MOD 1: Contents

• Introduction to IT
• Introduction to IS
• Difference between IS and IT
• Need for Information System
• Information System in the enterprise
• Impact of IT on business
• Business data processing
• Intra and Inter organisation communication using network technology
• BPO, KPO
• Managers and activities in IS
• Importance of information system in decision making and strategy building
• Information systems and subsystems (to be discussed in detail mod 2)
Introduction to IT
• Information: Information is a knowledge communicated or received
concerning a particular fact or circumstance.
• Technology: Technology refers to methods, systems, and devices
which are the result of scientific knowledge being used for practical
purposes.
• IT: Information technology (IT) is the use of digital technologies to
store, process, and transmit data and information. It includes hardware
such as computers, servers, and storage devices, as well as software,
networks, and other digital technologies. IT is used to support a wide
range of functions, from basic data processing to complex business
operations, such as finance, marketing, and supply chain management.
Information System Definition
• "Information system is set of people, information technology,
and business process in order to achieve a business objective.“ (OR)
• Information systems are a set of interconnected elements working
together to collect, process, store, and distribute information to help
coordination, visualization in an organization, analysis, and decision-
making. (OR)
Components of IS:
CONTD.,
1. Computer Hardware: Physical equipment used for input, output and processing. The
hardware structure depends upon the type and size of the organization. It consists of an input and
an output device, operating system, processor, and media devices. This also includes computer
peripheral devices.
2. Computer Software: The programs/ application program used to control and coordinate the
hardware components. It is used for analysing and processing of the data. These programs
include a set of instruction used for processing information.
• Software is further classified into 3 types:
1. System Software
2. Application Software
3. Procedures
3. Databases: Data are the raw facts and figures that are unorganized that are later processed to
generate information. Softwares are used for organizing and serving data to the user, managing
physical storage of media and virtual resources. As the hardware can’t work without software the
same as software needs data for processing. Data are managed using Database management
system.
Database software is used for efficient access for required data, and to manage knowledge bases.
CONTD.,
4. Network:
• Networks resources refer to the telecommunication networks like the intranet, extranet and the
internet.
• These resources facilitate the flow of information in the organization.
• Networks consists of both the physical devices such as networks cards, routers, hubs and cables
and software such as operating systems, web servers, data servers and application servers.
• Telecommunications networks consist of computers, communications processors, and other
devices interconnected by communications media and controlled by software.
• Networks include communication media, and Network Support.
5. Human Resources: It is associated with the manpower required to run and manage the system.
People are the end user of the information system, end-user use information produced for their
own purpose, the main purpose of the information system is to benefit the end user. The end user
can be accountants, engineers, salespersons, customers, clerks, or managers etc. People are also
responsible to develop and operate information systems. They include systems analysts, computer
operators, programmers, and other clerical IS personnel, and managerial techniques.
CONTD.,
Examples of Information Technology:
Information technology is used in a wide range of fields, from business and education to healthcare and
government. Here are some examples of how IT is used in various sectors:
1. Business: IT is used extensively in business to support a wide range of functions, including
accounting, finance, marketing, and supply chain management. Businesses use software applications
such as customer relationship management (CRM) systems, enterprise resource planning (ERP)
systems, and business intelligence (BI) tools to manage their operations and make informed decisions.
2. Education: IT is used in education to support teaching and learning activities. Students and teachers
use learning management systems (LMS), online course materials, and collaboration tools to facilitate
distance learning and enhance classroom instruction.
3. Healthcare: IT is used extensively in healthcare to manage patient records, support clinical decision-
making, and facilitate communication among healthcare providers. Electronic health records (EHRs),
telemedicine, and health information exchange (HIE) systems are examples of how IT is used in
healthcare.
4. Government: IT is used in government to support a wide range of functions, including tax collection,
law enforcement, and public services. Governments use IT systems to manage their operations and
provide services to citizens, such as online portals for tax filing and passport applications.
Difference between IS and IT :
IS IT
1. IS incorporates the technology people and 1. IT is The design and implementation of
process involved with information. information or data within the information
2. IS professionals are typically more integrated in system.
using technology and other systems to 2. IT professionals while serving any important
accomplish business objectives. information to the overall organisation are more
3. IS focuses on the framework, processes and focused on the machines and hardware and
software systems.
procedures that enable the effective use of data
to support business process and decision making. 3. IT focuses on technology infrastructure hardware
software and network that enable data processing
4. IS encompasses a broader range of technology,
and communication.
including database software application and
networks, as well as human elements necessary 4. It has a narrower scope than is it deals primarily
to effectively manage and use data. with the hardware and software components of
the technology information.
5. The role of IS is to support business process and
decision making through the effective use of 5. The role of IT is to provide users with the tools
data. and infrastructure necessary to manage and utilise
information effectively.
