Chapter One

Fundamentals of Information
Systems

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 What is information System?
 Information System is the integrated concepts of information and
system.
 Information: An organized, meaningful, and useful interpretation of data
 A system is a set of elements or components that interact to accomplish goals

 Information system (IS) is a set of interrelated elements that collect

(input), manipulate (process), store, disseminate (output) data and
information and provide a corrective reaction (feedback mechanism) to
meet an objective.

 IS Feedback mechanism is critical for helping organizations

 To monitor and control its operation and to make sure it continues to meet its
goals and objectives.
 For increasing profits or improving customer service.

 Therefore, an information system a set of interrelated components of

information and system to support decision making, coordination,
control, analysis, and visualization of various organizational activities.
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 What is a System?

• A set of elements or components that interact to

accomplish goals.
• A system’s four components consist of input,
processing, output, and feedback.
 Why Learn about Information Systems?

• Information itself has real value, and in order to stay competitive,

organizations require a steady flow of information about their business
partners, competitors, customers, employees, markets, and suppliers.
• Information systems are increasingly being used to gather, store, digest,
analyze, and make sense out of all information.
• Using information systems,
• individuals communicate instantaneously with one another;
• consumers make purchases online using mobile devices;
• members dispersed globally & across multiple organizations collaborate
effectively;
• financial institutions manage billions of dollars in assets around the world;
• manufacturers partner with suppliers and customers to track inventory, order
supplies, and distribute goods faster than ever before.
• To change businesses, increase profit and the way we live.
• To rework every aspect of organizations from product and service creation
through production, delivery, and customer service.
• To participate in and lead all innovations, & creating a job opportunities.
• Therefore , the ability to recognize and capitalize on IS opportunities can
make you an even more valuable member of your organization and will
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ultimately help advance your career.
 Data, Information, and Knowledge
 Data is a prerequisite to information which represents unorganized and
unprocessed facts
• It consists of raw facts, such as an employee number, total hours worked in a
week, an inventory part number, etc
• It can be transformed based on rules and relationships to organize data so it
becomes useful, valuable information.
• It can be Alphanumeric data , Audio data, Image data, and video data
• Information is a collection of data organized and processed so that it
has additional value beyond the value of the individual facts. Eg. the
total sales for the month.
 Turning data into information is known as a process, or a set of
logically related tasks performed to achieve a defined outcome.
 The process of defining relationships among data to create
useful information requires knowledge, which is the awareness
and understanding of a set of information and the ways in which
that information can be made useful to support a specific task or
reach a decision.
 In other words, information is essentially data made more useful
through the application of knowledge. 5
 The Value of Information

• The value of information is directly linked to how it

helps decision makers achieve their organization’s goals.

• Valuable information which can help people perform tasks

more efficiently and effectively.

• Many businesses assume that reports are based on correct,

quality information, but, unfortunately, that is not always
true.

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 Characteristics of Quality Information
 Fundamental to the quality of a decision is the quality of the
information used to reach that decision.
 The importance of each characteristics varies depending on the
situation and the kind of decision you are trying to make

• Reliable
• Secure
• Simple
• Timely
• Verifiable

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 Characteristics of Quality Information
• Accessible: Information should be easily accessible by authorized users so
they can obtain it in the right format and at the right time to meet their
needs.
• Accurate: Information is error free.
• Complete: information contains all the important facts.
• Economical: It should be relatively economical to produce. Decision
makers must always balance the value of information with the cost of
producing it.
• Flexible: information should be used for a variety of purposes
• Relevant: It should be relevant that is important to the decision maker
• Reliable: it should be trusted by users. In many cases, the reliability of the
information depends on the reliability of the data-collection method means
it depends on the source of the information.
• Secure: Information should be secure from access by unauthorized users
• Simple: It should be simple, not complex, Sophisticated and detailed
information might not be needed.
• Timely: information should be delivered when it is needed
• Verifiable: It should be verifiable. This means that you can check it to
make sure it is correct, perhaps by checking many sources for the same
information
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 What Is Computer-Based Information System?

• A computer-based information system (CBIS) is a single

set of hardware, software, databases, networks, people, and
procedures that are configured to collect, manipulate,
store, and process data into information.
• The components of a CBIS are part of a business’s technology
infrastructure which includes hardware, software, databases,
networks, people, and procedures .
• An organization’s technology infrastructure includes all the
hardware, software, databases, networks, people, and
procedures that are configured to collect, manipulate, store,
and process data into information.
• The technology infrastructure is a set of shared IS resources
that form the foundation of each computer-based information
system.

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 Components of Computer Based Information System(CBIS)
• Hardware: computer equipment used to perform input, processing, storing and
output activities
• Software: the computer programs that govern the operation of the computer
• Database: Organized collection of facts and information, typically consisting of
two or more related data files
• People: The most important element in most CBIS .
• IS personnel include all the people who manage, run, program, and maintain
the system, including the chief information officer (CIO), who leads the IS
organization.
• End users are people who work directly with information systems to get
results. They include financial executives, marketing representatives, and
manufacturing line operators.
• Procedures: defines the steps to follow to achieve a specific end result, such
as enter a customer order, pay a supplier invoice, or request a current
inventory report. Include strategies, policies, methods, and rules for using the
CBIS
• Telecommunications, Network and internet
• Networks: Connect computers and equipment to enable electronic communication
• Internet : World’s largest computer network, consisting of thousands of
interconnected networks, all freely exchanging information
• Intranet: Internal network that allows people within an organization to exchange
information and work on projects
• Extranet: Network that allows selected outsiders, such as business partners and
customers, to access authorized resources of a company’s intranet 10
 Fundamental Types of Information Systems
• Most organizations have a number of different information
systems. When considering the role of business managers in
working with IS, it is useful to divide information systems into three
types:
• Personal IS
• Group IS, and
• Enterprise IS.
• Personal IS includes information systems that improve the productivity of
individual users in performing stand-alone tasks. Examples include
personal productivity software, such as word-processing, presentation,
and spreadsheet.
• Group IS includes information systems that improve communications and
supports collaboration among members of a workgroup. Examples include
Web conferencing software, wikis, and electronic corporate directories.
• Enterprise IS includes information systems that organizations use to
define structured interactions among their own employees and/or with external
customers, suppliers, government agencies, and other business partners.
Three examples of enterprise IS are transaction processing, enterprise,
and inter organizational systems. 11
Examples and characteristics of each type of information system

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 Business Information Systems(BIS)
• Most common types of information systems those designed for –
• Electronic and mobile commerce,
• Transaction processing(TPS),
• Management information(MIS), and
• Decision support (DSS)

The development of BIS

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 Electronic and Mobile Commerce
• E-commerce : is Any business transaction executed electronically
between:
• Companies (business-to-business, B2B)
• Companies and consumers (business-to-consumer, B2C)
• Consumers and other consumers (consumer-to-consumer(C2C)
• Business and the public sector
• Consumers and the public sector
• Mobile commerce (m-commerce):The use of mobile, wireless devices
to place orders and conduct business
• E-commerce: Can enhance a company’s stock prices and market value
• Electronic business (e-business): Uses information systems and the
Internet to perform all business-related tasks and functions

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 Transaction Processing Systems and
Enterprise Resource Planning

• Transaction: Any business-related exchange, such as payments to

employees and sales to customers
• Transaction processing system (TPS): is an organized collection
of people, procedures, software, databases, and devices used to
record completed business transactions
• Enterprise resource planning: Set of integrated programs that
Manages the vital business operations for an entire multisite,
global organization

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 Information and Decision Support Systems
• Management information system (MIS): is an Organized
collection of people, procedures, software, databases, and
devices that Provides routine information to managers and
decision makers
• Decision support system (DSS): is an Organized collection of
people, procedures, software, databases, and devices that support
problem-specific decision making Used when problem is
complex and information needed to determine appropriate action
is difficult to obtain

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 Specialized Business Information Systems

• Knowledge management systems (KMSs): is an

organized collection of people, procedures, software,
databases, and devices to Create, store, share, and use
the organization’s knowledge and experience
• Artificial intelligence (AI): Computer system takes
on characteristics of human intelligence
• Expert systems: Give computer ability to make
suggestions and function like an expert in a particular
field
• Virtual reality: Simulation of a real or imagined
environment that can be experienced visually in three
dimensions
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 Information Systems in Organizations

• Organization: a group of people that is structured

and managed to meet its mission or set of group
goals
• There are relationships between members of the
organization and their various activities
• Processes are defined that assign roles, responsibilities, and
authority to complete the various activities
• Organizations are open systems
• They affect and are affected by their surrounding
environments
Information Systems in Organizations
 Value Chains
• Value chain: a series (chain) of activities that an organization performs to
transform inputs into outputs
• The value of the input is increased
• Supply chain: key value chain in a manufacturing organization
• Supply chain management (SCM): encompasses all the activities
required to get the right product into the right consumer’s hands in the right
quantity at the right time and at the right cost
• Supply chain organizations are “linked” together through both physical
flows and information flows
• Physical: supplies and raw materials
• Information: participants communicating their plans, coordinating their
work, and managing the efficient flow of goods and material
• The information system can play an integral role in the supply chain
process:
• Providing input
• Aiding product transformation
• Producing output
Value Chains
 Change in the Organization
• Innovation: the application of new ideas to the products,
processes, and activities of a firm, leading to increased value
• A catalyst for the growth and success of an organization
• Can lead to cutting-edge products
• New revenue streams
• Increased profits
• Types of innovation
• Sustaining innovation: results in enhancements to existing
products, services, and ways of operating
- Enable an organization to continually increase profits, lower
costs, and gain market share
• Disruptive innovation: one that initially provides a lower level
of performance than the marketplace has grown to accept
- Improved to provide new performance characteristics
Change in the Organization

• Reengineering
• Also called process redesign and business process
reengineering (BPR)
• Involves the radical redesign of business processes,
organizational structures, information systems, and values
of the organization to achieve a breakthrough in business
results
• Continuous improvement
• Constantly seeking ways to improve business processes and
add value to products and services
Change in the Organization
Change in the Organization
 Soft Side of Implementing Change
• Soft side of implementing change: involves work designed
to help employees embrace a new information system and
way of working
• Change management model
• Describes the phases an individual or organization goes through in
making a change
• Provides principles for successful implementation of change
• There are a number of models for dealing with the soft side of
implementing change
• Lewin’s Change Model
• Consists of a three-stage approach for change
1.Unfreezing: preparing for change
2.Moving: making the change
3.Refreezing: institutionalizing
 Soft Side of Implementing Change

• Lewin’s change model consists of a three-stage approach for change

1. Unfreezing: preparing for change
2. Moving: making the change
3. Refreezing: institutionalizing
 Soft Side of Implementing Change

• Lewin’s Force Field Analysis

• Lewin extended his change model theory to include force
field analysis
- Identifies both the driving (positive) and restraining (negative) forces
that influence whether change can occur
• Driving forces: beliefs, expectations, and cultural norms
that tend to encourage a change and give it momentum
• Restraining forces: those that make it difficult to accept a
change or to work to implement a change
Soft Side of Implementing Change
Soft Side of Implementing Change
 Soft Side of Implementing Change

• Leavitt’s Diamond
• A theory that proposes that every organizational system is made
up of four main components—people, tasks, structure, and
technology—with an interaction among the four components
- Any change in one of these elements will necessitate a change
in the other three elements
• Organizational learning
- The adaptations and adjustments based on experience and ideas
over time
- Adjustments can require reengineering or can result from
continuous improvement
Soft Side of Implementing Change
 Soft Side of Implementing Change

• User Satisfaction and Technology Acceptance

• Technology acceptance model (TAM)
- Specifies the factors that can lead to better attitudes about the
information system
 Soft Side of Implementing Change
• Diffusion of Innovation Theory
• A theory developed by E.M. Rogers
• Explains how a new idea or product gains acceptance and
diffuses (or spreads) through a specific population or
subset of an organization
Soft Side of Implementing Change
 Careers in Information Systems
• Successful IS workers must:
• Enjoy working in a fast-paced, dynamic environment
• Meet deadlines and solving unexpected challenges
• Possess good communication skills
• Have solid analytical and decision-making skills
• Develop effective team and leadership skills
• Be adept at implementing organization change
• Be prepared to engage in life-long learning in a rapidly changing field
• Technical skills important for IS workers to have:
• Capability to analyze large amounts of structured and unstructured data
• Ability to design/build applications for mobile devices
• Programing and application development skills
• Technical support expertise
• Project management skills
• Knowledge of networking and cloud computing
• Ability to audit systems and implement necessary security measures
• Web design and development skills
• Knowledge of data center operations
 Careers in Information Systems
• Roles, Functions, and Careers in IS
• In addition to technical skills, IS professionals need:
- Skills in written and verbal communication
- An understanding of organizations and the way they operate
- The ability to work with people and in groups
Careers in Information Systems
 Careers in Information Systems
• Typical IS Titles and Functions
• Chief information officer (CIO) employs the IS department’s
equipment and personnel to help the organization attain its goals
• Senior IS Managers
- Vice president of information systems
- Manager of information systems
- Chief technology officer (CTO)
- Central role of all of the above is to communicate with other
areas of the organization to determine changing business needs
 Careers in Information Systems: Operations Roles

• Data center managers are responsible for the maintenance and

operation of the organization’s computing facilities
• System operators run and maintain IS equipment
• IS security analysts are responsible for maintaining the
security and integrity of their organizations’ systems and data
• Local area network (LAN) administrators set up and manage
the network hardware, software, and security processes
 Careers in Information Systems: Development Roles
• Software developers write the software that customers and
employees use
• Systems analysts consult with management and users, as well
as convey system requirements to software developers and
network architects
• Programmers convert a program design developed by a
systems analyst or software developer into one of many
computer languages
• Web developers design and maintain Web sites, including site
layout and function, to meet the client’s requirements
 Careers in Information Systems: Support Roles

• Database administrators (DBAs) design and set up databases

to meet an organization’s needs
• System support specialists respond to telephone calls, email,
and other inquiries from computer users
 Careers in Information Systems
• Other IS Careers
• Consulting opportunities
• Computer training
• Computer and computer-equipment sales
• Computer repair and maintenance
• Support services
• Employment with technology companies
• Entrepreneurial ventures
 Careers in Information Systems
• Working in Teams
• Most IS careers involve working in project teams that can
consist of many of the positions and roles
• It is always good for IS professionals to:
- Have good communications skills and the ability to work with other
people
• Virtual team: a group of individuals whose members are
distributed geographically, but work as a coherent unit
through the use of information systems technology
- Strength: the best available people are enlisted to solve
important organizational problems
- Supported by electronic communications: email, instant
messages, video conferences, etc.
 Finding a Job in IS
• Developing an online résumé can be critical to finding
a good job
• The Internet
• Online job sites
• Company Web sites
• Social networking sites
• Informal networks of colleagues or business
acquaintances
THANK
U!