1-1

• The number in the lower left corner of each slide is the page number in the O’Brien textbook to which the material refers, allowing students to follow in their books more easily.

• The number of slides for each chapter is reduced from the last edition.

• The book illustrations are on the slides, but to keep the number of slides down, some of the text material is placed in the speaker’s notes rather than on a slide. If you want slides for this material, create a new slide, then copy and paste from the Speaker’s Notes.

Fellow instructors:

Foundations of Information Systems in Business

Chapter1

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

1-3

• Understand the concept of a system and how it relates to information systems.

• Explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need.

Learning Objectives

1-4

Learning Objectives

• Give examples to illustrate how business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage.

• Provide examples of several major types of information systems from your experiences with business organizations in the real world.

1-5

• Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business.

• Provide examples of the components of real world information systems

• Demonstrate familiarity with the myriad of career opportunities in information systems.

Learning Objectives

1-6

Competitive Advantage

• “Developing products, services, processes, or capabilities that give a company a superior business position relative to its competitors and other competitive forces.”

Glossary, p. 637

• Attributed to a firm that is … “leading an industry in some identifiable way, such as sales, revenues or new products.” Ch. 2, p. 53

• “…when a firm sustains profits that exceed the average for an industry …”

Ch. 2, p. 53

1-7

Trends in Information Systems

1-8

What is E-Business?

• An online exchange of value– Conducting business on the Internet

• Using Internet technologies to empower…– Business processes– Electronic commerce– Collaboration within a company– Collaboration with customers, suppliers, and

other business stakeholders

1-9

How E-Business is Being Used

1-10

E-Business Use

• Reengineering– Internal business processes

• Enterprise collaboration systems– Support teams and work groups

• Electronic commerce– Buying, selling, marketing, and servicing of

products and services over networks

1-11

Types of Information Systems

1-12

Information systems combine:

• Operations Support Systems (Figure 1.7)

– Transaction Processing systems– Process Control Systems– Enterprise Collaboration Systems

• Management Support Systems (Figure 1.9)

– Management Information Systems– Decision Support Systems– Executive Information Systems

• Other Systems (Figure 1.11)

– Expert Systems– Knowledge Management Systems– Strategic Information Systems

1-13

Two Ways to Process Transactions

• Transaction Processing (batch)– Accumulate transactions over time – Process periodically– Example: a bank receives checks during the day

and processes in a batch at night

• Online Processing (real-time)– Process transactions immediately– Example: a bank processes an ATM withdrawal

immediately

1-14

Types of Management Support Systems

• Management Information Systems (MIS)– Reports and displays – Example: daily sales analysis reports

• Decision Support Systems (DSS)– Interactive and ad hoc support– Example: a what-if analysis to determine where

to spend advertising dollars

• Executive Information Systems (EIS)– Critical information for executives and

managers– Example: easy access to actions of

competitors

1-15

Other Information Systems

• Expert Systems– Example: credit application advisor

• Knowledge Management Systems– Support creation, organization, and dissemination

of business knowledge Example: intranet access to best business practices

• Strategic Information Systems– Help get a strategic advantage over customer– Examples: shipment tracking, e-commerce Web

systems

• Functional Business Systems– Focus on operational and managerial applications

Examples: accounting, finance, or marketing

1-16

IT Challenges and Opportunities

1-17

Responsibility and Accountability

• IT plays an integral role in every facet of a business

• Failure is often pinned on IT• Cultivate a culture that embraces change• Break projects into pieces• Set realistic expectations• There will always be problems

– “That’s life in IT”

1-18

Agile Systems Development at Con-Way, Inc.

• Old system – Months long design stage– Months or years to develop– Some projects never completed

• Agile System– Small segments with one month deadlines– Interaction between staff and IT– Feedback from each segment drives the next– Faster overall completion and less waste

1-19

Developing IS Solutions

1-20

Challenges and Ethics of IT

• What are the ethical responsibilities?• What are the risks?• How can you protect yourself and your

company from computer crime?

1-21

Hannaford – Securing Customer Data

• Security breach – millions of credit and debit card numbers stolen

• Law suits argued inadequate security caused risk for fraud

• Credit companies complained about expense to issue new account numbers

• Securing sensitive data is a primary concern

1-22

IT Careers

• IT employment opportunities are strong • Shortages of IT personnel are frequent• Long-term job outlook is positive and

exciting• Starting salaries are high

1-23

IT Careers

• Job increases will be driven by…– Rapid growth

– Backfilling positions

– Information sharing environments

– Need for problem-solving skills

– Falling hardware and software prices

1-24

IT Careers

1-25

Business Analysts serve critical role

• CIO – broker between management and IT

• Business Analyst– In the trenches

– Analyzes business need and creates solution

– Communicates solution to technicians

– Balances IT resources with business needs

• Business Analyst credentials– 5-10 years experience

– Technical undergraduate degree and MBA

– Process driven through changes to finish

– $45,000 to $100,000

1-26

The IS Function

• Major functional area of business

• Important contributor to – Efficiency, productivity, morale, customer service

and satisfaction

• Major source of information for decisions

• Vital ingredient in developing competitive products and services

• Dynamic and challenging career opportunity

• Key component of networked business

1-27

System Concepts help us understand…

• Technology– Hardware, software, data management,

telecommunications networks

• Applications– Programs to support inter-connected systems

• Development– Developing ways to use information technology

• Management– Emphasizes the quality, strategic business

value, and security of an organization’s information systems

1-28

What is a System?

• Interrelated components

• Defined boundary

• Working together

• Common objectives

• Accepting inputs and producing outputs

• Organized transformation process

1-29

RWC 2: Innovating with IT

• New York Times– Newspaper industry in trouble– Elevated IT-enabled innovation

• BlackBerry applications• On-screen reading system

• Boston Scientific– Open sharing of engineering data– Tighter control near patent application stage

1-30

• Basic Functions– Input– Processing– Output

• Cybernetic System– Feedback– Control

Basic Functions of a System

1-31

A Cybernetic System

What are the components for feedback and control?

1-32

A Business as a System

1-33

Information System Resources

• People Resources– Specialists– End users

• Hardware Resources– Machines– Media

• Software Resources– Programs– Procedures

1-34

Information System Resources

• Data Resources– Product descriptions, customer records,

employee files, inventory databases

• Network Resources– Communications media, communications

processors, network access and control software

• Information Products– Management reports and business documents

using text and graphics displays, audio responses, and paper forms

1-35

IS Activities

• Input of data resources• Processing of data into information• Output of information products• Storage of data resources• Control of system performance

1-36

RWC 3: Role of Information Technology

• Sew What? – Provides custom theatrical draperies and fabrics

worldwide– Revenue growing more than 45% per year– Recognized for innovative use of technology to

improve its customers’ experience• Intuit’s Quick-Books Enterprise Solutions • Dell PowerEdge servers

1-37

RWC 4: Critical Importance of IT Processes

• Jet Blue – Good IT processes are as important as

hardware and software– Smaller and less critical processes have large

ramifications– Crisis in 2007

• Information system developed in 24 hours • Implemented as a full-time system in the company

• Veterans Administration– System failure took down key applications