Foundations of Information Systems in Business

1. Chapter 1 Foundations of Information Systems in Business

2. Learning Objectives • Understand the concept of a system and how it relates to information systems • Explain why knowledge of information systems is important for business professionals • Identify five areas of information systems knowledge they need

3. Learning Objectives • Give examples to illustrate how information systems can support a firm’s • Business processes • Managerial decision making • Strategies for competitive advantage • Provide examples of information systems from your experiences with business organizations in the real world

4. Learning Objectives • Identify challenges that managers might face in managing successful, ethical development and use of information technology • Provide examples of the components of real world information systems • Become familiar with the myriad of career opportunities in information systems

5. Foundation Concepts Vital component of successful businesses Improves efficiency and effectiveness of business processes Why studyinformation systems and information technology? Facilitates managerialdecision making& workgroup collaboration Strengthens competitive position in rapidly changing marketplaces

6. Case 1: Value Through Business Intelligence • eCourier • Tracks customersatisfaction in real time • Immediate attention to complaints, problems • Allows GPS tracking of couriers and orders • Books 95% of deliveriesonline • Uses SeeWhy softwareto spot trends and anomalies • Optimizes system on an ongoing basis

7. Case 1: Value Through Business Intelligence • Cablecom • Uses online surveys to retain customers • Responds to complaints and problems within 24 hours • Bryan Cave • Optimizes resources while delivering highest customer value • Allows lawyers to track budgets in real time • Provides diversity dashboard • Enables firm to monitor client needs • Allows quick response to demands

8. Case Study Questions • How do information technologies contribute to the business success of the companies depicted in the case? • Provide an example from each company, explaining how the technology implemented led to improved performance

9. Case Study Questions • The Bryan Cave law firm used BI technology to improve the availability, access, and presentation of existing information; this allowed them to provide tailored, innovative services to customers • What other professions could benefit from a similar use of these technologies, and how?

10. Case Study Questions • Cablecom developed a prediction model to better identify customers at risk of switching to another company • In addition to those noted in the case, what other actions could be taken if that information were available? • Would you consider letting some customers leave anyway?

11. What is an Information System? Communicationnetworks Policies andprocedures People Data resources Hardware andsoftware Stores, retrieves, transforms, and disseminates informationin an organization Any organizedcombination of…

12. Early Information Systems • They weren’t computerized • Smoke signals • Library card catalogs • Book bag, day planner, and notebooks • Cash registers • Accounting ledger

13. What Should Business Professionals Know?

14. Fundamental Roles of IS in Business

15. Trends in Information Systems

16. What is E-Business? Using Internet technologies to empower… Business processes Electronic commerce Collaboration within a company Collaboration with customers, suppliers,other business stakeholders In essence, an online exchange of value

17. How E-Business is Being Used

18. E-Business Use Reengineering Enterprise collaboration Electronic commerce Internal business processes Support communication, coordination, coordination among teams and work groups Buying, selling, marketing, and servicing of products and services over networks

19. Types of Information Systems Transaction processing Operations Process control Enterprise collaboration Updating of corporate databases Decision support systems Management Executive information systems

20. Purposes of Information Systems

21. Types of Operations Support Systems Transaction Processing Systems Record and process business transactions Sales, inventory, and accounting Process Control Systems Monitor and control physical processes Using sensors to monitor refinery processes Enterprise Collaboration Systems Enhance team/workgroup communication Email, video conferencing

22. Two Ways to Process Transactions Process all transactions immediately Ex: A bank processes ATM withdrawals immediately Accumulate transactions over time and then process periodically Ex: Banks process all checks in a batch at night Online Processing Batch Processing

23. Management Support Systems Management information systems Decision support systems Executive information systems What do they do? Provide information and support foreffective decision making by managers

24. 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

25. Other Information Systems Expert Systems Provides expert advice Credit application advisor Knowledge Management Systems Creation, organization, dissemination of knowledge throughout company Intranet access to best business practices

