Tonga Institute of Higher Education
IT 245
Management Information Systems
Lecture 2
Part 1
Foundation Concepts
Information Systems and Technology
Outcomes!
• At the end of this Chapter you should be able to:– Explain why knowledge of IS is important
– Identify 5 areas of IS knowledge they need
– Provide examples to show how E-Business, ECommerce or enterprise collaboration systems could
support firms business processes, managerial decision
making and strategies for competitive advantage.
– Provide examples of the component of the real world IS
– Provide examples of several major types of IS
– Identify challenges that a business manager might face
in managing successful business.
Why IS and IT are Important?
• Same intention for any other subject
• IS & IT including E-Business and ECommerce technology and application) are
vital component of a successful business
and organizations.
• Thus constitute an essential field of study in
Business administration and management.
IT 245 a Business or an IT Course?
You need to know…
• IT & IS help all kinds of Businesses
improve the efficiency and effectiveness of
their business processes, managerial
decision making, workgroup collaboration
and strengthen their competitive positions
in a rapidly changing marketplace.
Try Real World Case 1
Kepler’s Books and Magazines:
Small Business Bricks – and Clicks
Strategies.
IS Knowledge &
Business
Professionals
• Foundation Concepts: Fundamental
behavior, technical, business, and
managerial concepts about components
and roles of IS.
• Development Process: How business
professional and information specialist
plan, develop. and implement IS to meet
E-Business opportunities using several
strategic planning and application
development approaches.
• Management Challenges: Challenges
of effectively and ethically managing EBusiness technologies, strategies, and
security at the end user, enterprise and
global level of business.
• Information Technologies: Major
concept developments and management
issues in IT.
What is an IS & IT
• (1) An IS -is a set of people,
procedures, and resources
that collects, transforms
and disseminates
information in an
organization. (2) A system
that accepts data resources
as input and processes
them into information
products as output.
• An IT -are Hardware, software,
telecommunications, database
management, and other
information processing
technologies used in
computer-based information
systems.
System Concepts
• Understanding System Concepts helps us to understand
many other Concepts:• Technology: That computer networks are systems of
information processing components that use a variety of
hardware, software, data and telecommunication
technologies.
• Applications: That electronic business and commerce
applications involve interconnected business information
systems
• Development: That developing ways to use information
technologies in business includes designing the basic
components of IS
• Management: That managing IT emphasizes the quality,
strategic business values, and security of an organization’s
IS.
System Concepts
• What is a System?
– (1) A group of interrelated or interacting elements
forming a unified whole.
– (2) A group of interrelated components working together
toward a common goal by accepting inputs and
producing outputs in an organized transformation
process.
• Sometimes called dynamic system and has 3 basic interacting
components or functions. (input, process, output)
– (3) An assembly of methods, procedures, or techniques
unified by regulated interaction to form an organized
whole.
– (4) An organized collection of people, machines, and
methods required to accomplish a set of specific
functions.
System Examples
Example 1
A manufacturing system accepts raw materials as
input and produces finished goods as output.
An information system is a system that accepts
resources (data) as input and processes them
into products (information) as output. A business
organization is a system where economic
resources are transformed by various business
processes into goods and services.
Feedback and Control
• System Concept become more useful by including
two additional components:– Feedback : is data about the performance of a system.
– Control: involves monitoring and evaluating feedback to
determine whether a system is moving toward the
achievement of its goal.
The control function then makes necessary adjustments
to a system’s input and processing components to
ensure that it produces proper output.
• A system with feedback and control components is
sometimes called a Cybernetic System (selfmonitoring, self-regulating system.)
Cybernetic System Example
• A thermostat controlled heating system. –
automatically monitors and regulates itself to
maintain a desired temperature.
• Human body automatically monitors and adjusts
many of its functions.
• Computers in some Business monitor and
control manufacturing processes.
Other System Characteristics
• Systems do not exists in vacuum, rather it exist
and function in environment containing other
systems.
• If component of a large system then it is a
subsystem.
• System may connected to one another by means
of a shared boundary or interface.
• A system that interacts with other systems in its
environment is called open system.
• A system that has the ability to change itself or its
environment in order to survive is an adaptive
system.
Example.
• Organizations such as business and government
agencies are good examples of systems in society,
which is their environment. Society contain a
multitude of such systems, including individuals and
their social, political, and economic institutions.
Organizations themselves consist of many
subsystems such as departments, divisions,
process teams, and other workgroups.
Organizations are examples of open systems
because they interface and interact with other
systems in their environment, Finally, organizations
are examples of adaptive systems, since they can
modify themselves to meet the demands of a
changing world.
