Lecture Management information systems (9/e) – Chapter 1: Foundations of information systems in business

In this chapter, the learning objectives are: Understand the concept of a system and how it relates to information systems; explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need; give examples to illustrate how business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage.

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Foundations of Information Systems

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1 Explain why knowledge of information systems

is important for business professionals and

identify five areas of information systems

knowledge they need.

2 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.

Learning Objectives

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Learning Objectives

of information systems from your

experiences with business organizations

in the real world

business manager might face in

managing the successful and ethical

development and use of information

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Learning Objectives

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

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Why Study Information Systems?

of businesses improve the efficiency and effectiveness of their business processes, managerial decision making, and

workgroup collaboration, thus

strengthening their competitive positions

in a rapidly changing marketplace

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Why Study Information Systems

necessary ingredient for business

success in today’s dynamic global

environment

expanding role in business

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Case #1: Athens Olympics Network

unique project is that the athletes aren’t going to stop running just because the

server does

• Major Components:

• Games Management System (GMS)

• Information Diffusion System (IDS)

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• Collected and distributed event results and

rankings to press agencies and certain websites

• Live feed for broadcasters commenting on

events

• Results, rankings, statistics and biographies

available to commentators 3 seconds after the athletes crossed the line

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Goals & Constraints:

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• Constructed the network in such a way that

service could be provided even if one of the routers was damaged.

• Stored data in two physically distant data

centers (in different earthquake zones).

that every stupid thing that can happen

was planned for.”

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1 Could the 2004 Athens Olympics have been a

success without all of the networks and

backup technologies?

2 How would your 2004 Olympics experience

changed without the GMS and IDS systems?

3 The 2004 Olympics is a global business Can

a business today succeed without information technology? Why or why not?

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“crazy scenarios of what might happen

in every area: a network problem, staff stopped in a traffic jam, a security

attack… everything that might happen,” was the reason for so much testing

Can you think of other businesses that would require “crazy scenario” testing? Explain

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systems in place limited to one-time systems like those at the Olympics or should they exist in other business

environments? Explain your position and provide specific examples

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What is an Information System?

Any organized combination of people,

hardware, software, communications

networks, and data resources that stores, retrieves, transforms, and disseminates

information in an organization

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Information Systems vs

Information Technology

Information Systems vs

Information Technology

• Information Systems (IS) – all

components and resources necessary to deliver information and information

processing functions to the organization

• Information Technology (IT) – various

hardware components necessary for the system to operate

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Types of Information Technologies

• Computer Hardware Technologies

including microcomputers, midsize servers, and large

mainframe systems, and the input, output, and storage devices that support them

• Computer Software Technologies

including operating system software, Web browsers,

software productivity suites, and software for business

applications like customer relationship management and supply chain management

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Types of Information Technologies

• Telecommunications Network

Technologies

including the telecommunications media, processors,

and software needed to provide wire-based and wireless access and support for the Internet and private Internet- based networks

• Data Resource Management

Technologies

including database management system software for

the development, access, and maintenance of the

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Conceptual Framework of IS Knowledge

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Roles of IS in Business

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Trends in Information Systems

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What is E-Business?

Definition:

and empower business processes,

electronic commerce, and enterprise

collaboration within a company and with its customers, suppliers, and other

business stakeholders

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Enterprise Collaboration Systems

Definition:

support communication, coordination, and collaboration among the members of

networked teams and workgroups

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What is E-Commerce?

Definition:

The buying and selling, and marketing

and servicing of products, services, and information over a variety of computer

networks

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Types of Information Systems

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Operation Support Systems

Definition:

generated by and used in business

operations

transactions, control industrial processes, support enterprise communications and

collaboration, and update corporate

databases

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Examples of Operations Support Systems

process data resulting from business

transactions, update operational databases, and produce business documents.

control industrial processes.

team, workgroup, and enterprise

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A Transaction Processing System Example

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Management Support Systems

Definition:

providing information and support for

effective decision making by managers

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Management Support Systems

provide information in the form of pre-specified reports and displays to support business

decision making.

interactive ad hoc support for the decision

making processes of managers and other

business professionals.

critical information from MIS, DSS, and other

sources tailored to the information needs of

executives.

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A Decision Support System Example

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Operational & Managerial IS

• Expert Systems – provide expert advice

for operational chores or managerial

decisions

• Knowledge Management Systems –

support the creation, organization, and

dissemination of business knowledge to employees and managers

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IS Classifications by Scope

business functions

processes that provide a firm with strategic

products, services, and capabilities for

competitive advantage

integrated combinations of information systems

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Management Challenges & Opportunities

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• Support an organization’s business strategies

• Enable its business processes

• Enhance its organizational structure and culture

• Increase the customer business value of the

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Developing IS Solutions

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The Systems Development Lifecycle

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Ethical Challenges of IT

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IT Career Trends

• Rising labor costs have resulting in large-scale

movement to outsource programming functions to India, the Middle East and Asia-Pacific countries.

