INFORMATION SYSTEMS: AN OVERVIEW

CHAPTER 1

Hossein BIDGOLI

MIS

TJX Credit Card Breach

NFL Coaches

Fed Ex Cyrus

Chapter 1 Information Systems: An Overview

LO1 Discuss common applications of computers and information systems.

LO2 Explain the differences between computer literacy and information literacy.

LO3 Define transaction processing systems and management information systems.

LO4 Describe the four major components of an information system.

LO5 Discuss the differences between data and information.

l e a r n i n g o u t c o m e s

LO6 Explain the importance and applications of information systems in functional areas of a business.

LO7 Discuss how information technologies are used to gain a competitive advantage.

LO8 Explain the Five Forces Model and strategies for gaining a competitive advantage.

LO9 Summarize the future outlook of information systems.

l e a r n i n g o u t c o m e s (cont’d.)

Chapter 1 Information Systems: An Overview

•Use IS more than any other non IS field

Accounting

•Access to funds

•Where to invest ----Can be heavily analytical

Finance

•Sales force automation SFA

•Geographic IS CRM

Marketing

•HRM , payroll, benefits

HR

•SCM

•CAD/CAM

Operations

•Intranets

•Digital rights management systems

Media & Communications

Value of IS Knowledge in Different Careers

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What is a system?

Combinations of hardware, software, and telecommunications networks that people build and use to collect, create and distribute useful data, typically in organizational settings.

What is an Information System?

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Input ofData

Resources

Input ofData

Resources

Processing Data

Processing Data

Output ofInformation

Products

Output ofInformation

Products

Control of System PerformanceControl of System Performance

Storage of Data ResourcesStorage of Data Resources

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Knowledge Worker (Peter Drucker 1959)• Professionals that create, modify and/or synthesize information as a

fundamental part of their job • They will require higher education levels and received higher

compensation than workers in agriculture or manufacturing• At least 35% of all workers in Canada are knowledge workers

Knowledge Worker (Peter Drucker 1959)• Professionals that create, modify and/or synthesize information as a

fundamental part of their job • They will require higher education levels and received higher

compensation than workers in agriculture or manufacturing• At least 35% of all workers in Canada are knowledge workers

1960 2000

Knowledge Worker

As a knowledge worker of the future, computers and information technology will help you be more effective and productive, no matter what profession you choose.

Computers and information systems are all around you◦ Online classes◦ Grading◦ Grocery and retail◦ PDA and smartphones◦ Internet

“Information systems” versus “information technology”

Computers and Information Systems in Daily Life

January 2007 Identity thieves stole more than 46.5 million

credit cards◦ Used sophisticated hacking techniques to break

through security systems◦ Stored the stolen information on servers in

Eastern Europe and the United States Shows the international nature of

cybercrime

TJX Companies, Inc.: Credit Card Breach

TJX Credit Card Breach

• Computer literacy ◦ Having skills in using productivity software

• Information literacy◦ Understanding the role of information in generating

and using business intelligence• Business intelligence (BI)

◦ Provides historical, current, and predictive views of business operations and environments

◦ Gives organizations a competitive advantage in the marketplace

Computer Literacy and Information Literacy

• Transaction processing systems (TPSs) ◦ Focus on data collection and processing,◦ Cost reduction◦ Operations repetitive◦ Human involvement minimal

The Beginning: Transaction Processing Systems

Fed Ex

• Management information system (MIS)◦ Organized integration of hardware and software

technologies, data, processes, and human elements

◦ Designed to produce timely, integrated, relevant, accurate, and useful information For decision-making purposes

Include:◦ Hardware components◦ MIS software◦ Processes

Management Information Systems

Designing an MIS◦ Define objectives◦ Collect and analyze data◦ Provide information in useful format

Used in both the private and public sect Many organizations use information

systems to gain a competitive advantage

Management Information Systems (cont’d.)

