Foundations of Information Systems in Business

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1 Foundations of Information Systems in Business O Brien Chapter One

2 Focus Questions Why bother to develop knowledge about IT & its management? How does MY work/life/goal relate to IT (mgt)?

3 Why study Information Systems and Information Technology? Vital component of successful businesses Helps businesses expand and compete Businesses use IS and IT To improve efficiency and effectiveness of business processes For managerial decision making For workgroup collaboration

4 Information System (IS) versus Information Technology (IT) IS -- all the components & resources necessary to deliver information & functions to the organization IT -- hardware, software, networking & data management In theory, IS could be paper-based We will focus on Computer-Based Information Systems (CBIS)

5 What does IS do for a business?

6 Business Applications expanding role over time

7 Thesis New economy or e-world IT has & is changing ways people work IT is primary strategic enabler Management of IT is responsibility of not only IT specialists, but also IT-knowledgeable business managers

8 Data versus Information: Data Lindsey Mann Naranjo 1200 Meleh yes Raw facts Observations Not processed (yet) Not meaningful to the audience/reader

9 Data versus Information Information Processed data Summarized Organized Labeled Meaningful to audience Monthly Sales Report for West Region Sales Rep: Charles Mann Emp No Item Qty Sold Price TM Shoes 1200 $100 For what???

10 Information versus Knowledge Knowledge Organized body of information which you comprehend & are familiar with its use can apply to real life situations based on which you make business decisions knowledge worker

11 What is an Information System? An organized combination of People Hardware Software Communications networks Data resources Policies and procedures That stores, retrieves, transforms & disseminates information in an organization

12 What is an Information System? Control of of System Performance Input of of Data Resources Processing Data Output of of Information Products Storage of of Data Resources

13 Environment Output 1 Interface Input 2 Interface Component 1 Component 2 Input 1 Component 3 Storage 1 Interface System Boundary

14 The Bigger Picture

15 Components of an IS 1. People Resources - End Users - IS Specialists 2. Hardware - Machines - Media 3. Software - Programs - Procedures 4. Data Resources - Data and Knowledge Bases 5. Network Resources - Communications Media and Networks

16 Cybernetic system All systems have input, processing & output A cybernetic system, self-monitoring, selfregulating system; adds feedback & control: Feedback is data about the performance of a system Control involves monitoring and evaluating feedback to determine whether a system is moving towards the achievement of its goal

17 A Cybernetic system

18 A business as a system

19 A business as a set of processes Many Processes Inputs Processes Outputs A business adds value

20 Functional Processes Customer Order Sales Accounting Purchasing Production Logistics Material Order

21 Business Application Software Accounting and Financial Management Customer Relationship Management Human Resource Management Business Decision Support Enterprise Resource Planning Supply Chain Management Enterprise Integrate

22 Information systems model

23 Recognizing IS As a business professional, you should be able to look at an IS and identify The people, hardware, software, data and network resources they use The type of information products they produce The way they perform input, processing, output, storage and control activities

24 Ethical challenges of IT applications

25 Ethical responsibilities What 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?

26 The Information Systems Development Process

27 E-business The use of Internet technologies to work and empower business processes, electronic commerce, and enterprise collaboration within a company and with its customers, suppliers, and other business stakeholders. Reengineer internal business processes

28 How e-business is being used

29 Operations Support Systems Transaction Processing Systems Record and process data from business transactions Examples: sales processing, inventory systems, accounting systems Process Control Systems Monitor and control physical processes Example: in a petroleum refinery use sensors to monitor chemical processes Enterprise Collaboration Systems Enhance team and work group communications Examples: , videoconferencing

30 Two ways to process transactions Batch Processing: Accumulate transactions over time and process periodically Example: a bank processes all checks received in a batch at night Online Processing: Process transactions immediately Example: a bank processes an ATM withdrawal immediately

31 Types of Management Support Systems Management Information Systems (MIS) Provide reports and displays to managers Example: daily sales analysis reports Decision Support Systems (DSS) Provide interactive ad hoc support for decision making Example: A what-if-analysis to determine where to spend advertising dollars Executive Information Systems (EIS) Provide critical information for executives and managers Example: easy access to actions of competitors