Stakeholders in the Business Environment.
• A business is an example of an
organizational system where
economic resources (input) are
transformed by various
business processes
(processing) into goods and
services (output)
• Information systems provide
information (feedback) on the
operations of the system to
management of the direction
and maintenance of the system
(Control) as it exchanges
inputs and outputs with its
environment.
Components of an Information System.
An information system depends
on the resources of people
(end users and IS specialist),
hardware (machines and
media), software (program
and procedures), data (data
and knowledge bases) and
networks (communications
media and network support)
to perform input, processing,
output, storage and control
activities that convert data
resources into information
products.
Information System Resources
• Information System consists of five major
resources.
• People: required for the operation of all information
systems. These people include End User and IT
Specialists.
– End users – also called clients are people who use an
information system or the information it produces..
– IS Specialist – are people who develop and operate
information system.
• Hardware Resources – include all physical devices
and materials used in information processing. (it
includes not only machines such as computers and
other equipment, but also all data media, that is
tangible objects on which data are recorded, from
sheets of papers to magnetic or optical disks.
Information System Resources
• Software Resources – includes all set of
information processing instructions (OS
Application or Procedures)
• Data Resources – are the raw materials
of information systems. Data constitute
valuable organizational resources and it
must be manage effectively to benefit all
end users in an organization.
Information System Resources
• Network Resources :- includes all
telecommunications technologies and networks.
(like Internet, intranets and extranets.
– Communication Media – physical components such as
twisted pair wires, cables, fiber-optic cables, microwaves,
cellular and satellites wireless technologies
– Network Support – include people and all of the
hardware, software, and data technologies that directly
support the operations and use of a communication
network.
Data versus Information
• People uses the terms Data and information
interchangeably.
• Data - data are raw material resources that are
processed into finished information products.
– the plural of datum which are raw fact or observations
about physical phenomena or business transactions. Data
are objective measurements of the attributes (the
characteristics) of entities (such as peoples. places,
things, and events).
• Information – are data that have been converted
into meaningful and useful context for specific end
users.
Information System Activities
•
•
•
•
•
•
Input of Data Resources
Processing of Data into information
Output of Information Products
Information Quality
Storage of Data Resources
Control of System Performance.
Recognizing Information System
• As Business professional you should be able to
recognize the fundamental components of
information Systems you encounter with in the
real world.
– The people, hardware, software, data, and network
resources they used.
– The types of information products they produce.
– The way they perform input, processing, output,
storage, and control activities.
• With these kind of understanding, you will be a
better user, developer, and manager of
information systems.
Summary Part 1
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Why IS and IT are Important?
IS Knowledge & Business Professionals
What is an IS & IT
System Concepts
Feedback and Control
Cybernetic System
Stakeholders in the Business Environment.
Components of an Information System
Information System Resources
Data versus Information
Information System Activities
Recognizing Information System.
Part 2
Foundation Concepts 2
Business Applications,
Development and Management
Roles of IS Applications in Business
• Support of its
strategies for
competitive
advantages.
• Support of
decision
making by its
employees
and managers
• Support of its
business
processes and
operations
Real World Case 2
Discuss Real world Case 2
CNET, Oxygen Media, USA Networks, and
Dell Computer: Business Lessons of ECommerce Warriors
Trends in Information Systems
• IS expand significantly over the years
– EDP – Electronic Data Processing
– MIS – Management Information System
– DSS – Decision Support Systems
– EIS – Executive Information Systems
– ES – Expert Systems
– SIS – Strategic Information Systems
– Electronic Business and Commerce
Expanding Roles of Business Applications of IS
•
See how the
roles of
computer
based
information
systems
have
expanded
over time.
•
Note the
impact of
these
changes on
the end
users and
managers of
an
organization
E-Business
• What is an E-Business?
– the use of Internet technologies to internetwork and empower business processes,
electronic commerce, and enterprise
communication and collaboration within a
company and with its customers, suppliers,
and other business stakeholders.
E-Business Enterprise
• Business are becoming E-Business
Enterprises
– Internet - network of networks
– Intranet – Internet-like network within an
organization.
– Extranet – A network that links selected
resources of a company with its customers,
suppliers, and other business partners, using the
Internet or private networks to link the
organization’s intranets.
• An E-Business
enterprise depends
on the Internet,
intranets and
extranets to :– Reengineer and
revitalize internal
business
processes
– Implement
electronic
commerce systems
among businesses
and their
customers and
suppliers
– Promote enterprise
collaboration
among business
teams and
workgroup.
