Week 1 2 - Foundation of Information System in Business
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Transcript of Week 1 2 - Foundation of Information System in Business
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7/31/2019 Week 1 2 - Foundation of Information System in Business
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Foundations of
Information Systems inBusiness
Chapter
1 ( week 1 & 2 )
McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
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1. Understand the concept of a systemand how it relates to informationsystems
2. Explain why knowledge ofinformation systems is important forbusiness professionals
Identify five areas of informationsystems knowledge needed
Learning Objectives
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3. Give examples to illustrate how businessapplications of information systems cansupport a firms
Business processes
Managerial decision making
Strategies for competitive advantage
4. Provide examples of information systems
from your experiences with businessorganizations in the real world
Learning Objectives
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Learning Objectives
5. Identify challenges that a businessmanager might face in managing thesuccessful, ethical development and
use of information technology6. Provide examples of the components
of real world information systems
7. Become familiar with the myriad ofcareer opportunities in informationsystems
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Case 1: Sew What? Inc.
Sew What? provides custom theatrical draperies andfabrics for stages, concerts, fashion shows, andspecial events worldwide.
After launching the company web site, they acquiredclients from all over the world and their revenue has
been growing more than 45% per year. Sew What? runs most of its business with Intuits
Quick-Books Enterprise Solutions & Dell PowerEdgeservers.
Recently, the National Federation of IndependentBusinesses (NFIB) and Dell Inc. presented SewWhat? Small Business Excellence Award inrecognition of its innovative use of technology toimprove its customers experience.
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Case Study Questions
1. How do information technologiescontribute to the business successof Sew What? Inc.? Give several
examples from the case regardingthe business value of informationtechnology that demonstrate this
conclusion.
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Case Study Questions
2. If you were a managementconsultant to Sew What? Inc., whatwould you advise Megan Duckett to
do at this point to be even moresuccessful in her business? Whatrole would information technology
play in your proposals? Provideseveral specific recommendations.
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Case Study Questions
3. How could the use of informationtechnology help a small businessyou know be more successful?
Provide several examples to supportyour answer.
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Foundation Concepts
Why study information systems andinformation technology?
Vital component of successful
businesses
Helps businesses expand and compete
Improves efficiency and effectiveness of
business processes Facilitates managerial decision making
and workgroup collaboration
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What is an Information System?
An organized combination of
People
Hardware and software
Communication networks Data resources
Policies and procedures
This system
Stores, retrieves, transforms, and disseminatesinformation in an organization
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Information Technologies
Information Systems
All the components and resourcesnecessary to deliver information and
functions to the organization
Could be paper based
Information Technologies
Hardware, software, networking, datamanagement
Our focus will be on computer-based
information systems (CBIS) 1-11
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What Should Business Professionals Know?
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Fundamental Roles of IS in Business
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Trends in Information Systems
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What is E-Business?
Using Internet technologies toempower
Business processes
Electronic commerce
Collaboration within a company
Collaboration with customers, suppliers,
and other business stakeholders
In essence, an online exchange ofvalue
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How E-Business is Being Used
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E-Business Use
Reengineering
Internal business processes
Enterprise collaboration systems
Support communications, coordinationand coordination among teams andwork groups
Electronic commerce Buying, selling, marketing, and servicing
of products and services over networks
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Types of Information Systems
Operations Support Systems
Efficiently process business transactions
Control industrial processes
Support communication and collaboration Update corporate databases
Management Support Systems
Provide information as reports and displays
Give direct computer support to managersduring decision-making
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Purposes of Information Systems
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Operations Support Systems
What do they do?
Efficiently process businesstransactions
Control industrial processes
Support communications andcollaboration
Update corporate databases
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Types of Operations Support Systems
Transaction Processing Systems
Record and process business transactions
Examples: sales processing, inventory
systems, accounting systems Process Control Systems
Monitor and control physical processes
Example: using sensors to monitor chemical
processes in a petroleum refinery
Enterprise Collaboration Systems
Enhance team and workgroup communication
Examples: email, video conferencing 1-21
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Two Ways to Process Transactions
Batch Processing
Accumulate transactions over time andprocess periodically
Example: a bank processes all checksreceived in a batch at night
Online Processing
Process transactions immediately
Example: a bank processes an ATMwithdrawal immediately
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Management Support Systems
What do they do?
Provide information and support foreffective decision making by managers
Management information systems
Decision support systems
Executive information systems
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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 determinewhere to spend advertising dollars
Executive Information Systems (EIS) Critical information for executives and
managers
Example: easy access to actions of
competitors 1-24
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Other Information Systems
Expert Systems
Provide expert advice
Example: credit application advisor
Knowledge Management Systems
Support creation, organization, anddissemination of business knowledgethroughout company
Example: intranet access to bestbusiness practices
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Other Information Systems
Strategic Information Systems
Help get a strategic advantage overcustomer
Examples: shipment tracking, e-commerce Web systems
Functional Business Systems
Focus on operational and managerialapplications of basic business functions
Examples: accounting, finance, or
marketing 1-26
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IT Challenges and Opportunities
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Measuring IT Success
Efficiency
Minimize cost, time, and use ofinformation resources
Effectiveness
Support business strategies
Enable business processes
Enhance organizational structure andculture
Increase customer and business value
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Developing IS Solutions
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Challenges and Ethics of IT
Application of IT
Customer relationship management
Human resources management
Business intelligence systems
Potential Harm
Infringements on privacy
Inaccurate information
Collusion
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Challenges and Ethics of IT
Potential Risks
Consumer boycotts
Work stoppages
Government intervention
Possible Responses
Codes of ethics
Incentives
Certification
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Ethical Responsibilities
What uses of IT might be consideredimproper or harmful to otherindividuals or society?
What is the proper business use ofthe Internetor a companys IT resources?
How can you protect yourself fromcomputer crime?
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IT Careers
Economic downturns have affected all jobsectors, including IT
Rising labor costs are pushing jobs to
India,the Middle East, and Asia-Pacific countries
However, IT employment opportunities arestrong, with new jobs emerging daily
Shortages of IT personnel are frequent
The long-term job outlook is positive andexciting
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IT Careers
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IT Careers
Job increases will be driven by
Rapid growth in computer system design andrelated services
The need to backfill positions Information sharing and client/server
environments
The need for those with problem-solving skills
Falling hardware and software prices, whichwill fuel expanded computerization ofoperations
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The IS Function
The IS function is A major functional area of business
An important contributor to operationalefficiency, employee productivity, morale,
customer service and satisfaction A major source of information and support for
decision making
A vital ingredient in developing competitive
products and services in the global marketplace
A dynamic and challenging career opportunity
A key component of todays networked business
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System Concepts: A Foundation
System concepts help us understand Technology: hardware, software, data
management, telecommunications networks
Applications: to support inter-connected
information systems
Development: developing ways to useinformation technology includes designing thebasic components of information systems
Management: emphasizes the quality, strategicbusiness value, and security of an organizations
information systems
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Real World Case: JetBlue and the VeteransAdministration
Good IT processes are as important as hardwareand software when it comes to creating businessvalue through the use of technology.
Even seemingly smaller and less critical processescan have ramifications of a large magnitude in theinterconnected world in which we live.
The information system, which was developed byJetBlue in 24 hours and implemented in the middleof crisis in 2007, has now been implemented as a
full-time system in the company.
At Veterans Administration an unscheduled systemfailure took down key applications in 17 (VA)medical facilities for a day
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Case Study Questions
1. Eric Brinker of JetBlue noted that thedatabase developed during the crisishad not been needed before since
the company had never experienceda meltdown. What are the risks andbenefits associated with this
approach to IT planning? Providesome examples of each.
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Case Study Questions
2. With hindsight, we now know thatthe decision made by Eric Raffin ofthe VA not to fail over to the Denver
site was the correct one. However, itinvolved failing to follow establishedbackup procedures. With theinformation he had at the time, what
other alternatives could he haveconsidered? Develop at least two ofthem.
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Case Study Questions
3. A small, undocumented changeresulted in the collapse of the VAsystem, largely because of the high
interrelationship between itsapplications. What is the positiveside of this high degree of
interconnection, and how does thisbenefit patients? Provide examplesfrom the case to justify your answer.
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What is a System?
