivity,
customer service and satisfaction
source of management information and support
important ingredient in strategic advantage and
competitive position
vital , dynamic , and challenging career
opportunity
O’Brien p 10
Properties of Information Systems
Enterprise Perspective


Worldwide information Society
Knowledge workers
Information


create
use
dissiminate
Use information technology to manage people,
finances, material, energy, …
Ethical aspects
social aspects: have - have not
privacy aspects: supermarket
O’Brien p 8
Ethical considerations
Applications of ICT
• Improve market
knowledge
• Improve
response
capabilities
• Improve
persuasive
communications
• Improve
strategy
selection
O’Brien p 9
Potential harms
• Infrigements on
privacy
• Inaccurate
information
• Collusion
• Exclusion from
essential
facilities
Potential risks
How likely are
legal actions,
consumer boy
-cotts, strikes,
other threats to
occur
Possible responses
•
•
•
•
•
•
self-regulation
Advocacy
Education
Codes of ethics
Incentives
certification
The Role of Information Systems
Support
of Strategic
Advantage
Support of
Managerial
Decision Making
Support of
Business Operations
O’Brien p 11
The Internetwork- enterprises
The Internet
Intranets
Extranets
Enterprise
Intranets
Intranets
Supplier
Client
Intranets
Electronic Commerce
Other Organizations
Business Process Reengineering

Before

Today
 managers took all
decisions
 everybody can take
decisions
 only experts can do
complex jobs
 a generalist can do the
work of an expert based on
available information
 information is available on
only one specific place
 information is available for
everybody at the same
moment in time
 Collaborators in the field
need an office to receive,
store, consult and send
information
 collaborators can send
and receive information
from everywhere
O’Brien p 16
Information Systems
Information Systems Knowledge needed by
managerial end users
Management
of IS
Resources and activities
Development of IS
Solutions to business problems
Applications of IS
To operations management and strategic advantage
Technology of IS
Hardware , software , Telecommunications, and Data Management
Foundation concepts of IS
Fundamental Behavioral and Technical Aspects
The System Concept
O’Brien 18 -19
System:
A group of interrelated components or
interacting elements forming a unified whole.
input
processing
output
feedback
control
O’Brien p 21
}
- environment
- other systems
Other System Concepts

Subsystem

Interface

Open System

Adaptive system
O’Brien p 23
Stakeholders in the Business
Environment
Competitors
Suppliers
Management
Customers
The community
Control
Feedback
Economic
Resources:
People
Money
Material
Land
Facilities
Energy
Information
Input
Financial Institutions
O’Brien p 24
Organizational
Processes:
Production
Marketing
Finance
Personnel
Other Processes
PROCESSING
Goods and
Services:
Products
Services
Payments
Contributions
Information
Other Effects
Output
Labor Unions
Stockholders
Government Agencies
Information Systems
Components of an Information System
O’Brien 21 - 25
Control of System Performance
Input of
Processing
Output of
Data
Data into
Information
Communications
media
and
network
support
Resources
Information
Products
Storage of Data resources
O’Brien p 25
Communications media and network support
Network resources
IS Resources and Products
People Resources
Specialists: system analysts, programmers, operators
End users : anyone else using the system
Hardware Resources
Machines: computers, video monitors, disks, printers, scanners
Media: floppies, tapes, disks, plastic cards, paper forms, ...
Software Resources system, application, procedures
Programs: OS , spreadsheet programs, payroll programs , ....
Procedures: data entry, error correction, paycheck distribution, ...
Data Resources database, model base, knowledge base
Product descriptions, customer records, inventory databases,...
Network resources
Communication media, network support, ...
O’Brien p 26-27
Data versus Information

Data
raw facts or observations
meaningless
time independent
machine efficient
general purpose

O’Brien 24
Information
 informative value
 time dependent
 human efficient
 specific
 based on previous
knowledge
Different types of information can be derived from
the same source of data .
Expanding Roles of Information Systems
O’Brien 28
1950s-1960s:
Data Processing
 electronic data processing systems
transaction processing, record keeping, traditional accounting
1960s-1970s:
Management reporting
 Management Information Systems
mgt. reports for pre-specified information to support decision making
1970s-1980s:
Decision Support
 Decision Support Systems
Interactive ad hoc support of the managerial decision process
Expanding Roles of Information Systems (cont)

1980s-1990s:
Strategic and End User Support
 End User Computing Systems: direct productivity support
 Executive Information Systems:Critical Information
 Expert Systems: Knowledge based expert advise for end users
 Strategic Information Systems: for competitive advantage

1990s – 2000s : Global internetworking
 Internetworked information systems
 for end-user, enterprise, and inter-organizational computing,
collaboration, including global operations and management on
the internet and other interconnected enterprise and global
networks.
O’Brien p 31
Types of Information Systems
O’Brien 29
Information System
Operations
Information
Systems
Transaction
Processing
Systems
O’Brien p 32-33
Process
Control
Systems
Management
Information
Systems
Office
Automation
Systems
Information
Reporting
Systems
Decision
Support
Systems
Executive
Information
Systems
IT - usage in the Company
Nolan curve
Four stages of DP growth:
maturity
control
contagion
initiation
NOLAN phases
Stage
orientation
organization
Initiation
contagion
control
cost reductionnew functions moratorium
where first useddispersed
manager
operations
manager
management viewlax
central
maturity
database inquiry
controlled distributed
middle managermiddle managerdirector
selling
controlling
a resource
applications
supporting
diversification databases
end-user computing
control
little
very little
strong
normal
PC's
project groups transparent
user involvementinterviews ,
manuals
Information systems in the Company
Marketing
Production
Finances
Personel
sales
production
planning
budgetting
human resources
marketing
purchasing
general ledger
payroll
promotion
distribution
billing
cost estimations
price setting
engineering
analytical
bookkeeping
applications
new products
operations
financial
operations
contracts
orders
stock
management
A/C payable
training
quality control
A/C receivable
Electronic Banking







account status
exchange rates
economic information
bank transfers
order checks
reports
batch payments ( SWIFT, ...)
Security via magnetic cards, password , control totals
Decision Support








financial models
what-if analyze
goal seeking
risk analysis
statistical analysis
management models
graphical representations
personal databases
Hospital Information Systems










patient registration
laboratory management
radiology
medical files
pharmacy
stock management and purchasing
human resources and scheduling
billing and A/C receivable
book keeping
operation theater
Other Applications

Transport
just in time
routing
shipping

Insurance

Tourism

Department stores