Management information system ralp 7e ch01

Principles of Information Systems, Seventh Edition 3• Models, computers, and information systems are constantly making it possible for organizations to improve the way they conduct busi

• The value of information is directly linked to how it helps

decision makers achieve the organization’s goals

• Discuss why it is important to study and understand

information systems

Principles of Information Systems, Seventh Edition 3

• Models, computers, and information systems are

constantly making it possible for organizations to

improve the way they conduct business

• Name the components of an information system and

describe several system characteristics

• Identify the basic types of models and explain how they are

used

• Knowing the potential impact of information systems and

having the ability to put this knowledge to work can result in

a successful personal career, organizations that reach their goals, and a society with a higher quality of life

• List the components of a computer-based information system

• Identify the basic types of business information systems and

discuss who uses them, how they are used, and what kinds of

Principles of Information Systems, Seventh Edition 5

• System users, business managers, and information

systems professionals must work together to build a

successful information system

• Identify the major steps of the systems development

process and state the goal of each

• Information systems must be applied thoughtfully and

carefully so that society, business, and industry can reap their enormous benefits

• Describe some of the threats to security and privacy that

information systems and the Internet can pose

Principles of Information Systems, Seventh Edition 7

Introduction

• Information system (IS)

• A set of interrelated components that collect, manipulate,

and disseminate data and information and provide feedback

to meet an objective

• Examples: ATMs, airline reservation systems, course

reservation systems

Information Concepts:

Data Versus Information

• Data: raw facts

• Information: collection of facts organized in such a

way that they have additional value beyond the facts

themselves

Principles of Information Systems, Seventh Edition 9

Table 1.1: Types of Data

Figure 1.1: Defining and Organizing Relationships Among Data Creates Information

Principles of Information Systems, Seventh Edition 11

Figure 1.2: The Process of

Transforming Data into Information

Table 1.2: Characteristics of Valuable Data

Principles of Information Systems, Seventh Edition 13Table 1.2: Characteristics of Valuable

Data (continued)

System and Modeling Concepts

• System: a set of elements or components that interact to

Principles of Information Systems, Seventh Edition 15Figure 1.3: Components of a System

System Components and Concepts

• System boundary: defines the system and distinguishes

it from everything else (i.e., the environment)

• Configuration: the way system elements are organized

or arranged

• Systems can be classified as simple or complex, open or

closed, stable or dynamic, adaptive or nonadaptive, and permanent or temporary

Principles of Information Systems, Seventh Edition 17Table 1.3: Systems Classifications and

Their Primary Characteristics

System Performance and Standards

• Efficiency: a measure of what is produced divided by

what is consumed

• Effectiveness: extent to which system attains its goals

• System performance standard: a specific objective of a

system

Principles of Information Systems, Seventh Edition 19

System Variables and Parameters

• System variable: quantity or item controlled by the

decision maker

• System parameter: value or quantity that cannot be

controlled (e.g., the cost of a raw material)

Modeling a System

• Model: an abstraction that is used to represent reality

• Four major types of models: narrative (based on words);

physical (tangible); schematic (graphic representation); mathematical (arithmetic representation)

Principles of Information Systems, Seventh Edition 21Figure 1.6: Four Types of Models

Figure 1.7: The Components of an

Information System

Principles of Information Systems, Seventh Edition 23

Input, Processing, Output, Feedback

• Input: activity of gathering and capturing raw data

• Processing: converting or transforming data into useful

outputs

• Output: production of useful information, usually in

form of documents and reports

• Feedback: output used to make changes to input or

processing activities

Computer-Based Information Systems

• Computer-based information system (CBIS)

• A single set of hardware, software, databases,

telecommunications, people, and procedures that are

configured to collect, manipulate, store, and process data into information

• Examples: a company’s payroll systems, order entry

system, and inventory control systems

Principles of Information Systems, Seventh Edition 25Figure 1.8: The Components of a

Computer-Based Information System

Business Information Systems

• Most common types of information systems used in

business organizations include:

• Electronic and mobile commerce systems

• Transaction processing systems

• Management information systems

• Decision support systems

Principles of Information Systems, Seventh Edition 27

Electronic and Mobile Commerce

• E-commerce: any business transaction executed

electronically between parties

• Parties involved include companies (B2B); companies

and consumers (B2C); consumers and other consumers (C2C); businesses and the public sector; consumers and the public sector