Contd.,
IS IT
6. IS professionals require broader skill set that 6. IT professionals require technological
includes technology expertise as well as expertise in areas such as computer hardware,
knowledge of business process, data management software and networks.
and project management.
7. IT is subsystem of IS.
7. IS is a software used to organise and analyse
data. 8. The main purpose is to help people perform
their work properly and effectively and
8. The main purpose in IS is to turn raw data into
achieve their objectives within organisational
useful information for making decisions within
the organisation or business. business.
9. It is generally composed of components that 9. Generally composed of three components
ie., tasks people structure and technology. hardware and software, network and data.
10. It helps in storing operational data 10. It helps in implementing communication,
communication records, documents and revision build and grow commerce and business
histories. sectors, improve reputation of business, etc.
 Need for Information System in Organization
1. Supporting Corporate Strategy :There are three fundamental policies used by
organisation to complete in the market.
• Provide goods and services at a lower price than their competitors, to stay ahead.
• Produce unique goods and services that distinguish them for their competitors.
• Search a particular Marketplace and put all, their focus and efforts for meeting
requirements of the Marketplace.
The above three strategies are not manually exclusive. So any organisation can use
this combination to stay ahead of competition and to implement this strategies.
Information system and technologies play an important role.
2. Meeting Global Challenges : With the globalization, competition on a global
scale is increased. To survive in this competition organisation produce the high
quality products and services to maintain the quality and management of products,
people and process around the world, organizations need accurate and reliable
information at the right time.
Contd.,
3. Capturing Opportunities in Marketplace : Successful companies
are able to retain and grow their business over a long period of time.
These companies identify and take benefits of opportunities in the
Marketplace. Information system that helps a company to identify
strategic growth opportunity are known as strategic information system.
4. Linking Departments with Different Functions : Previously
organizations having a different department with diverse functions
lacked co-ordination among them. Due to this reason organisation faced
the loss of opportunities and increase inefficiencies.
Now a days , almost all organisation treat all different departments as
working together with co-ordination where in the working of each
department is important to achieve business goals.
Contd.,
5. Enhancing Worker Productivity :
• Information system and technologies are essential tools for a business.
For example, it helps in creating their payrolls, estimating performance of
employees, managing the shop floor, tracking customers and re-order items because
this functions have a significant impact on the day-to-day running activities of any
organisation.
6. Increasing Quality of Goods and Services : Quality is a major component in
every organisation. One of the most popular and widely used approaches to enhance
the quality of goods and services in an organisation is total quality management.
Enhancement of quality often involves coordinating tasks and decisions of many
department and units, which are sometime located across the globe. Since the
quality oriented decisions are extremely information sensitive so information
system helps the organisation to reach its goals by providing the correct information
to the right person at right time.
Impact of IT on Business
1. Automation
• With the help of information technology, businesses can automate certain processes and
tasks including customer support, data entry, and bookkeeping.
• This reduces the need for manual labor and frees up time for employees to focus on
their core competencies.
• Automation can help businesses become more efficient and save time, money, and
resources.
2. Artificial Intelligence
• Information technology has enabled businesses to use Artificial Intelligence (AI) to
streamline their operations.
• AI can analyze data quickly and accurately, making it easier for businesses to make
well-informed decisions quickly.
• It also helps reduce the need for manual labor and the associated costs. This is
especially helpful when large amounts of data need to be analyzed and processed.
Contd.,
3. Improved Productivity
• Information technology helps businesses increase their productivity by allowing them to access data quickly and
accurately, which can help improve decision-making processes.
• In addition, it enables businesses to communicate more effectively with customers and staff, helping ensure that projects
are completed on time and within budget.
• Improved productivity can lead to increased profits, as businesses will be able to produce more products or services in
less time.
4. Improved Customer Service
• Information technology helps businesses interact with customers in real-time, thus providing them with better customer
service.
• Businesses can also use AI to handle complex customer queries and provide personalized experiences to customers.
This helps build customer loyalty and improves brand reputation.
5. Cloud Computing
• Cloud computing is another way that information technology has revolutionized businesses. By using cloud-based
applications, businesses can store and access data from any device or location.
• This can help businesses save resources and time by eliminating the need to install software on individual devices or
maintain server hardware. In addition, it makes collaboration between employees easier as they can access the same
data from anywhere.
• Increasingly, businesses are shifting to the cloud computing to leverage its many benefits. It has been predicted that
more than $1 trillion will be impacted in IT spending.
Contd.,
6. Remote Working
• Information technology enables businesses to provide their employees with the option of remote working. This can
help reduce costs associated with office space and increase productivity by allowing employees to work from
anywhere in the world.
• In addition, it helps businesses become more flexible as they can hire employees without having to worry about
geographical boundaries.
• Implementation of information technology provides the ability to remotely access your company’s network, throw
on a headset, and get things done with your team.
