Week No. 1- Topic 1- Introduction to IS.pdf

For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Overview Chapter 1 An Introduction to Information Systems » Chapter 1 creates a framework for the information systems course. M...

For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Overview Chapter 1 An Introduction to Information Systems » Chapter 1 creates a framework for the information systems course. Major sections in this chapter become entire chapters in the text. This chapter describes the components of an information system and introduces major classes of business information systems. It offers an overview of some major challenges that IS professionals face. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Learning Objectives Discuss why it is important to study and understand information Systems Describe the characteristics used to evaluate the quality of data Explain ERP and TPS systems. Explain different steps of system development. Explain different challenges facing Information systems of global firms. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Principles The value of information is directly linked to how it helps decision makers achieve the organization’s goals Computers and information systems are constantly making it possible for organizations to improve the way they conduct business Knowing the potential impact of information systems and having the ability to put this knowledge to work can result in a successful personal career, organizations that reach their goals, and a society with a higher quality of life System users, business managers, and information systems professionals must work together to build a successful information system Information systems must be applied thoughtfully and carefully so that society, business, and industry can reap their enormous benefits For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  What is a System? A system is a set of elements or components that interact to accomplish goals Systems have inputs, processing mechanisms, outputs, and feedback A system processes the input to create the output Examples of systems are everywhere – an automatic car wash, the heating in a building, the human body; you should be able to think of many more For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  System Performance » System performance can be measured in various ways. » Efficiency is a measure of what is produced divided by what is consumed. » For example, the efficiency of a motor is the energy produced (in terms of work done) divided by the energy consumed (in terms of electricity or fuel). Some motors have an efficiency of 50 per cent or less because of the energy lost to friction and heat generation. » Effectiveness is a measure of the extent to which a system achieves its goals. » It can be computed by dividing the goals actually achieved by the total of the stated goals. » For example, a company might want to achieve a net profit of €100 million for the year with a new information system. Actual profits, however, might only be €85 million for the year. In this case, the effectiveness is 85 per cent (85/100 = 85 per cent). For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  System Performance » Evaluating system performance also calls for using performance standards. » A system performance standard is a specific objective of the system. » For example, a system performance standard for a marketing campaign might be to have each sales representative sell SR 100,000 of a certain type of product each year. A system performance standard for a manufacturing process might be to produce no more than 1% defective parts For example, a company might want to achieve a net profit of SR100 million for the year with a new information system. Actual profits, however, might only be SR85 million for the year. In this case, the effectiveness is 85 per cent (85/100 = 85 per cent). For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  What is information? » Claude Shannon defined it as: information is that which reduces uncertainty. » Information is a collection of facts. These facts can take many forms – text, numbers, images, audio clips and video clips are all examples » A closely related term is data, these two terms are often used interchangeably. The traditional information systems view is that the input to an information system is data, and the output from the system is information. This means therefore that the difference between them is to do with how much processing has been done: unprocessed facts are data; processed facts are information For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  What is an Information System? Therefore… an information system (IS) is a set of interrelated components that collect (input), manipulate & store (process), and disseminate (output) information, and provide a feedback mechanism to meet an objective In information systems, input is the activity of gathering and capturing data Processing means converting or transforming this input into useful outputs Output involves producing useful information, usually in the form of documents and reports Feedback is information from the system that is used to make changes to input or processing activities For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  The Characteristics of Valuable Information To be useful to managers, information should have some or possibly all of the following characteristics: Information should be easily accessible by authorized users so Accessible they can obtain it in the right format and at the right time to meet their needs Accurate information is error free. In some cases, inaccurate Accurate information is generated because inaccurate data is fed into the transformation process Complete information contains all the important facts, but not Complete more facts than are necessary Information should also be relatively economical to produce. Economical Decision makers must always balance the value of information with the cost of producing it. Flexible information can be used for a variety of purposes. For example, information on how much inventory is on hand for a particular part can be used by a sales representative in closing a Flexible sale, by a production manager to determine whether more inventory is needed, and by a financial executive to determine  The Characteristics of Valuable Information Relevant Relevant information is important to the decision maker Reliable information can be depended on. In many cases, the reliability of the information depends on the reliability of the data-collection method. In other instances, reliability depends Reliable on the source of the information. A rumour from an unknown source that oil prices might go up may soon not be reliable (even though it might be useful) Information should be secure from access by unauthorized Secure users Information should be simple, not overly complex. Sophisticated and detailed information might not be needed. In Simple fact, too much information can cause information overload, whereby a decision maker has too much information and is unable to determine what is really important Timely information is delivered when it is needed. Knowing last Timely week’s weather conditions will not help when trying to decide what coat to wear today Information should be verifiable. This means that you can check Verifiable it to make sure it is correct, perhaps by checking many sources  Self-Assessment Test 1. Input is ___________ to produce output. 2. A ___________ is a specific objective of a system. 3. ___________ is information from a system that is used to make changes to the input. