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Foundations of Information Systems

The document provides an overview of information systems and their role in business. It discusses what an information system is, using an example of how raw data from a supermarket checkout can be processed into useful sales information. It then covers characteristics of useful information like being relevant, complete, accurate, current and economical. The document outlines functions of an information system including input, processing, output and feedback. It discusses how information systems support business objectives like operational excellence, new products/services, customer intimacy, decision making, competitive advantage and survival. Finally, it looks at the roles of information system professionals and the skills needed, including problem solving, critical thinking and understanding both business and technology.

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Alandrea Allyson
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46 views

Foundations of Information Systems

The document provides an overview of information systems and their role in business. It discusses what an information system is, using an example of how raw data from a supermarket checkout can be processed into useful sales information. It then covers characteristics of useful information like being relevant, complete, accurate, current and economical. The document outlines functions of an information system including input, processing, output and feedback. It discusses how information systems support business objectives like operational excellence, new products/services, customer intimacy, decision making, competitive advantage and survival. Finally, it looks at the roles of information system professionals and the skills needed, including problem solving, critical thinking and understanding both business and technology.

Uploaded by

Alandrea Allyson
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 32

Foundations of Information

Systems

What is an Information
System?
An information system is an arrangement
of people, data, processes, interfaces, and
technology that interacts to produce
information to support business processes,
problem-solving, and decision making

Information System Example

Raw data from a supermarket checkout counter can


be processed and organized to produce meaningful
information, such as the total unit sales of dish
detergent or the total sales revenue from dish
detergent for a specific
store or sales territory.
Figure 1-1
(Laudon and Laudon, 2009)

Characteristics of Useful
Information

Relevan
t

Information must pertain to the problem at


hand. For example the total number of years of
education might not be relevant to a persons
qualification for a new job. Relevant
information might be that the person has so
many years in mechanical engineering and so
many years of experience. The information
must also be presented in a way that helps a
person understand it in a specific context.

Complet
e

Partial information is often worse than no


information. For example, marketing data about
household incomes might lead to bad decisions if not
accompanied by vital information on the
consumption habits of the targeted population

Accurate

Erroneous information might lead to disastrous


decisions. For example an
inaccurate record of a
Management Information
patients reaction to penicillin
might
lead a doctor to
System,
Effy Oz

Characteristics of Useful
Information
Current

Decisions are often based on the latest


information available, but what was fact
yesterday might no longer be one today.
For example, a short-term investment
decision to purchase a stock today based
on yesterdays stock prices might be a
costly mistake if the stocks price has
risen in the interim.

Economic In a business setting, the cost of obtaining


al
information must be considered as one cost
element involved in any decision. For example,
demand for a new product must be researched
to reduce risk of marketing failure, but if
market research is too expensive, the cost of
Management
Information
obtaining the information
might diminish
profit
System, Effy Oz
from sales.

Functions of an Information
System
An
information
system
contains information about
an organization and its
surrounding
environment.
Three
basic
activities
input,
processing,
and
outputproduce
the
information
organizations
need. Feedback is output
returned
to
appropriate
people or activities in the
organization to evaluate
and
refine
the
input.
Environmental actors, such
as customers, suppliers,
6
competitors,
stockholders,

Figure 1-2

The Role of Information System in a


Company

Business Drivers of Information


Systems
Businesses invest in IT to achieve six important
business objectives.
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival
(Laudon and Laudon, 2009)
8

Operational Excellence
Information systems and technologies help

improve efficiency and productivity which


results in higher profits.
E.g., Walmart

Power of combining information systems

and best business practices to achieve


operational efficiencyover $405 billion in
sales in 2010

Most efficient store in world as result of

digital links between suppliers and stores

(Laudon and Laudon, 2009)


9

New Products, Services, and Business


Models
Information systems and technologies
enable firms to create new products,
services, and business models.
Business model: how a company produces,
delivers, and sells its products and services
E.g., Apple
Transformed old model of music distribution
with iTunes
Constant innovationsiPod, iPhone, iPad, etc.
(Laudon and Laudon, 2009)
10

Customer and Supplier


Intimacy
Customers who are served well become
repeat customers who purchase more.
Mandarin Oriental hotel
Uses IT to foster an intimate relationship
with its customers, keeping track of
preferences, and so on
Close relationships with suppliers result in
lower costs.
JCPenney
11

IT to enhance relationship with supplier in


Hong Kong

Improved Decision Making


If managers rely on forecasts, best
guesses, and luck, they will misallocate
employees, services, and inventory.
Real-time data improves ability of
managers to make decisions.
Verizon: Web-based digital dashboard to
update managers with real-time data on
customer complaints, network
performance, and line outages

12

Competitive Advantage
Often results from achieving previous
business objectives
Advantages over competitors:
Charging less for superior products, better
performance, and better response to
suppliers and customers
E.g., Apple, Walmart, UPS are industry leaders
because they know how to use information
systems for this purpose
13

(Laudon and Laudon, 2009)

Survival
Businesses may need to invest in
information systems out of necessity;
simply the cost of doing business.
Keeping up with competitors
Citibanks introduction of ATMs
Federal and state regulations and
reporting requirements
Toxic Substances Control Act and
the SarbanesOxley Act
14

How Information Systems Will


Affect
Business Careers
Accounting:
Accountants increasingly rely on
information systems to summarize
transactions, create financial records,
organize data, and perform financial
analysis.
Skills:
Knowledge of databases and networks
15

Online financial transactions and


reporting systems

How Information Systems Will


Affect
Finance:
Business
Careers
Relationship between information systems
and financial management and services is
so strong that many advise finance majors
to co-major in information systems.
Skills:
Use systems for financial reporting, direct
investment activities, implement cash
management strategies

16

Plan, organize, implement information


systems strategies for the firm

How Information Systems Will


Affect
Business Careers
Marketing:
No field has undergone more technologydriven change in the past five years than
marketing and advertising.
Skills:
Work with databases for tracking and
reporting on customer behavior, product
performance, customer feedback,
product development
17

Enterprise systems for product


management, sales force management,

Organizational Chart for an


Information Systems Department

18

Who is an Information System


Professional?
Speaks the
language of
the business

19

Speaks the
language of
Technology

Why is an Information System


Professional Important?

20

Why is an Information System


Professional Important?
Qassim (2008) identified the following

challenges faced by Information Technology


Projects
Unsuccessful IT projects are more likely than

successful projects.
Nearly 20% of IT projects are satisfactory.
Failure rates are much more likely in case of
large size IT projects compared to small and
medium size projects

21

Why is an Information System


Professional Important?
The top 5 indicators found in

Challenged projects
1. Lack of User Input
2. Incomplete Requirements & Specifications
3. Changing Requirements & Specifications
4. Lack of Executive Support
5. Technical Incompetence

(Robert, 2003)

22

Why is an Information System


Professional Important?

23

93%
OF ALL
RUNAWAYS
STEM FROM
POOR
COMMUNICATIO
N

Reason 3

65%
OF THOSE
BECOME
RUNAWAYS
(2 TO 3 TIMES
OVER BUDGET
& SCHEDULE)

Reason 2

Reason1

95%
OF ALL I/S
PROJECTS
SLIDE INTO
COST AND
TIME
OVERRUNS

Source: KPMGs System Mgmt.


Group Computerworld, April 25,
1994

Required Skill Set for the


Information System
Professional
The Problem-Solving Approach

Information Systems professional should be able


to solve organizational problems with the aid of
technology.
Few
business
problems
are
simple
or
straightforward.
Most business problems involve a number of
major factors that can fall into three main
categories: Organization, Technology and People

24

Required Skill Set for the


Information System
Professional

25

Typical organizational problems

Outdated business processes

Unsupportive culture and attitudes

Political in-fighting

Turbulent business environment, change

Complexity of task

Inadequate resources

Required Skill Set for the


Information System
Professional

26

Typical technology problems

Insufficient or aging hardware

Outdated software

Inadequate database capacity

Insufficient telecommunications capacity

Incompatibility of old systems with new


technology

Rapid technological change

Required Skill Set for the


Information System
Problem Solving
Is a Continuous Four-Step Process
Professional
During
implementation
and
thereafter,
the
outcome
must
be
continually measured
and the information
about how well the
solution is working is
fed
back
to
the
problem solvers. In
this
way,
the
identification of the
problem can change
27
over time, solutions

Figure 1-4

Required Skill Set for the


Information System
The Role of Critical Thinking in Problem Solving
Professional
Without critical thinking, easy to jump
to conclusions, misjudge a problem,
and waste resources
Critical thinking:
Sustained suspension of judgment with
an awareness of multiple perspectives
and alternatives

28

Required Skill Set for the


Information System
The Professional
Role of Critical Thinking in Problem Solving
Four elements of critical thinking:
1. Maintaining doubt and suspending judgment
2. Being aware of different perspectives
Including technology, organization, and
people perspectives
3. Testing alternatives and letting experience
guide
29

4. Being aware of organizational and personal


limitations

How Many of You Aspire to be a


Chief Information Officer (CIO)?
The changing role of the CIO in the

business
http://
www.computerweekly.com/feature/The-changi
ng-role-of-the-CIO-in-the-business
The ever-expanding role of the CIO

By Walker White April 06, 2016


http
://www.itproportal.com/2016/04/06/the-everexpanding-role-of-the-cio/
30

Jobs Available Locally for


Information Systems Professionals

31

Jobs Available Locally for


Information Systems Professional

32

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