Lecture 1

An Introduction to Information Systems

Four powerful worldwide changes that have altered the business environment:
1. 2. 3. 4.

Emergence of the Global Economy Transformation of Industrial Economies Transformation of the Business Enterprise The Emerging Digital Firm

Emergence of the Global Economy

Management and control in a global marketplace Competition in world markets Global work groups Global delivery systems

Today, information systems provide the communication and analytic power that firms need for conducting trade and managing businesses on a global scale. Communicating with distributors and suppliers, operating 24 hours a day in different national environments, coordinating global work teams, and serving local and international reporting needs is a major business challenge that requires powerful information system responses.

Transformation of Industrial Economies

Knowledge- and information-based economies Productivity New products and services

Knowledge: a central productive and strategic asset

Time-based competition

Shorter product life

Turbulent environment Limited employee knowledge base

Transformation of Industrial Economies

Information Systems are needed to optimize the flow of information and knowledge within the organization and to help management maximize the firms knowledge resources.
Because employees productivity depends on the quality of the systems serving them, management decisions about information technology are critically important to the firms prosperity and survival.

Labor Force Composition 1900-2000

Labor Force Composition 1900-2000

70% 60% 50% 40% 30% 20% 10% 0% 1900 1910 1920 1930 1940 1950 1960 1970 1980 1997 2000

Year

Transformation of the Business Enterprise

Flattening (less hierarchical) Decentralization Flexibility (in utilizations of working teams) Location independence Low transaction and coordination costs Empowerment Collaborative work and teamwork

Information Technology makes this style of management possible.

Emergence of the Digital Firm

Digitally-enabled relationships with customers, suppliers, and employees Core business processes accomplished via digital networks Digital management of key corporate assets Rapid sensing and responding to environmental changes

Digital firm is an organization where nearly all significant business processes and relationships with customers, suppliers, and employees are digitally enabled, and key corporate assets are managed through digital means. Business processes are the unique ways in which organizations coordinate and organize work activities, information, and knowledge to produce a product or service.

4 Major Systems Defining the Digital Firm 1. Supply chain management systems
Information systems that automate the relationship between a firm and its suppliers in order to optimize the planning, sourcing, manufacturing, and delivery of products and services.

2. Customer relationship management system

Information systems for creating a strong integrated view of all of the relationships a firm maintains with its customers
continue

4 Major Systems Defining the Digital Firm (continued) 3. Enterprise systems

Integrated enterprise-wide information systems that coordinate key internal processes of the firm, integrating data from manufacturing and distribution, finance, sales, and human resources.

4. Knowledge management systems

Systems that support the creation, capture, storage, and distribution of firm expertise and knowledge.

MANAGEMENT

Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently and accomplish selected aims.

Management
Levels: Senior managers: make long-range strategic decisions about products and services

Middle managers: Carry out the programs and plans of senior management Operational managers: monitor the firms daily activities

Data: Streams of raw facts representing events such as business transactions Information: Clusters of facts that are meaningful and useful to human beings in the processes such as making decisions

CHARACTERISTICS OF VALUABLE INFORMATION

Accuracy Complete Economical Reliable Relevant

Simple Timely Verifiable Accessible Secure

ACCURATE Accurate information is error free. In some cases inaccurate information is generated because inaccurate data is fed into the transformation process. COMPLETE Complete Information contains all the important facts. ECONOMICAL Information should be relatively economical to produce.

RELIABLE
Reliable information can be dependent on. In many cases, the reliability of the information depends on the reliability of the data collection method.

RELEVANT Relevant information is important to the decision maker. SIMPLE Information should also be simple

TIMELY Timely information is delivered when it is needed

VERIFIABLE Information should be verifiable. This means that can check it to make sure it is correct. ACCESSIBLE Information should be easily accessible by authorized users SECURE Information should be secure from access by unauthorized users.