32 Operational or Management Systems Expert Systems Provide expert advice Example: credit application advisor Knowledge Management Systems Support creation, organization and dissemination of business knowledge throughout company Example: Intranet access to best business practices

33 Challenges and Opportunities of IT

34 IT Careers Outsourcing of basic programming to India, Middle-East and Asia-Pacific countries Strong employment opportunities in other areas in IS Shortage of qualified IS personnel Long-term job outlook positive & exciting

35 Career Opportunities in IS

36 Job growth Among fastest growing occupations through 2012 Systems Analyst, Database administrators, Other managerial-level positions Network specialists Information security

37 Software Project Survey Results Date Succeed Challenged Fail % 52.7% 31.1% % % 51% 15% Standish Group

38 Why Projects Succeed User involvement Exec management support unequivocal sponsorship Clear understanding & statement of requirements Effective planning Realistic expectations Standish Group survey of IT execs

39 Case 1: Continental Airlines This Call is Being Monitored CallMiner software installed: Records and transcribes conversations Captures keystrokes Used to craft marketing plans Improve quality of customer service Determine what training is needed

40 Case Study Questions 1. What are the business benefits of the CallMiner system? Provide additional examples beyond those in case. 2. How can new technologies like CallMiner help companies improve their customer service & gain a competitive edge in the marketplace? Explain. 3. Andre Harris refers to calls to reconfirm a flight as quite frankly, low-value calls. Why are they classified as low value? Why do you think so many customers are placing such calls?

41 Real World Internet Activity 1. Many organizations are using call monitoring and data mining to gain a greater understanding of their customers and their needs. Use the Internet to investigate: Who is using this technology? In what form? What is the real value of this technology?

42 Real World Group Activity 2. Is call monitoring an invasion of privacy? In small groups, discuss: Why do some customers feel their privacy is at stake? What do you believe could be done to mitigate privacy concerns while improving the value of the technology?

43 Case 2: Lufthansa Taking Mobile Computing to the Skies Lufthansa wants to Keep 3,500 pilots Trained on latest technology & procedures Plugged into corporate infrastructure Informed about schedules, weather events & other facts affecting their jobs Control costs Provide Internet access to passengers

44 Case Study Questions 1. Are many of Lufthansa s challenges identified in the case similar to those being experienced by other businesses in today s global economy? Explain & provide some examples. 2. What other tangible & intangible benefits, beyond those identified by Lufthansa, might a mobile workforce enjoy as a result of deploying mobile technologies? Explain. 3. Lufthansa was clearly taking a big risk with their decision to deploy notebook computers to their pilots. What steps did they take to manage that risk & what others might be needed in today s business environment? Provide some examples

45 Real world Internet activity 1. The Connexion system by Boeing is rapidly becoming standard for high-speed Internet access on commercial airliners. Go to the Connexion website at check out some of the features of the new system.

46 Real World Group Activity 2. European air carriers have embraced having Internet access on their aircraft far faster than U.S. carriers. In small groups discuss: Why does a lack of interest still exist in the United States? Would you or your friends prefer an airline with onboard Internet access? Would you pay more for this service? Why or why not?

47 Case 3: Aviall Inc. From Failure to Success with IT Supplier of airplane parts and components Had lost track of its inventory Price-tracking software didn t work with inventory control or purchasing forecasting Sent wrong parts to wrong customers Sales falling Needed a middleware vision: get all the software to work together

48 Case Study Questions 1. Why do you think Aviall failed in their implementation of an airplane parts & components inventory control system? 2. How has IT brought new business success to Aviall? How did IT change Aviall s business model? 3. How could other companies use Aviall s approach to using IT to improve their business success? Give several examples.

49 Real World Internet Activity 1. Go to the Aviall s website at & look through some of the case studies of business solutions Aviall provides to its customers. See if you can find evidence of successes directly related to the new system.

50 Real World Group Activity 2. Sometimes, big failures can become big successes when working with innovative applications of technology. In small groups, Discuss your thoughts as to why it seems a failure has to happen first. Is it because we don t hear about the successes unless they come from a failure? How can we learn from the failures in applying innovative technologies so that more successes can be realized?

1-1 McGraw-Hill/Irwin. Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

1-1 McGraw-Hill/Irwin. Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 1-1 McGraw-Hill/Irwin Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 1 hapter Foundations of Information Systems in Business Why should you study information systems? How does a