• As a result, it equips employees with the ability to get the work done even if they are not physically present at the
workplace.
• Such agility has a number of benefits. Therefore, it has gained massive popularity.
7. Mobile Technology
• The increasing use of mobile technology has enabled businesses to access data and communicate with customers
in real-time.
• Businesses are now able to offer their customers a wide range of products and services via their mobile devices.
This increases customer engagement, which can lead to increased sales and revenues.
• In addition, it enables businesses to better manage their operations, as they can easily monitor and track data in
real-time.
• Mobile technology has become an integral part of businesses in today’s digital world and its importance is set to
continue growing.
Contd.,
8. Cyber Security
• The use of information technology has created a need for businesses to secure their networks
from cyber threats. Businesses are now investing more in cyber security solutions such as
firewalls and antivirus software to protect their data from hackers and malware.
• In addition, businesses are also taking steps to educate their employees on the importance of
cyber security and how to stay safe online.
• This is crucial as cyber attacks can have a devastating effect on businesses, resulting in
financial losses and damage to their reputation.
9. Management of Resources
• Information technology has enabled businesses to better manage their resources.
• This includes the ability to monitor and track employee performance, inventory levels,
customer data, and financial information in real-time.
• Businesses can also use software applications such as enterprise resource planning (ERP)
systems to manage their operations more efficiently. ERP systems enable businesses to manage
their resources in a more cost-effective way.
Business data processing
Contd.,
Contd.,
Intra and Inter organisation communication
using network technology
Contd.,
Contd.,
BPO & KPO
What is BPO?
• In its purest form, the BPO definition explains that Business Process
Outsourcing pertains to the outsourcing of specific functions, segments and
processes of business organizations to third party organisations. BPO is very
important for reducing costs and maximising efficiency. These are the primary
reasons behind big and small organizations hiring the expertise of BPO
organizations. BPOs are instrumental in bringing consistency and productivity to
the pre-determined processes assigned to them by their clients.
What is KPO?
• The Knowledge Process Outsourcing or KPO definition explains it as the
transferor assigning of information plus knowledge related processes/ functions to
a third-party organization. The KPO is usually an entity that is different from the
leading company. It may also be a subsidiary of the organization that is located in
a different or same country for the sake of minimizing costs.
Advantages & Disadvantages of BPO :
1) Concentration on Main Business : By giving part of the work outside, the organisation can
concentrate more on the main business and carry out expansion more efficiently.
2) Reduces the Overheads : Outsourcing generally reduces the total expenses of an organisation as
part of the work is done by less paid work force.
3) Increase in Quality : By outsourcing a part of the activity to a specialized agency, can increase the
quality of the final output of an organisation.
4) Reduces the Stress : Outsourcing reduces the stress on a company's work force as the
responsibility now gets divided.
Disadvantages of BPOs:
1) Leads to Unemployment : Outsourcing can result in making some employees redundant in the
original organisation and can lead to unemployment, as is happening in USA at the moment.
2) Reduces the Desire of Work : Outsourcing lessens the desire of the existing work force to put in
their maximum productivity as they would like more and more part of the work getting outsourced.
3) Loses its Knowledge : Outsourcing can result in a company doing only trading and lose its
manufacturing knowledge and expertise altogether. Car manufacturers in USA, for example, may stop
manufacturing cars altogether, if they outsource entire production to Korea or Japan.
4) Trade Secrets are Out : Outsourcing can result in letting out trade secrets to outside organisations
and hence, the original company lose its own expertise altogether.
Advantages & Disadvantages of KPO :
1. Reduce its operational or production cost by creating new processes or
streamlining efficiency
2. Films the gap or need for skilled employees
3. KPO frees up existing staff: Boosting, efficiency and productivity
4. Flexibility: To increase or reduce the staff easily
Disadvantages
5. Privacy: lost, copied or brought to a competitor
6. Less control: Companies have left control over their hiring process of
outsourced workers.
7. Communication problem existing employees might feel threatened by
the hiring of outsourced workers and feel their jobs are at risk
What is an IS Manager?
Information systems managers, sometimes called information technology (IT)
managers or IT project managers, are in charge of all computer-related activities in
an organization. By planning, coordinating, and providing help to individuals in a
business, they ascertain the IT goals of an organization. As such, they are
responsible for implementing computer systems and technical frameworks to ensure
those goals are met.

Activity in IS
Skills of IS Manager
Leadership
Negotiation tactics
Problem solving
Interpersonal communication
Written communication
Public speaking
Task delegation
Hardware and software installation
 Importance of information
system in decision making
• Information systems play a crucial role in decision-making across all levels of an
organization. They provide the necessary data, analysis tools, and communication capabilities
to support informed and effective decision-making processes. Here's an overview of the
importance of information systems in decision making:
1.Data Collection and Storage: Information systems gather and store vast amounts of data
from various sources, both internal and external. This data includes financial data, customer
information, sales figures, market trends, and more. Decision makers rely on this data as the
foundation for their choices.
