Understanding Information Systems

Introduction to Information Systems

• Information systems are a mix of technology, individuals, and processes utilized for information management
• They boost efficiency, improve decision-making, and streamline operations across ERP, CRM, and FIS
• Information systems enable communication and teamwork
• They provide support for data-driven strategic planning

Components of Information Systems

• Hardware consists of computers, servers, and network devices
• Software includes both operating systems and business applications
• Data refers to raw facts converted into meaningful information
• People & Processes involves users, IT personnel, and workflows

Business Applications of Information Systems

• Accounting and Finance uses IS for financial reporting, forecasting, auditing, tax calculations, and regulatory compliance through tools such as QuickBooks and SAP Financials
• Human Resources & Marketing utilizes HRIS to oversee employee records and payroll
• These departments also leverage CRM to monitor customer interactions and sales, and use marketing automation for email campaigns and data analytics through platforms like Salesforce and Workday

Understanding Computer and Information Literacy

• Computer literacy is the ability to use computers and software effectively, including operating systems, office programs, and web browsing
• It's an essential skill for modern workplaces
• Information literacy is the capacity to analyze, evaluate, and apply data, which is crucial for financial analysis and business intelligence
• It matters as it empowers professionals to make informed decisions

Transaction and Management Information Systems

• Transaction Processing Systems (TPS) automate routine business activities like POS systems and payroll processing, as seen in banking and retail
• Management Information Systems (MIS) offer reports that are beneficial for business decision-making in areas like sales and inventory, assisting managers in data-driven decisions

Comparing TPS and MIS

• TPS focuses on real-time processing of daily transactions, such as recording sales
• MIS provides summaries and analytics for management’s use, for instance, analyzing monthly sales trends

Data vs Information

• Data is raw, unorganized facts and figures like sales numbers
• Information is data that has been processed and made meaningful, such as a monthly sales report
• This processing is important for accurate business decision-making

Role and Examples of Data in Business

• Data analytics support business forecasting and planning, data security, compliance, and gaining competitive advantages
• In retail, data helps predict customer trends
• In banking, it's used for fraud detection and risk management
• Healthcare employs data for patient diagnosis and treatment recommendations

Porter's Five Forces Model

• This model helps businesses understand market dynamics by analyzing industry rivalry, new entrants, supplier power, buyer power, and potential substitutes
• It's also used in strategic business planning

Analyzing Industry Forces

• Industry Rivalry involves competition among existing companies, such as Coke vs. Pepsi
• Information Systems (IS) aid by delivering market analysis tools and competitive intelligence
• Threats of New Entrants are affected by barriers such as high costs and brand loyalty, where IS can assist via digital transformation and cost efficiency
• Bargaining Power of Suppliers & Buyers indicates suppliers can influence prices and the availability of materials, while buyers seek better products at lower costs, aided by IS through supply chain enhancements and e-commerce analytics
• Threat of Substitutes involves alternative products impacting market demand, and this is addressed by IS through product innovation and market trend analysis

Careers and Skills in Information Systems

• IT Auditors ensure regulatory compliance
• Systems Analysts design IT solutions for business needs
• Cybersecurity Analysts protect company data from threats
• High demand exists for data science and analytics, as well as cloud computing and cybersecurity roles due to industry growth and AI and automation transforming industries
• Needed skills include: technical expertise in programming and database management, analytical abilities for data interpretation and problem-solving, and soft skills such as communication, teamwork, and adaptability

Future and Relevance of Information Systems

• The future includes remote work, digital transformation, lifelong learning, and certifications in cybersecurity, cloud computing, and AI
• Information systems enhance business efficiency
• Data is critical for making decisions
• Understanding information systems improves decision-making, enhances efficiency, and fosters innovation
• Today's digital world relies on information systems to impact everything from online shopping to social media

Data, Information, and Knowledge

• Data consists of raw, unorganized facts and figures
• Information is data that has been organized and processed to provide value and insights
• Knowledge is the understanding and interpretation of information gained through experience and learning

Types and Value of Data

• Data can be alphanumeric (numbers, letters), image (JPEG, GIF), audio (recordings, MP3), or video (MP4, MOV)
• Information is valuable when it is accessible, accurate, timely, and relevant, aiding decision-making, efficiency, and communication

Characteristics of Quality Information

• Accessible information is restricted to authorized individuals
• Accurate information is reliable and free from errors
• Complete information includes all required details
• Relevant information pertains to the specific task or decision

Understanding Systems and Information Systems

• A system is a set of interconnected components working toward a common goal, involving input, processing, output, and feedback
• An information system collects, processes, stores, and disseminates data to meet specific objectives, also using input, processing, output, and feedback

Roles and Capabilities of Information Systems

• The six major roles include: managing operations, supporting customer interactions, making decisions, collaborating on teams, gaining competitive advantage, and improving individual productivity
• The major capabilities are: rapid calculations, fast communication, data storage, information access, and data interpretation

Computer Based Information System (CBIS)

• CBIS involves a combination of hardware, software, databases, networks, people, and procedures to manage data into information
• CBIS automates manual processes, and software BIS is used in business

CBIS Components - Hardware

• Hardware includes computer equipment that performs input, processing, storage, and output activities
• The four hardware categories are: input devices like keyboards, processing units like CPUs, storage units like RAM, ROM, SSD, and HDD, and output devices

CBIS Components - Software and Database

• Software includes programs that operate the computer, classified as system software (e.g., Android, iOS, Windows) and application software (e.g., Word, Excel)
• A database is a structured collection of related files, serving as 'storage' and utilized by programmers with programs like Microsoft Access

CBIS Components - Telecommunications and Networks

• Telecommunications is transmitting electronic signals for communication through computer networks
• Networks link computers within a building, country, or worldwide to enable communication
• A Local Area Network (LAN) covers a single room
• A Metropolitan Area Network (MAN) covers a larger area
• A Wide Area Network (WAN) connects buildings or locations
• A Global Area Network (GAN) spans across countries

Internet, Cloud Computing, and Web Technologies

• The Internet is a global computer network using TCP/IP for information exchange
• Cloud Computing provides on-demand software and data storage via the Internet, managed on remote hardware
• The World Wide Web (WWW) is a network of Internet links containing various media, identified by Uniform Resource Locators (URLs)

Intranets, Extranets, and People

• Intranets apply internet technologies for internal organizational communication and project collaboration
• Extranets provide access to selected external partners like business partners and customers
• People are vital for success, managing operations within these systems

Procedures and Business Information Systems

• A procedure is a series of steps to achieve a specific outcome, such as order processing or inventory reporting
• Business Information Systems are used by companies for various functions
• Electronic Commerce (e-commerce) includes electronic transactions such as B2B, B2C, and C2C
• Mobile Commerce (m-commerce) utilizes mobile devices for conducting business

Types of Business Information Systems

• Transaction Processing Systems (TPS) record business transactions
• Enterprise Systems integrate key organizational tasks like managing payments, inventory, invoicing, and supplies
• Enterprise Resource Planning (ERP) manages vital business operations across a global organization
• Management Information Systems (MIS) delivers routine information to managers for effective decision-making
• Decision Support Systems (DSS) supports problem-specific decisions, aligning with MIS for optimal organizational choices

Specialized Business Information Systems

• Specialized systems are customized for individual companies
• Artificial Intelligence (AI) enables computers to excel in tasks, like games and medical diagnoses, and autonomous driving; utilizing advanced programming to mimic human intelligence
• Most machines integrate AI to improve performance and speed

Components of Computer Based IS & Business IS

• Key components include:
• Hardware for input, processing, storage, and output
• People to ensure success
• Software to govern operations
• Procedures to achieve specific results

Business Information Systems (BIS)

• Involves:
• Electronic Commerce (e-commerce) for digital transactions
• Mobile Commerce (m-commerce) using wireless devices
• Transaction Processing Systems (TPS) for recording transactions
• Enterprise Systems for integrating vital tasks
• Enterprise Resource Planning (ERP) for managing global operations

Information & Decision Support Systems

• Involves:
• Management Information Systems (MIS) supplies routine information for managers
• Decision Support Systems (DSS) supports problem-specific decisions

Specialized Business Information Systems Characteristics

• Involves:
• Artificial Intelligence (AI) for advanced computer capabilities
• Customized systems for specific companies
• AI integrated in machines to mimic human behavior

Branches of Artificial Intelligence

• Major branches:
• Robotics that automate complex, dangerous, or repetitive tasks
• Vision Systems that allow devices to process visual data
• Natural Language Processing for understanding and generating human language
• Learning Systems that enable computers to learn from experiences
• Neural Networks that recognize patterns

Virtual Reality and Multimedia Systems

• Expert systems mimic expert decision-making to support users
• Virtual Reality (VR) creates an immersive 3D environment
• Augmented Reality (AR) overlays digital data onto the real world
• Multimedia integrates images, sound, and 3D effects

Enterprise and Transaction Processing Systems

• Enterprise Systems centralize information sharing across business functions to track and control operations
• Transaction Processing Systems (TPS) monitor and process transaction data through batch or online processing

TPS Objectives and Activities

• Objectives include: capturing and updating databases, ensuring data accuracy, preventing fraud, providing timely responses, reducing clerical work, improving customer service, and gaining a competitive advantage

Information Systems for Accounting and Finance

• Areas include:
• Financial Planning and Budgeting for forecasting
• Managing Financial Transactions for global exchanges
• Investment Management
• Control and Auditing

Information Systems for Marketing

• Information systems are beneficial to production/operations management and human resource management

IS for Production/Operations Management

• Includes
• In-House Logistics and Materials Management: managing inventory and quality control
• Planning Production and Operations: evolving from MRP to ERP
• Computer-Integrated Manufacturing: integrating automated factory systems
• Product Life Cycle Management: managing product-related data

IS for Human Resource Management

• Includes:
• Recruitment
• HR Maintenance and Development
• HR Planning and Management
• Payroll and employee records
• Benefits administration
• Employee relationship management

Accounting and Finance Systems

• Financial planning assesses availability and cost
• Budgeting allocates resources among participants
• Capital budgeting finances asset acquisitions
• Virtual close enables closing books at any time
• Managing financial transactions handles multiple currencies
• Investment management handles organizational investments

Marketing and Sales Systems

• Customer relations is essential for personalization
• Sales force automation improves sales productivity through software

Production/Operations and Logistics Systems

• Inventory management optimizes inventory levels and ordering
• Quality control manages defects
• Materials requirements planning (MRP) integrates production and purchasing
• Manufacturing resource planning (MRP II) integrates enterprise production and finance
• Just-in-time systems (JIT) coordinates material delivery for production

Functional Area Information Systems Reports

• Includes:
• Routine, ad-hoc, drill-down, key-indicator and comparative reports
• Exception reports that highlight deviations from standards

Enterprise Resource Planning (ERP) Overview

• Advantages of ERP:
• Improved data access
• Elimination of inflexible legacy systems
• Improved processes
• Upgraded technology infrastructure
• Disadvantages of ERP:
• High implementation costs and time
• Difficulty in change implementation and integration with other systems
• Risks associated with single vendor dependencies and implementation failures

Production and Supply Chain Management

• Product flow involves the physical product
• Information flow updates client status
• Finances flow encompasses payments
• Supply chain management monitors and manages goods from raw materials to finished products

Customer Relationship Management (CRM)

• Essential components include:
• Contact management
• Sales management
• Customer support
• Marketing automation
• Analysis tools
• A CRM system manages customer interactions to improve loyalty and satisfaction

Sales Ordering and Financial Accounting

• Sales ordering records customer orders
• Financial accounting involves a general ledger which captures main business activities like assets, liabilities, etc
• Subsidiary ledgers provide detailed transaction data

International Issues with Enterprise Systems

• Involves:
• Different languages and cultures
• Disparities in IS infrastructure
• Varying laws and customs
• Managing multiple currencies