• More new and exciting jobs emerge each day as

organizations continue to expand their wide-scale use of IT.

• Frequent shortages of qualified information systems

personnel.

• Constantly changing job requirements due to dynamic

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The IS Function represents…

equally as important to business success

as the functions of accounting, finance,

operations management, marketing, and human resource management

efficiency, employee productivity and

morale, and customer service and

satisfaction

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needed to promote effective decision

making by managers and business

professionals

competitive products and services that

give an organization a strategic

advantage in global marketplace

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career opportunity for millions of men and women

infrastructure, and capabilities of today’s networked business enterprise

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Case #2: Connecting the Mobile Workforce

Goals:

• Trained on the latest technology and

procedures

• Plugged into the corporate infrastructure

• Informed about schedules, weather events, and other facts that affect their jobs

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Productivity and Efficiency Improvements:

• Pilots can access updated data electronically.

• Pilots can work in a variety of locations including

airplanes, airports, hotels, and other remote

locations.

• Pilots appreciate the convenience of not having

to carry heavy manuals and documentation to

multiple locations.

• Pilots can take their required training on their

laptops during downtime in any airport.

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identified in the case similar to those

being experienced by other businesses

in today’s global economy? Explain and provide some examples

benefits, beyond those identified by

Lufthansa, might a mobile workforce

enjoy as a result of deploying mobile

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with their decision to deploy notebook

computers to their pilots What steps did they take to manage that risk and what

others might be needed in today’s

business environment? Provide some

examples

your productivity and efficiency?

Provide some examples

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performance, and management might

arise with the use of mobile computing

devices in the field and in the cockpit? What preventive actions or solutions to these potential problem areas could you suggest?

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What is a System?

Definition:

A group of interrelated components, with

a clearly defined boundary, working

together toward a common goal by

accepting inputs and producing outputs in

an organized transformation process

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System Components

• Input – capturing and assembling

elements that enter the system to be

processed

• Processing – transformation steps that

convert input into output

• Output – transferring elements that have

been produced by a transformation

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Cybernetic Systems

Definition:

a self-monitoring, self-regulating system

• Feedback – data about the performance

of a system

• Control – monitoring and evaluating

feedback to determine whether a system

is moving toward the achievement of its

goal

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Example of a Cybernetic System

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A Business System

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IS Resources & Activities

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Information System Resources

• People – end users and IS specialists

• Hardware – physical devices and

materials used in information processing including computer systems, peripherals, and media

• Software – sets of information processing

instructions including system software,

application software and procedures

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Information Systems Resources (con’t)

physical phenomena or business

transactions

• Network – communications media and

network infrastructure

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Data vs Information

about physical phenomena or business

transactions

• Information – data that have been

converted into a meaningful and useful

context for specific end users

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Network Resources

• Communications Media – examples

include twisted-pair wire, coaxial and

fiber-optic cables, microwave, cellular,

and satellite wireless technologies

• Network Infrastructure – examples include

communications processors such as

modems and internetwork processors,

and communications control software

such as network operating systems and

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Information Systems Activities

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Recognizing Information Systems

Fundamental Components of IS

network resources used

control activities performed

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Case #3: Failure to Success with IT

Aviall on the Ropes:

• A failed enterprise resource planning system

that had been designed to automate and

integrate the company’s order processing,

inventory control, financial accounting, and

human resources business systems

• Couldn’t properly order or ship items to

customers

• Quarterly sales dropping

• Airline industry shrinking

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Goals:

full-scale logistics business that hundreds

of aviation parts manufacturers and

airlines could depend on for ordering,

inventory control, and demand forecasting

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Challenges:

software systems from different software providers

who receive various types of discounts

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Benefits of Aviall.com:

• Customer order obtained via web costs only 39

cents compared with $9 for an order taken via telephone

• Sales force freed from routine order taking can

devote more time to developing relationships

with customers

• Customers have the ability to transfer orders

from an Excel spreadsheet directly to website

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Benefits of Aviall.com (con’t):

• Customers can receive pricing and availability

information on parts within 5 seconds

• Helps build relationships with suppliers by

providing them with customer ordering data that enables them to better match production with

demand

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Case #3: Aviall Inc.

1 Why do you think that Aviall failed in their

implementation of an enterprise resource

planning system? What could they have done differently?

2 How has information technology brought new

business success to Aviall? How did IT

change Aviall’s business model?

3 How could other companies use Aviall’s

approach to the use of IT to improve their

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