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Chapter 1

Information Systems in Business

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What is an Information System? An Information System (IS) is a collection

of components that work together to provide information to help in the operations and management of an organization.

Information Technology is the integration of computers, communications equipment, and other technologies used in information systems.

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Data versus Information Data represents a fact, a number,

a word, an image, a picture or a sound.

Information is data that is meaningful or useful to someone.

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Components of an Information System? Components

Hardware - Equipment such as computers and Communication devices

Software - Instructions for the equipment

Stored Data - Facts stored in the system Personnel - People who use and

manage the system Procedures - Instructions for the people

to follow

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What is a Computer A computer is a device that is

1. Electronic2. Can store data3. Can store and follow a set of software

instructions, called a program.

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Computer hardware Input devices Output devices Secondary storage Primary storage Central Processing Unit (CPU)

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Input devices An input device accepts data

from outside the computer and converts it into an electronic form the computer can understand. Examples include keyboard, Mouse,

trackball

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Output devices An output device converts data

from an electronic form inside the computer to a form that can be used outside the computer. Examples include printer, Monitor,

Plotter

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Secondary storage devices Secondary storage, also called

auxiliary storage, stores data not currently being processed by the computer and represents permanent storage.

Data is usually transferred to and from Secondary storage. Examples include hard disk drive, floppy

disk drive, ZIP disk drive, CDROM, and DVD.

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Primary storage Primary storage, also called internal

storage, is the “memory”, or RAM, of the computer.

Primary storage, which is temporary storage, is dependent upon continuous electrical power. Any interruption of electrical power causes the contents of primary storage to be lost.

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Central Processing Unit The CPU, or processor, carries out

the instructions of the program. It contains circuits that control the operations of the hardware and the circuitry that performs arithmetic and logical operations. Control Unit (CU) Arithmetic Logic Unit (ALU)

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Software System software – designed to

make computers usable. It includes operating system.

Application software – designed for specific computer applications for a business or organization. Examples include accounting

Software, Word processing software.

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Stored Data Data that is stored in a machine

readable form.

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Personnel Users IS personnel

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How Users Use Information Systems Users may use an information system

directly by pressing keys on a computer keyboard or by operating a piece of equipment that sends input data to a computer.

A user may use an information system indirectly by having someone else enter the data and receive the output which is then given to the user.

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Procedures Instructions for:

Users IS personnel

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Examples of Information Systems An order entry system Point-of-sale system An inventory control system Purchasing System Receiving System A production scheduling system Sales analysis system General ledger system

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Information Systems Functions

Input Function accepts the input data from outside the system.

Storage Function retains input data and retrieves stored data.

Processing Function calculates and in other ways manipulates the input and stored data.

Output Function produces results of processing for use outside the system.

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Types of IS Personnal or Information Systems Workgroup information systems Organizational information

systems Interorganizational information

systems Global information systems

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Types of Information Systems Personal information systems

Word Processing Spreadsheet or financial analysis Database Graphics or presentation software

Workgroup information systems Electronic mail (e-mail) Teleconferencing system

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Types of Information Systems (cont’d.) Organizational information systems

Account receivable system Payroll System

Interorganizational information systems Electronic Data Interchange (EDI) Electronic Funds Transfer (EFT)

Global information systems Production scheduling system for an

international company

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Ethical Use of Information Systems Ethics has to do with the standards

of behavior that people follow: what is right and what is wrong.

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Ethical Use of Information Systems (cont’d.) Ethical use of information systems

involves: Confidentiality of information Copying of software Use of someone else’s computer Ownership of information

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Networks A network is a collection of

computers and related equipment connected using communications equipment so that they can communicate with each other. Local Area Networks (LAN) cover a

small area such as a building. Wide Area Networks (WAN) cover a

large area such as a city, region, country or several countries.

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The Internet and the World Wide Web (WWW) The Internet is a worldwide

collection of interconnected networks.

The World Wide Web (WWW) is a service on the Internet that links information stored on different computers.

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Electronic Commerce(E-Commerce) E-Commerce allows businesses

and individuals to use networks, including the Internet, to promote and sell products and services.

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Benefits of Information Systems Better information Improved service Increased productivity Competitive advantage