2.Data Analysis and Reporting: Information systems include tools for data analysis and
reporting, allowing decision makers to transform raw data into actionable insights. Through
data analytics and visualization, decision makers can identify patterns, trends, and anomalies
that inform their decisions.
3.Real-time Information: Many modern information systems provide real-time or near-real-
time data, enabling decision makers to make timely and responsive choices. This is
particularly crucial in fast-paced industries or situations that require immediate action.
Contd.,
4. Scenario Analysis: Information systems can model different scenarios and their
potential outcomes. Decision makers can explore "what-if" scenarios to evaluate the
impact of various decisions before making a choice. This helps in risk assessment and
strategy planning.
5. Resource Allocation: Decision makers use information systems to allocate resources
effectively. By analyzing data on project performance, budgeting, and resource
availability, they can make informed decisions about where to invest time, money, and
manpower.
6. Strategic Decision Making: Information systems support strategic decision making
by providing insights into market conditions, competitor activities, and industry trends.
This information helps leaders formulate long-term strategies and adapt them as needed.
7. Operational Decision Making: At the operational level, information systems assist
in day-to-day decisions related to inventory management, production scheduling, supply
chain optimization, and more. These decisions impact the efficiency and profitability of
the organization.
8. Collaboration and Communication: Information systems facilitate collaboration
among decision makers, allowing them to share data, reports, and insights in a
centralized and accessible manner. This enhances teamwork and ensures that everyone
is working with the same information.
Contd.,
9. Compliance and Risk Management: Information systems help organizations comply
with regulations and manage risks effectively. By monitoring and reporting on
compliance-related data, decision makers can take actions to mitigate risks and ensure
legal adherence.
10.Performance Evaluation: Information systems provide Key Performance Indicators
(KPIs) and dashboards that enable decision makers to assess the performance of various
aspects of the organization. This feedback loop helps in adjusting strategies and tactics
as needed.
11.Customer Insights: Information systems collect and analyze customer data, allowing
organizations to make customer-centric decisions. This includes tailoring marketing
campaigns, improving customer service, and optimizing product offerings.
12. Innovation and Adaptation: In a rapidly changing business environment,
information systems support innovation and adaptation. Decision makers can track
emerging trends and technologies, enabling the organization to stay competitive and
relevant.
Importance of information system in
strategy building
Information systems play a critical role in strategy building for organizations in today's digital age. They provide the
necessary tools and capabilities to gather, process, analyze, and disseminate information, which is essential for making
informed strategic decisions. Here are some key ways in which information systems are important in strategy building:
1. Data Collection and Analysis:
1. Information systems collect vast amounts of data from various sources, both internal and external to the
organization. This data can include market trends, customer preferences, competitor information, and internal
performance metrics.
2. Advanced analytics and data mining tools within information systems enable organizations to analyze this data
to identify patterns, trends, and insights that can inform strategic decisions.
2. Real-time Information:
1. Information systems provide real-time or near-real-time access to critical information, allowing organizations
to respond quickly to changing market conditions and emerging opportunities or threats.
2. This real-time data helps in dynamic decision-making and ensures that strategies are aligned with current
realities.
3. Competitive Advantage:
1. Organizations that effectively leverage information systems can gain a competitive advantage by making more
informed and data-driven strategic decisions.
2. They can identify market gaps, optimize operations, and develop unique value propositions based on data-
driven insights.
Contd.,
4. Strategic Planning:
1. Information systems support strategic planning by providing tools for scenario analysis, forecasting, and modeling.
This allows organizations to evaluate various strategic options and their potential outcomes.
2. Strategic planning becomes more accurate and effective when based on data and analytics provided by information
systems.
5. Communication and Collaboration:
3. Information systems facilitate communication and collaboration within an organization. Teams can access and
share information easily, ensuring that all stakeholders are on the same page regarding the strategic direction.
4. Collaboration tools, like project management and document sharing systems, enhance teamwork and
coordination in executing strategic initiatives.
6. Resource Allocation:
5. Information systems help organizations allocate resources more efficiently by providing insights into which
projects or initiatives are delivering the best return on investment (ROI).
6. This data-driven approach ensures that resources are directed toward strategic priorities.
7. Risk Management:
7. Information systems allow organizations to assess and mitigate risks associated with their strategies. They can
model various scenarios to anticipate potential risks and develop contingency plans.
8. Real-time risk monitoring is also possible through information systems, enabling proactive risk management.
8. Performance Monitoring:
9. Information systems provide key performance indicators (KPIs) and dashboards that allow organizations to
monitor the progress of strategic initiatives.
10.Regular performance assessments help in adjusting strategies as needed to achieve desired goals.