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Foundations of Enterprise Information System

Why should you study information systems?How does a firm use information systems?

What are the components of an information system?

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McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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Learning Objectives1. Understand the concept of a system and how it

relates to information systems.2. Explain why knowledge of information systems is

important for business professionals and identify five areas of information systems knowledge they need.

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

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Learning Objectives4. Provide examples of several major types of

information systems from your experiences with business organizations in the real world.

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.

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Learning Objectives6. Provide examples of the components of real world

information systems. Illustrate that in an information system, people use hardware, software, data and networks as resources to perform input, processing, output, storage, and control activities that transform data resources into information products.

7. Become familiar with the myriad of career opportunities in information systems.

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Why study Information Systems and Information Technology?

Vital component of successful businessesHelps businesses expand and competeBusinesses use IS and IT

To improve efficiency and effectiveness of business processesFor managerial decision makingFor workgroup collaboration

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What is a system?A system

Is a set of interrelated componentsWith a clearly defined boundaryWorking together to achieve a common set of objectives

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What is an Information System?An organized combination of

PeopleHardwareSoftwareCommunications networksData resourcesPolicies and procedures

That stores, retrieves, transforms, and disseminates information in an organization

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Information System (IS) versus Information Technology (IT)

IS is all the components and resources necessary to deliver information and functions to the organizationIT is hardware, software, networking and data management

In theory, IS could be paper based But we will focus on Computer-Based Information Systems (CBIS)

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IS Knowledge Framework for Business Professionals

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What should a Business Professional know about IS?

Foundation Concepts: fundamental behavioral, technical, business and managerial conceptsInformation Technology: Hardware, software, networks, data management and Internet-based technologyBusiness Applications: Major uses of the IS in the organizationDevelopment Processes: How to plan, develop and implement IS to meet business opportunitiesManagement Challenges: The challenges of effectively and ethically managing IT

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What does IS do for a business?

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Business Applications expanding role over time

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Types of IS

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Operations support systemsWhat are they?

Efficiently process business transactionsControl industrial processesSupport communications and collaborationUpdate corporate databases

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Types of Operations Support Systems

Transaction Processing SystemsRecord and process data from business transactionsExamples: sales processing, inventory systems, accounting systems

Process Control SystemsMonitor and control physical processesExample: in a petroleum refinery use sensors to monitor chemical processes

Enterprise Collaboration SystemsEnhance team and work group communicationsExamples: e-mail, videoconferencing

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Two ways to process transactions

Batch Processing:Accumulate transactions over time and process periodicallyExample: a bank processes all checks received in a batch at night

Online Processing:Process transactions immediatelyExample: a bank processes an ATM withdrawal immediately

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Management Support SystemsWhat are they?

Provide information and support for effective decision making by managers

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Types of Management Support Systems

Management Information Systems (MIS)Provide reports and displays to managersExample: daily sales analysis reports

Decision Support Systems (DSS)Provide interactive ad hoc support for decision makingExample: A what-if-analysis to determine where to spend advertising dollars

Executive Information Systems (EIS)Provide critical information for executives and managersExample: easy access to actions of competitors

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Operational or Management Systems

Expert SystemsProvide expert adviceExample: credit application advisor

Knowledge Management SystemsSupport creation, organization and dissemination of business knowledge throughout companyExample: Intranet access to best business practices

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Classifications of IS by scopeFunctional business systems

Focus on operational and managerial applications of basic business functionsExamples: support accounting, finance or marketing

Strategic information systemsHelp get a strategic advantage over its customersExamples: shipment tracking, e-commerce web systems

Cross-functional information systemsSystems that are combinations of several types of information systemsProvide support for many functions

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Measuring success of an ISEfficiency

Minimize cost, time and use of information resourcesEffectiveness

Support business strategiesEnable business processesEnhance organizational structure and culture Increase the customer and business value

What’s the difference between Efficiency and Effectiveness?

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Developing IS Solutions

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Ethical challenges of IT applications

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Ethical responsibilitiesWhat 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?

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IT CareersOutsourcing of basic programming to India, the Middle-East and Asia-Pacific countriesStrong employment opportunities in other areas in ISShortage of qualified IS personnelLong-term job outlook positive and exciting

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Career Opportunities in IS

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Job growthAmong the fastest growing occupations through 2012

Systems Analyst,Database administrators, Other managerial-level positionsNetwork specialistsInformation security

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What is a system?A system

Is a set of interrelated componentsWith a clearly defined boundaryWorking together to achieve a common set of objectivesBy accepting inputs and producing outputs in an organized transformation process

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Systems have three basic functions:

Input involves capturing and assembling elements that enter the system to be processedProcessing involves transformation process that convert input into outputOutput involves transferring elements that have been produced by the transformation process to their ultimate destination

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A business as a system

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Information systems model

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Components of an ISPeople

End users: the people who use the IS or the information from the ISIS specialists: the people who develop and operate IS

Hardware ResourcesAll physical devices used in information processingMachines, data media, peripherals

Software ResourcesAll information processing instructions including programs and proceduresSystem software, application software and procedures

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Components of an IS (cont.)

Data ResourcesFacts about the business transactionsProcessed and organized informationDatabases of organized data

Network ResourcesCommunications mediaNetwork infrastructure: hardware and softwareThe Internet, intranets and extranets

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Data versus InformationData are raw facts about physical phenomena or business transactionsInformation is data that has been converted into meaningful and useful context for end usersExample:

Sales data is names, quantities and dollar amountsSales information is amount of sales by product type, sales territory or salesperson

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IS ActivitiesInput of data resources

Data entry activitiesProcessing of data into information

E.g., calculate, compare, sort, classify, summarizeOutput of information products

Messages, reports, forms and graphic imagesStorage of data resources

Data elements and databasesControl of system performance

Monitoring and evaluating feedback

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Thanks.