26. Other Information Systems Strategic Information Systems Helps get strategic advantage Shipment tracking, e-commerce Functional Business Systems Focus on operational and managerial application of basic business functions Accounting, finance, marketing

27. IT Challenges and Opportunities

28. Measuring IT Success • Efficiency • Minimizes cost, time, use of informationresources • Effectiveness • Supports business strategies • Enables business processes • Enhances organizational structure and culture • Increases customer and business value

29. Developing IS Solutions

30. Challenges and Ethics of IT Application of IT Customer relationship management Human resource management Business intelligence systems Potential Harm Privacy infringement Inaccurate information Collusion

31. Challenges and Ethics of IT PotentialRisks Consumer boycotts Work stoppages Government intervention PossibleResponses Codes of ethics Incentives Certification

32. Ethical Responsibilities • What uses of IT might be considered improper or harmful to other individuals or society? • What is the proper business use of the Internet or a company’s IT resources? • How can you protect yourself from computer crime?

33. IT Careers Economic downturns affecting all job sectors, including IT Negative Rising labor costs are pushing jobs to India, the Middle East, Asia-Pacific IT employment opportunities strong, with new jobs emerging daily Positive Frequent shortages of IT personnel Long-term job outlook is positiveand exciting

34. IT Careers

35. IT Careers Job increases will be driven by… Rapid growth in computer system design and related services The need to backfill positions Information sharing andclient/server environments Need for those with problem-solving skills Falling hardware and software prices, which fuel expanded computerization of operations

36. The IS Function Major functional area of business Dynamic and challenging career opportunity Important contributor to operational efficiency, employee productivity, morale, customer service/satisfaction Vital ingredient in developing competitive products and services in global marketplace Major source of information and support for decision making Key component of today’s networked business

37. System Concepts: A Foundation Hardware, software, data management, telecommunications networks Technology Applications To support inter-connected information systems Development Finding ways to use information technology; includes designing basic information system components Management Emphasizes the quality, strategic business value, and security of an organization’s information systems

38. Case 2: JetBlue & the VA • Good IT processes are as important as hardware and software when it comes to creating business value • Even smaller, less-critical processes can have ramifications of a large magnitude in the interconnected world in which we live • The IS developed by JetBlue in 24 hours, implemented during a crisis in 2007, is now a full-time system • An unscheduled system failure took down key applications in 17 VA medical facilities for a day

39. Case Study Questions • Eric Brinker of JetBlue noted that the database developed during the crisis had not been needed before; the company had never experienced a meltdown • What are the risks and benefits associated with this approach to IT planning?

40. Case Study Questions • With hindsight, we know that the decision made by Eric Raffin of the VA to not fail over to the Denver site was the correct one. But, it involved ignoring established backup procedures • With the information he had at the time, what other alternatives could he have considered?

41. Case Study Questions • A small, undocumented change resulted in the collapse of the VA system, largely due to the high interrelationship between its applications • What is the positive side of this high degree of interconnection, and how does this benefit patients?

42. 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

43. Basic Functions of a System Processing Output Input Transforma-tion process converts input into output Transferring transformed elements to their ultimate destination Capturing and assembling elements that enter the system to be processed

44. Cybernetic System • All systems have input, processing, output • A cybernetic system, a self-monitoring, self-regulating system, adds … • Feedback… system performance data • Control… monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal

45. A Cybernetic System

46. A Business as a System

47. Other System Characteristics • A system that is a component of a larger system is a subsystem • The larger system is an environment • Several systems may share one environment • Connected via a shared boundary (interface) • Types of systems… • Open and Adaptive

48. Components of an IS

49. Information System Resources InformationSystem Resources People Information Hardware Networks Software Data

50. Data Versus Information • Data are raw facts, typically about physical phenomena or business transactions • Specifically, objective measurements of the attributes of entities • Information is data that was converted into meaningful and useful context for end users • Aggregated, manipulated, and organized • Analyzed and evaluated • Placed in proper context for a human user