Transaction Processing Systems and

Enterprise Resource Planning

• Transaction: any business-related exchange, such as

payments to employees, sales to customers, and payments

to suppliers

• Transaction processing system (TPS): an organized

collection of people, procedures, software, databases, and devices used to record completed business transactions

Principles of Information Systems, Seventh Edition 29

Figure 1.11: A Payroll Transaction

Processing System

The inputs (numbers of employee hours worked and pay rates) go

through a transformation process to produce outputs (paychecks)

Enterprise Resource Planning

• Enterprise resource planning (ERP) system: set of

integrated programs that can manage a company’s entire set of business operations

• ERP systems often coordinate planning, inventory

control, production, and ordering

Principles of Information Systems, Seventh Edition 31

Information and Decision Support

Systems

• Management information system (MIS): an organized

collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers

• Primary focus of an MIS is on operational efficiency

Figure 1.12: Functional Management

Information Systems

Principles of Information Systems, Seventh Edition 33

Decision Support Systems

• Decision support system (DSS): an organized collection

of people, procedures, software, databases, and devices used to support problem-specific decision making

• Focus of a DSS is on decision-making effectiveness

Principles of Information Systems, Seventh Edition 35Figure 1.13: Essential DSS Elements

Specialized Business Information Systems

• Artificial intelligence (AI) systems

• Virtual reality systems

• Expert systems

• Other special-purpose business information systems

Principles of Information Systems, Seventh Edition 37Figure 1.14: The Major Elements of

Artificial Intelligence

Systems Development

• Systems development: the activity of creating or

modifying existing business systems

• Systems investigation: gaining a clear understanding of

the problem to be solved or opportunity to be addressed

• Systems analysis: defines the problems and opportunities

of the existing system

Principles of Information Systems, Seventh Edition 39Figure 1.17: An Overview of

Systems Development

Systems Development (continued)

• Systems design: determines how new system will work

to meet business needs defined during systems analysis

• Systems implementation: creating or acquiring the

various system components defined in design step,

assembling them, and putting new system into operation

• Systems maintenance and review: check and modify

system so that it continues to meet changing business

needs

Principles of Information Systems, Seventh Edition 41

Information Systems in Society,

Business, and Industry

• Information systems must be implemented thoughtfully

and carefully

• Information systems face a variety of threats from

unethical people

Figure 1.18: Attacks on Businesses and

Other Organizations in One Year

Principles of Information Systems, Seventh Edition 43Figure 1.19: The Cost and Cause of

Computer Attacks

Computer and Information Systems

Literacy

• Computer literacy: knowledge of computer systems and

equipment and the ways they function

• Information systems literacy: knowledge of how data

and information are used

Principles of Information Systems, Seventh Edition 45

Information Systems in the Functional

Areas of Business

• Finance and accounting (e.g., forecast revenues and

business activity; analyze investments; perform audits)

• Sales and marketing (e.g., product analysis; promotion

analysis; price analysis)

• Manufacturing (e.g., process orders; develop schedules;

control inventory)

Information Systems in Industry

• Airline industry (e.g., Internet auction sites)

• Investment firms (e.g., analyze stocks and bonds)

• Banks (e.g., online check payment)

• Transportation industry (e.g., schedule trucks and trains)

Principles of Information Systems, Seventh Edition 47

Information Systems in Industry

(continued)

• Healthcare organizations (e.g., track patient records)

• Retail companies (e.g., process customer orders)

• Power management and utility companies (e.g., monitor

and control power generation and usage)

• Professional services (e.g., provide information on

products and services to its consultants)

• Data: raw facts

• Information: collection of facts organized in such a way

that they have value beyond the facts themselves

• System: a set of elements that interact to accomplish a

Principles of Information Systems, Seventh Edition 49

Summary (continued)

• Computer-based information system (CBIS): a single

set of hardware, software, databases, telecommunications, people, and procedures that are configured to collect,

manipulate, store, and process data into information

• Transaction processing system (TPS): an organized

collection of people, procedures, software, databases, and devices used to record completed business transactions

Summary (continued)

• Management information system (MIS): an organized

collection of people, procedures, software, databases, and devices used to provide routine information to managers and decision makers

• Decision support system (DSS): an organized collection

of people, procedures, software, databases, and devices used to support problem-specific decision making

• Systems development: the activity of creating or

modifying existing business systems