Principles of Information Systems

Principles of Information Systems and Learning Objectives

• The value of information directly relates to aiding decision-makers in achieving organizational goals.
• Studying and understanding information systems is important
• Being able to differentiate data from information is important in evaluating data value accurately.
• Computers and information systems facilitate business improvement for organizations.
• Information System components include inputs, processing, outputs, and feedback.

Computer-Based Information System Impact

• Understanding the potential impact of information systems alongside practical application leads to career success and organizational goal attainment.
• Key components are hardware, software, databases, telecommunications, people, and procedures.
• Identifying business information system types and understanding their users and benefits is important.
• Business information systems include:
  • Transaction processing systems (TPS)
  • Management information systems (MIS)
  • Decision support systems (DSS)
  • Enterprise systems
  • E- and M-commerce

Information Systems Development

• System users, business managers, and IT professionals collaborate to build successful information systems.
• Key steps are systems investigation, systems analysis, systems design, systems implementation, and systems maintenance.
• Thoughtful and careful application of information systems is necessary for society, businesses, and industries to benefit.
• Threats that information systems and the Internet pose to security and privacy need to be taken into consideration.

Information Systems Importance

• A thoughtful overview of the role and benefits of information systems shows their growing importance in business and industry.
• Managers, sales representatives, and financial advisors utilize information systems.
• Information systems aid individuals in achieving various career goals.

Introduction to Information Systems

• An information system (IS) comprises interrelated components collecting, manipulating, and disseminating data/information, with feedback to meet objectives.
• Information systems increase revenues and reduce business costs.

Information Concepts

• Information is a valuable organizational resource often mistaken for data.

Data, Information, and Knowledge

• Data represents raw facts.
• Information is a collection of organized facts that offer value beyond individual facts.
• A process is a set of logically related tasks.
• Knowledge is awareness and understanding of information.

Types of Data

• Alphanumeric that is represented by numbers, letters, and other characters.
• Image data that is represented by graphic images and pictures.
• Audio data that is represented by sound, noise, or tones.
• Video data that is represented by moving images or pictures.

Valuable Information Characteristics

• Accurate and complete information prevents poor decision-making that could lead to potential financial losses.
• The importance of certain elements depends on data needs.
• Accessible via authorized users to quickly obtain needed information.
• Accurate information is error-free, which inaccurate data being fed into the transformation process is referred to as "garbage in, garbage out (GIGO)."
• Complete information includes all important facts.
• Economical information is an important consideration during the decision-making process.
• Flexible information is applicable to a variety of tasks.
• Relevant information is important to the decision maker.
• Reliable information can be trusted by users.
• Secure information is protected from unauthorized parties.
• Simple information is not overly complex.
• Timely information is delivered when needed.
• Verifiable information can be checked to ensure correctness.

Information Value

• Directly linked to facilitating decision-makers to meet organization goals.
• Valuable information enhances efficiency and effectiveness for both individuals and organizations.

System Concepts

• A system has elements that interact to complete a goal.
• Four components are:
  • Inputs
  • Processing mechanisms
  • Outputs
  • Feedback

System Performance and Standards

• Efficiency is measured by what is produced by what is consumed.
• Effectiveness is gauged by the extent a system attains goals.
• Standard performance is a specific objective.

Information System (IS) Definition

• A set of interrelated elements that collect, manipulate, store, and disseminate data and information in a corrective action to meet an objective.

IS Components

• Input is the system's collection of raw data activity.
• Processing converts data into outputs.
• Output is the creation of documents and reports.
• Feedback provides information for modification of input or processing.

Manual vs. Computerized IS

• An information system can be manual or computerized.
• Computerized systems follow stock indexes/markets and suggest the purchase or sale of blocks of stocks.
• Investment analysts are an example of manual systems, who draw charts and trend lines to assist in investment decisions.

Computer-Based Information Systems

• A single set of hardware, software, databases, telecommunications, people, and procedures configured to collect, manipulate, store, and process data into information.
• Technology infrastructure includes people, software, hardware, telecommunications, procedures, and databases.
• Configured to collect, manipulate, store, and process data into information.