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Manual and Computerized Information Systems An information system can be manual, for example paper-based, or computerized A computer-based information system (CBIS) is a single set of hardware, software, databases, telecommunications, people, and procedures that are configured to collect, manipulate, store, and process data into information For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Hardware Hardware consists of computer equipment used to perform input, processing, and output activities Input devices include keyboards, mice and other pointing devices, automatic scanning devices, and equipment that can read magnetic ink characters Processing devices include computer chips that contain the central processing unit and main memory Output devices include computer screens and printers For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Software Software consists of the computer programs that govern the operation of the computer There are two types of software: 1. system software controls basic computer operations, including start-up, input and output. An example is Microsoft Windows 2. applications software allows you to accomplish specific tasks, including word processing and drawing charts. An example is Microsoft Excel For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Databases A database is an organized collection of facts and information, typically consisting of two or more related data files An organization’s database can contain information on customers, employees, inventory, competitors’ sales, online purchases, and much more For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Telecommunications, Networks, and the Internet Telecommunication is the electronic transmission of signals for communications, which enables organizations to carry out their processes and tasks through computer networks Networks connect computers and equipment in a building, around the country, or around the world to enable electronic communication The Internet is the world’s largest computer network, actually consisting of thousands of interconnected networks, all freely exchanging information For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  People People are the most important element in most computer-based information systems The people involved include users of the system and information systems personnel, including all the people who manage, run, program, and maintain the system For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Procedures Procedures include the strategies, policies, methods, and rules for using the CBIS, including the operation, maintenance, and security of the computer Good procedures can help companies take advantage of new opportunities and avoid potential disasters Poorly developed and inadequately implemented procedures can cause people to waste their time or result in inadequate responses to disasters For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Business Information Systems The most common types of information systems used in business organizations are those designed for electronic and mobile commerce, transaction processing, management information, and decision support. These systems help employees in organizations accomplish routine and special tasks. Often in large organizations one information system is used to accomplish all of these tasks. In others, separate systems are used. When one system is used it is called an Enterprise Resource Planning System, and it does most if not all of the tasks of the other systems For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Discussion Questions List the areas of your life that are impacted by information systems. Select a few of these and describe how things would be different without IS. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Electronic and Mobile Commerce E-commerce involves any business transaction executed electronically Some types of e-commerce are: – B2B (business-to-business): commerce between companies – B2C (business-to-consumer, B2C): commerce between companies and consumers – C2C (consumer-to-consumer): commerce between consumers and other consumers You might assume that e-commerce is reserved mainly for consumers visiting websites for online shopping, but web shopping is only a small part of the e-commerce picture; the major volume of e-commerce – and its fastest growing segment – is business- to-business (B2B) transactions that make purchasing easier for corporations. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Electronic and Mobile Commerce Mobile commerce (m-commerce) refers to transactions conducted anywhere, anytime M-commerce relies on wireless communications that managers and corporations use to place orders and conduct business with handheld computers, portable phones, laptop computers connected to a network, and other mobile devices For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Enterprise Systems Enterprise systems help organizations perform and integrate important tasks, such as paying employees and suppliers, controlling inventory, sending out invoices and ordering supplies. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Enterprise Resource Planning An enterprise resource planning (ERP) system is a set of integrated programs that manage the vital business operations for an entire multi-site, global organization. An ERP system can replace many applications with one unified set of programs, making the system easier to use and more effective. The scope of an ERP system might vary from company to company, most ERP systems provide integrated software to support manufacturing and finance. An ERP might do the job of some or all of the other types of Business Information Systems, particularly the Transaction Processing System, Management Information System and Decision Support System For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Enterprise Resource Planning The primary benefits of implementing an ERP system include easing adoption of improved work processes and increasing access to timely data for decision making. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Transaction Processing Systems Many of early computer systems were designed to reduce costs by automating routine, labour intensive business transactions. A transaction is any business-related exchange such as payments to employees, sales to customers, or payments to suppliers A transaction processing system (TPS) is an organized collection of people, procedures, software, databases, and devices used to record completed business transactions One of the first business systems to be computerized was the payroll system. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Transaction Processing Systems The primary inputs for a payroll TPS are the number of employee hours worked during the week and the pay rate. The primary output consists of paycheques. Other routine applications include sales ordering, customer billing and inventory control. Because these systems handle and process daily business exchanges or transactions, they are all classified as TPSs For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Management Information Systems A management information system (MIS) is an organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers An MIS focuses on operational efficiency The output of a TPS is the input to a MIS MIS typically provide standard reports generated with data and information from the TPS For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Self-Assessment Test » ___________ is information from a system that is used to make changes to the input. » The most important element in an information system is the ___________. » An ___________ supports long-term strategic decision making. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Decision Support System A decision support system (DSS) is an organized collection of people, procedures, software, databases, and devices that support problem-specific decision-making The focus of a DSS is on making effective decisions. Whereas an MIS helps an organization ‘do things right’, a DSS helps a manager ‘do the right thing’. A human being is still in charge of making the decision, unlike in a system with Artificial Intelligence Decision support systems are used when the problem is complex and the information needed to make the best decision is difficult to obtain and use For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Specialized Business Information Systems Knowledge management systems (KMS): an organized collection of people, procedures, software, databases, and devices to create, store, share, and use the organization’s knowledge and experience KMS are essential for fostering innovation, improving decision-making, and enhancing overall efficiency. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Specialized Business Information Systems In addition to knowledge management, companies use other types of specialized systems Artificial Intelligence: specialized systems that attempts to have the computer system take on the characteristics of human intelligence. Applications include robotics and natural language processing Virtual reality: simulation of a real or imagined environment that can be experienced visually in three dimensions For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Systems Development Systems development is the activity of creating or modifying business systems. Systems development projects can range from small to very large in fields as diverse as stock analysis and video game development. People inside a company can develop systems or companies can use outsourcing, hiring an outside company to perform some or all of a systems development project. Outsourcing allows a company to focus on what it does best and delegate other functions to companies with expertise in systems development. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Systems Development Steps For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Systems Development Steps 1 Systems Investigation and Analysis The goal of the systems investigation is to gain a clear understanding of the problem to be solved or opportunity to be addressed. The next step, systems analysis, defines the problems, the required resources and evaluate the opportunities of the existing system. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Systems Development Steps 2 Systems Design, Implementation, and Maintenance and Review Systems design determines how the new system will work to meet the business needs defined during systems analysis. Systems implementation involves creating or acquiring the various system components (hardware, software, databases, etc.) defined in the design step, assembling them and putting the new system into operation. The purpose of systems maintenance and Review is to check and modify the system so that it continues to meet changing business needs For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Global Challenges in IS Changes in society as a result of increased international trade and cultural exchange, often called globalization, have always had a big impact on organizations and their information systems Global markets have expanded. People and companies can get products and services from around the world, instead of around the corner or across town. These opportunities, however, introduce numerous obstacles and issues, including challenges involving culture, language and many others. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Global Challenges in IS 1 Cultural challenges: countries and regional areas have their own cultures Language challenges: Language differences can make it difficult to translate exact meanings from one language to another Time and distance challenges: Time and distance issues can be difficult to overcome for individuals and organizations involved with global trade in remote locations. Large time differences make it difficult to talk to people on the other side of the world. With long distance, it can take days to get a product, a critical part or a piece of equipment from one location to another location. Infrastructure challenges: high-quality electricity and water might not be available in certain parts of the world. Telephone services, Internet connections, and skilled employees might be expensive or not readily available For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Global Challenges in IS 2 Currency challenges: the value of different currencies can vary significantly over time, making international trade more difficult and complex Product and service challenges: traditional products that are physical or tangible, such as a car or bicycle, can be difficult to deliver to the global market Technology transfer issues: most governments don’t allow certain military-related equipment and systems to be sold to some countries. National laws: all countries have a set of laws that must be obeyed by citizens and organizations operating in the country. Laws restricting how data enters or exits a country are often called trans-border data-flow laws. Keeping track of these laws and incorporating them into the procedures and computer systems of multinational and trans-national organizations can be very difficult and time consuming, requiring expert legal advice Trade agreements: countries often enter into trade agreements with each other For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Summary Information: collection of facts organized in such a way that they have value beyond the facts themselves System: a set of elements that interact to accomplish a goal Components of an information system: input, processing, output, and feedback For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Summary (continued) Computer-based information system (CBIS): a single set of hardware, software, databases, telecommunications, people, and procedures that are configured to collect, manipulate, store, and process data into information Transaction processing system (TPS): an organized collection of people, procedures, software, databases, and devices used to record completed business transactions For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Summary (continued) Management information system (MIS): an organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers Decision support system (DSS): an organized collection of people, procedures, software, databases, and devices used to support problem-specific decision making For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning  Review Questions 1. Describe what an information system is. What are its main elements? 2. Define the word ‘system’. 3. What are the main components of a system? What does each of them do? 4. What are the characteristics of good quality information? 5. Describe what a TPS does. 6. What is m-commerce? 7. Define telecommunications. 8. What is virtual reality and how could it be used in an organization? 9. What are the main steps in systems development? 10. What are some of the global challenges in the field of information systems? For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning