Foundation of IS in Business PDF

Chapter
1
Foundations of
Information Systems in Business
PREPARED BY: MARY ROSE G. GREGORIO, CHRA
McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc. All rights reserved.
Topic Overview
• Information System Foundations and Concepts; and

• The fundamental role of IS application in business.
Foundation Concepts
Why study information systems ?
• Vital component of successful businesses

• Helps businesses expand and compete
• Improves efficiency and effectiveness of
business processes
• Facilitates managerial decision making and workgroup collaboration
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 disseminates information in an
organization
Information Technologies
• Information Systems
• All the components and resources necessary to deliver information
and functions to the organization
• Could be paper based
• Information Technologies
• Hardware, software, networking, data management
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 use information technology
includes designing the basic components of information systems
• Management: emphasizes the quality, strategic business value, and
security of an organization’s information systems
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 producing outputs
• In an organized transformation process
1-7
Basic Functions of a System
• Input
• Capturing and assembling elements that enter the system to be
processed
• Processing
• Transformation process that converts input into output
• Output
• Transferring transformed elements to their ultimate destination
1-8
Components of an IS
1-9
Information System Resources
• People Resources
• Specialists
• End users
• Hardware Resources
• Machines
• Media
• Software Resources
• Programs
• Procedures
1-10
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 Resources
• Management reports and business documents using text and graphics
displays, audio responses, and paper forms
1-11
Data Versus Information
• Data are raw facts about physical phenomena or business

transactions
• Information is data that has been converted into meaningful and
useful context for end users
• Examples:
• Sales data is names, quantities, and dollar amounts
• Sales information is amount of sales by product type, sales territory,
or salesperson
1-12
Fundamental Roles of IS in Business
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 managers during decision-making
Purposes of Information Systems
Operations Support Systems
• What do they do?

• Efficiently process business transactions
• Control industrial processes
• Support communications and collaboration
• Update corporate databases
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
Two Ways to Process Transactions
• Batch Processing
• Accumulate transactions over time and process periodically
• Example: a bank processes all checks received in a batch at night
• Online Processing
• Process transactions immediately
• Example: a bank processes an ATM withdrawal immediately
Management Support Systems
• What do they do?

• Provide information and support for effective decision making by
managers
• Management information systems
• Decision support systems
• Executive information systems
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
Other Information Systems
• Expert Systems
• Provide expert advice
• Example: credit application advisor
• Knowledge Management Systems
• Support creation, organization, and dissemination of business
knowledge throughout company
• Example: intranet access to best business practices
Other Information Systems
• 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 of basic business
functions
• Examples: accounting, finance, or marketing
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
1-23
Evolution of Information Systems
Trends in Information System
• Enterprise Resource Planning

• Benefits of Networking
• Data Mining, a Powerful Tool
• Educational Programs
1-25
End of slides
THANKYOU! 
1-26

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Chapter

PREPARED BY: MARY ROSE G. GREGORIO, CHRA

• Information System Foundations and Concepts; and

Why study information systems ?

• Vital component of successful businesses

• An organized combination of…

• System concepts help us understand…

• Data are raw facts about physical phenomena or business

• Operations Support Systems

• What do they do?

• Transaction Processing Systems

• What do they do?

• Management Information Systems (MIS)

• Strategic Information Systems

• Input of data resources

• Enterprise Resource Planning

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