A system is
A set of interrelated components
With a clearly defined boundary Working together
To achieve a common set of objectives
By accepting inputs and producingoutputs
In an organized transformation process
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Basic Functions of a System
Input
Capturing and assembling elements thatenter the system to be processed
Processing
Transformation process that convertsinput into output
Output Transferring transformed elements to
their ultimate destination
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Cybernetic System
All systems have input, processing, andoutput
A cybernetic system, a self-monitoring,
self-regulating system, adds feedback andcontrol:
Feedback is data about the performance of asystem
Control involves monitoring and evaluatingfeedback to determine whether a system ismoving toward the achievement of its goal
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A Cybernetic System
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A Business as a System
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Other System Characteristics
If a system is one of the componentsof a larger system, it is a subsystem
The larger system is an environment
Several systems may share the sameenvironment
Some may be connected via a sharedboundary, or interface
Types of systems
Open
Adaptive1-47
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Components of an IS
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Information System Resources
People Resources
Specialists
End users
Hardware Resources
Machines
Media
Software Resources
Programs
Procedures 1-49
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Information System Resources
Data Resources Product descriptions, customer records,
employee files, inventory databases
Network Resources
Communications media, communicationsprocessors, network access and controlsoftware
Information Resources Management reports and business documentsusing text and graphics displays, audioresponses, and paper forms
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Data Versus Information
Data are raw facts about physicalphenomena or business transactions
Information is data that has been
converted into meaningful and usefulcontext for end users
Examples:
Sales data is names, quantities, and dollaramounts
Sales information is amount of sales byproduct type, sales territory, or salesperson
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IS Activities
Input of data resources Data entry activities
Processing of data into information
Calculations, comparisons, sorting, and so on
Output of information products
Messages, reports, forms, graphic images
Storage of data resources
Data elements and databases Control of system performance
Monitoring and evaluating feedback
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Recognizing Information Systems
Business professionals should beable to look at an information systemand identify
The people, hardware, software, data,and network resources they use
The type of information products they
produce
The way they perform input, processing,output, storage, and control activities
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Case 3: Heidelberg, Honeywell, and Eaton
Today, it is not be enough for a company tooffer services but it will have to providesmart services.
To provide smart services, companies must
use information technology to build smartproducts.
Smart products can detect that a part is
approaching failure and alert users, thusgiving the company opportunity to providemaintenance services and enjoy theresulting benefits.
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Case 3: Heidelberg, Honeywell, and Eaton
Heidelberg developed the technology to monitorits equipment remotely, using built-in sensors,networking microprocessors, and otherinformation technologies.
With such smart services, Heidelberg now offerstotal support of its products.
Eaton corporation has developed a product calledHome Heartbeat which monitors the status of
various home systems and alerts the homeownerwhen something is wrong.
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Case Study Questions
1. Why should manufacturing companies build smartproducts and provide smart services? What businessbenefits can they gain? Provide several examplesbeyond those discussed in this case.
2. What information technologies are used by the
companies in this case to build smart products andprovide smart services? What other IT componentsmight be used? Give examples of the capabilities theywould provide.
3. What are some limitations of a smart products andsmart services strategy? Give several examples ofchallenges that a business might encounter, andexplain how it might overcome them.
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Case 4: Lufthansa
In 2001, Lufthansa launched the Lufthansa Mobile
Initiative, which aimed to provide all pilots withnotebook computers.
It helps 3,500 highly mobile airline pilots plugged intothe corporate infrastructure, that informs them about
schedules, weather events, and other facts that affecttheir jobs throughout the world.
The Lufthansa Mobile Initiative is yielding significantproductivity and efficiency improvements, whilekeeping costs manageable.
Pilots use their notebook computers for computer-based training whether they are learning about newaircraft or things like specific hydraulic systems.
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Case Questions
1. Are many of Lufthansas challenges identified in
the case similar to those being experienced byother businesses in todays global economy?
Explain and provide some examples.
2. What other tangible and intangible benefits,
beyond those identified by Lufthansa, might amobile workforce enjoy as a result of deployingmobile technologies? Explain.
3. Lufthansa was clearly taking a big risk with theirdecision to deploy notebook computers to theirpilots. What steps did they take to manage thatrisk, and what others might be needed in todays
business environment? Provide some examples.