CBIS Components

• Hardware are computer equipment used to perform input, processing, and output activities.
• Software are computer programs that govern the operation of the computer.
• A database is an organized collection of facts and information, typically consisting of multiple files.
• Telecommunications, networks, and the Internet are the electronic transmission of communication signals.
• Networks connect computers and equipment for electronic communication.
• The Internet is the world's largest network.
• An Intranet is an internal network for information exchange and project collaboration.
• An Extranet allows access to authorized company resources to business partners and customers.
• People are the most important element in most computer-based information systems.
• Procedures consist of strategies, methods, policies, and rules for CBIS usage.

Business Information Systems Types

• Common information systems include electronic and mobile commerce, transaction processing, management information, and decision support.
• Some organizations use special-purpose systems like virtual reality.

Electronic and Mobile Commerce (E-Commerce)

• E-commerce involves various electronic business transactions:
  • Companies (B2B)
  • Companies and consumers (B2C)
  • Consumers (C2C)
  • Business and the public sector
  • Consumers and the public sector
• Mobile commerce (m-commerce) uses mobile wireless devices to place orders and conduct business.

E-Business

• E-commerce enhances stock prices and market value.
• E-business utilizes information systems and the Internet to perform all business functions.
• E-business has business-related tasks such as finance, accounting, human resource activities, manufacturing, etc.

Enterprise Systems: Transaction Processing System

• A transaction is any business-related exchange, such as payments and sales to customers.
• A transaction processing system (TPS) has collection of people, procedures, software, databases, and devices to record business transactions.
• Enterprise resource planning manages vital business operations for global organizations. ERP systems help to support manufacturing and finance.

Information and Decision Support Systems

• Management Information System (MIS) includes people, procedures, software, databases, and devices.
• The MIS equipment provide routine information to managers and decision-makers.
• A decision support system (DSS) supports to solve an issue.
• The DSS is used when the information needed is complex and when it is difficult to obtain.

Specialized Business Information Systems

• Knowledge management systems (KMSs) create, store, share, and use organizational experience.
• Artificial intelligence (AI) computer systems taking on characteristics of human intelligence.
• Expert systems give computer ability to make suggestions and function like an expert in a particular field.
• Virtual reality features a visually experienced real or imagined three-dimensional environment.

Systems Development

• Systems development is the creation or modification of existing business systems.
• Outsourcing enables companies to focus on core activities and delegate other functions to experts.
• Four categories are:
  • Systems Investigation
  • Systems Analysis
  • Systems Design
  • Systems Implementation
  • Systems Maintenance and Review

Systems Investigation and Analysis Goals

• The goal is to understand a problem/opportunity clearly.
• Systems analysis defines existing system problems and opportunities.

Systems Design, Implementation, Maintenence, and Review

• Systems design formulates a new system to meet the organizational needs.
• Systems implementation includes obtaining system components and putting a new system into operation.
• Systems maintenance includes checks and modifications, ensuring the business functions correctly.

Information Systems Impact

• Information systems are built per the needs of people/businesses and they can be vulnerable to unethical people.

Information Systems: Security and Privacy

• Drawbacks include the potential for data loss or theft.
• Mitigations focus on installing security and control measures.
• Using information systems can raise job loss concerns from increased efficiency.

Computer Literacy

• Computer literacy is knowledge of systems and equipment functionality.
• Information systems literacy has to do with how data is used by the individuals, groups, and organizations.

Information Systems Functional Areas of Business

• Functional areas and operational divisions are finance, accounting, sales, marketing, manufacturing, human resources, and legal.

Functional Areas Utilized in Industry

• Various groups utlize IS heavily like:
• Airline industry
• Investment firms
• Banks
• Transportation industry
• Publishing companies
• Also; HMO's, retail companies, power management, professional services, and management consulting firms.

Global Challenges

• There are various challenges in culture, language, distance, resources, and economy.
• There are more challenges in products, services, technology, law, and trade.

Summary of Main Points

• Data is raw facts.
• A system has items working together to reach a goal.
• An information system has four elements: Input, Processing, Output, and Feedback.
• A computer-based information system (CBIS) includes hardware, software, databases, telecommunications, Internet, procedures and people.
• E-commerce is a business transaction with exchanges between companies, the public and consumers.
• Transaction processing handles daily business transactions in an organization.
• A decision support system (DSS) is organized with a goal to solve a problem.
• Creating and modifying business systems can also require computer skills.