Data Database Process Information

Major Components of an Information System

• Data ◦ Input to the system

Sources of data◦ External◦ Internal

Time orientation Can be collected in different forms

◦ Aggregated ◦ Disaggregated

Data

414712905

SIN 414-712-905

ATM

Database◦ Heart of an information system◦ Collection of all relevant data organized in a

series of integrated files Essential for the success of any information

system Managed with database management

system (DBMS): e.g., Oracle Reduces personnel time needed to gather,

process, and interpret data manually

Database

Process ◦ Generates the most useful type of information for

decision making Generally includes transaction-processing

reports and models for decision analysis Includes a wide range of models to support

all levels of decision making

Process

Information◦ Output of an information system◦ Facts that have been analyzed by the process

component Quality of information

◦ Timeliness◦ Integration with other data and information◦ Consistency and accuracy◦ Relevance

Information

User interface◦ Must be flexible and easy to use◦ Graphical user interfaces (GUIs)

Ultimate goal of an information system ◦ Generate business intelligence (BI)

Information (cont’d.)

a university◦ The university stores all student data in a

database◦ Built-in query capability◦ Other types of analysis can be done

Example of Information Systems

1. Increase employee productivity by reducing time, errors and costs using

2. Enhance decision making 3. Improve team collaboration 4. Create business partnerships and alliances 5. Enable global reach all over the world taking into

consideration the culture of each nation or society. 6. Facilitate organizational transformation as the

organization evolves and responds to the ever-changing marketplace.

six major roles and goals of IT

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Information technologies◦ Achieve goals of information systems

Examples◦ Internet◦ Databases◦ POS Systems◦ RFID tags

Using Information Systems and Information Technologies

POS system◦ Fast customer service ◦ Improved inventory management

Wireless network ◦ Efficient in-store communication

Web site ◦ Communicate with customers ◦ Increase sales with online orders

RFID tags ◦ Better manage inventory

Information Technologies at Home Depot

Information ◦ Second most important resource in any

organization Four Ms of resources:

◦ Manpower >> Personnel info system◦ Machinery >> Manufacturing Info System◦ Materials >> Logistics info system◦ Money >> Financial Info system

The Importance of Information Systems

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Competitive advantageSignificant, long-term benefit to a company over its competition

Ability to establish and maintain a competitive advantage is vital to a company’s success

Cyrus McCormick

• What sources of competitive advantage can you identify the New England Patriots have by using information technology?

• Are these long term, sustainable competitive advantages?

• From our list of Roles and goals of Technology, what does the IS of the NFL do?

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NFL Coaches

NFL Coaches

Michael Porter◦ Professor at Harvard Business School◦ Identified three strategies for competing in the

marketplace successfully Overall cost leadership Differentiation Focus

Using Information Technologies for a Competitive Advantage

Using Information Technologies for a Competitive Advantage

Five Forces Model◦ Michael Porter◦ For analyzing an organization, its position in the

marketplace, and how information systems could be used to make it more competitive

Porter’s Five Forces Model: Understanding the Business Environment

How IS can have a factor in the industry

THE FIVE FORCES MODEL – analyze competitive forces in an Industry

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Chief Technology Officer Manager of Info System Services Systems Analyst Network Administrator Database Administrator Computer Programmer Webmaster

The IT Job Market

Hardware and software costs continue to decline◦ Processing information less expensive in the

future Artificial intelligence and related

technologies will continue to improve and expand

Computer literacy will improve Networking technology will improve Personal computers will continue to improve

in power and quality

Future Outlooks

Internet growth and acceptance will continue

Computer criminals will become more sophisticated◦ Protecting personal identity information will

become more difficult

Future Outlooks (cont'd.)

Examples of uses for computers and information systems

Difference between computer literacy and information literacy

Management information system (MIS)◦ Data, database, process, and information

Porter◦ Three competitive strategies ◦ Five Forces Model

Summary