What is a System?
A system is set of elements or components that interact to accomplish goals. The elements themselves and the relationships among them determine how the system works. System have inputs, processing mechanisms, outputs and feedback.

What Is an Information System?

A set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization

Activities in an Information System

INPUT

PROCESS

OUTPUT

FEEDBACK

Activities in an Information System

Input captures or collects raw data from within the organization or from its external environment. Processing converts this raw input into a more meaningful form. Output transfers the processed information to the people who will use it or to the activities for which it will be used. Feedback is a output that returned to appropriate members of the organization to help them evaluate or correct the input stage.

Computer-Based Information System (CBIS)

It is an information systems that rely on computer hardware and software for processing and distributing information
Formal System

It is a system resting on accepted and fixed definitions of data and procedures, operating with predefined rules. Formal Information system can be computer based or manual Our concern in this course is in formal, organizational computer-based information systems

Components of a CBIS Hardware Software Database Telecommunication People Procedures

Hardware
Hardware consists of computer equipment used to perform input, processing and output activities. Tangible parts of computer systems Hardware includes :

Input Devices
Processing Devices

Output Devices
Storage Devices

Software
Software is the computer programs that govern the operation of the computer. These programs allow the computer to, for example, process payroll, send bills to customers and provide better customer service There are two basic types of software: System Software Application Software

Database
A database is an organized collection of facts and information

An organizations database can contain facts and information on customers, employees, sales information and much more. Different databases include:
Oracle MS-Access SQL Server MYSQL

Telecommunication
Telecommunications is the electronic transmission of signals for communications and enables organizations to carry out their processes and tasks through effective computer networks. Group of computers connected together is called computer network. Networks are used to connect computers and computer equipment in a building, around the country, or around the world to enable electronic communication.

People
People are the most important element in most computer-based information system. Computer system personnel include all the people who manage, run programs and maintain the systems.

Procedures
Procedures include the strategies, policies, methods and rules for using a CBIS.

A Business Perspective on Information Systems

Businesses are not in the business of processing information for its own sake. Instead they process information in order to improve organizational performance and produce profits. An important instrument for creating value for the organization Information system can contribute to firm values indifferent ways including increase in firms return on its investments, enhancing the companys strategic position, or increasing the market value of the firms stock.

A Business Perspective on Information Systems

Information systems literacy: Broad-based

understanding of information systems that includes behavioral knowledge about organizations and individuals using information systems and technical knowledge about computers. Computer literacy: Knowledge about information technology, focusing on understanding how computer-based technologies work

Organizations
Information systems are an integral part of organizations. Indeed, for some companies, such as credit reporting firms, without an information system, there would be no business.

Key Elements of an organization: People: Managers, knowledge workers, data

workers, production or service workers

Structure: Organization chart , groups of

specialists, products, geography

Operating procedures: Standard operating

procedures (SOP, rules for action)

Politics: Power to persuade, get things done.

Conflict based on different interests and point of view is the basis for organizational politics.

Culture: Customs of behavior

Major Business Functions

(specialized tasks performed by business organizations)

Sales and marketing: Selling the organizations product and services Manufacturing and production: Producing products and services Finance: Managing the organizations financial assets (cash, stocks, bonds, etc.)

Accounting: Maintaining the organizations financial records (receipts, disbursements, paychecks, etc.)
Human resources: Attracting, developing, and maintaining the organizations labor force; maintaining employee record

Management Information System

The study of information systems focusing on their use in business and management. In this course we will treat it as a socio-technical system. MIS combines the theoretical work of computer science, management science, and operations research with a practical orientation towards the behavioral issues surrounding the development, use, and impact of information systems raised by sociology, economics, and psychology.

CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS

Technical Approaches Computer Science Operations Research

Management Science

Sociology

Psychology

Economics

Behavioral Approaches

CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS Socio-Technical Systems

Optimize systems performance:

Technology and organization

Organization and technology mutually adjust to one another until fit

Socio-technical Systems