The E-Commerce applications of some top-rated companies.
E-Commerce Site
Markets
Types of Products
Amazon.com
B2C
Physical Goods : books, music, videos, toys,
electronic, etc
Services: Auctions, gifts services
eBay.com
C2C, B2C
Services: Auction specialist
Etrade
B2C, B2B
Information Content : stock quotes,
investment information
Services: Financial services
B2B – Business-to-Business
B2C – Business-to-consumer
C2C – Consumer-to-consumer
Notice the range of products and
services they offer to their online
customers.
Exercise: Find some other examples of E-Commerce applications from the
web. (one for each E-commerce type)
Type of Information System
• The application of information systems in the real world
can be classified in several different ways
• Operations and management – main purpose to support business
operations and managerial decision making
Operation Support System
• Transaction Processing Systems:- Process
data resulting from business transactions,
update operational databases, and produce
business documents such as sales, inventory
and accounting systems.
• Process Control System:- Monitor and control
Industrial Processes. Eg. Petroleum refining,
power generation, and steel production systems.
• Enterprise Collaboration Systems:- Support
team, workgroup and enterprise communication
and collaboration. Eg. E-mail, chat, and video
conferencing.
Manager Support Systems
• Management Information Systems:- Provide information in
the form of prespecified reports and displays to support
business decision making. Eg, sales analysis, production
performance and cost trend reporting systems
• Decision Support Systems:- Provide interactive ad hoc
support for the decision-making processes of managers and
other business professionals. Eg. Product pricing,
profitability forecasting and risk analysis systems.
• Executive Information Systems:- Provide critical
information from many sources tailored to the information
needs of executives. Eg. System for Easy analyses of
business performance, action of competitors, and economic
developments to support strategic planning.
Task For You!!!
• There are other Categories of IS as it will
be mention later, and I would like you to
define those Categories.
• We will discuss your solution in our next
class.
Other Classification of IS
• Expert Systems:• Knowledge Management Systems:• Functional Business Systems:• Strategic Information Systems:-
Developing Business/ IT Solutions
• Developing
information
systems
solutions to
business
problems
can be
viewed as a
multi-steps
process or
cycle
Success and Failure with IT
• Computer-based information systems
heavily dependent on information
technologies - are designed, operated and
used by people in a variety of organizational
settings and business environment.
Success and Failure with IT
• Success mainly measured by its efficiency
– In terms of minimizing costs, times and the use of
information resources.
• Success should also be measured by the
effectiveness of information technology
– in supporting an organization’s business strategies,
enabling its business processes, enhancing its
organizational structures and culture, and increasing
the customer and business values of the enterprise.
Success and Failure with IT
• On the other hand – it is important to
realize that IT & IS can be mismanaged
and misapplied so that IS performance
problems lead to both technological and
business failure.
Global Business Environment
Inter-network IS & IT
must be managed to
support E-Business
Strategies,
processes and
Organizational
structures and
Cultures to increase
the customer and
business value of an
E-Business
enterprise in a
dynamic global
business
environment.
Ethics and IT
• Managers, Business Professionals and
knowledge worker should consider the ethical
responsibilities generated by the use of IT.
– Eg
improper, irresponsible or harmful to other
individuals or to society
• What is the proper use of the internet?
• What does it takes to be a responsible end user of IT?
• How can you protect yourself from computer crime and other
risks of IT?...
Ethics and IT
Challenges of IT Careers
• IT & IS have created interesting, highly
paid and challenging career opportunities
for many people.
• Organizations continue to expand their
use of information technology – creating
different IT related careers
The IS Function
• Successful management of IS and IT presents major
challenges to business managers and professional thus IS
functions represents:– A major functional area of business that is as important to business
success as the functions of accounting, finance, operations
management, marketing, and human resources management.
– An important contributor to operational efficiency, employee
productivity and morale, and customer service and satisfaction.
– A major source of information and support needed to promote
effective decision making by managers and business professionals.
– A vital ingredient in developing competitive products and services
that give an organization a strategic advantage in the global
marketplace.
– A dynamic, rewarding, and challenging career opportunity for millions
of men and women.
– A key component of the resources, infrastructure, and capabilities of
to day's E-Business enterprises.
Summary
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Roles of IS Applications in Business
Trends in Information Systems
E-Business Enterprises
The E-Commerce applications
Type of Information System
Other Classification of IS
Developing Business/ IT Solutions
Success and Failure with IT
Global Business Environment
Ethics and IT
Challenges of IT Careers
The IS Function