 Information System- is a set of interrelated
components that collect, manipulate, store data
and disseminate information and provide a
feedback mechanism to monitor performance.
-An organized combination of people,
hardware, software, communications networks,
and data resources that collects data,
transforms it and disseminates information.
 The value of Information is directly linked to
how it helps decision-makers achieve their
organization’s goals.
 System - is a set of elements or components
that interact to accomplish goals.
Popular types of information systems in an
organization:
1. Transaction Processing System (TPS).
Transaction processing is essential to helping
businesses perform daily operations.
Transactions are defined as any activity or event
that affects the company and include things like
deposits, withdrawals, shipping, billing
customers, order entry, and placing orders.
2. Office Automation System (OAS). OAS consists
of computers, communication-related
technology, and the personnel assigned to
perform the official tasks. The OAS covers office
transactions and supports official activity at
every level in the organization. The official
activities are subdivided into managerial and
clerical activities. Example: Email, voicemail,
and word processing.
3. Knowledge Work System (KWS). The KWS is a
specialized system that expedites knowledge
creation and ensures that the business's
technical skills and knowledge are correctly
applied. The Knowledge Work System aids
workers in creating and disseminating new
information using graphics, communication, and
document management tools.
a. Example: Computer-Aided Design
Systems (CAD), Financial Workstations,
Virtual Reality Systems.
4. Management Information System (MIS).
Management Information Systems are specially
designed to help middle managers and
supervisors make decisions, plan, and control
the workflow. The MIS pulls transactional data
from various Transactional Processing Systems,
compiles the information, and presents it in
reports and displays. Example: Additionally,
these reports can be produced monthly,
quarterly, or annually, although MIS can have
more immediate reports (e.g., hourly, daily).
5. Decision Support System (DSS). The DSS is a
management-level, interactive computer-based
information system that helps managers to
make decisions. The Decision Support System
specifically gives middle managers the
information necessary to make informed,
intelligent decisions. Decision Support Systems
use different decision models to analyze or
summarize large pieces of data into an easy-to-
use form that makes it easier for managers to
compare and analyze information. Often, these
summaries come in the form of charts and
tables.
6. Executive Support System (ESS). The ESS is like
the MIS but for executive-level decision-making.
The decisions involve company-wide matters, so
the stakes are higher. Consequently, they
demand more insight and judgment. The ESS
provides greater telecommunication, better
computing capabilities, and more efficient
display options than the DSS. In addition,
executive support systems help monitor
performances, track competitors, spot
opportunities, and forecast future trends.
Information System Activities
 Input of Data Resources
 Process Data into Information
 Output of Information
Information Technology Jobs
 Chief Information Officer - Highest-ranking IS
manager; is responsible for all strategic
planning in the organization
 IS Director Manages - all systems throughout
the organization and the day-to-day operations
of the entire IS Organization
 Information Center Manager - Manages IS
services such as help desks, hotlines, training,
and consulting
 Applications Development Manager -
Coordinates and manages new systems
development projects
  Project Manager - Manages a particular new
systems development project
 Systems Manager - Manages a particular
The Changing Role of the Information Systems
existing system
Department
 Operations Manager - Supervises the day-to-
day operations of the data and/or computer
center
 Programming Manager - Coordinates all
applications programming efforts
 Systems Analyst - Interfaces between users and
programmers; determines information
requirements and technical specifications for
new applications
 Business Analyst - Focuses on designing
solutions for business problems; interfaces
closely with users to demonstrate how IT can be
used innovatively
 Systems Programmer - Creates the computer
code for developing new systems software or
maintaining existing systems software
 Applications Programmer - Creates the
computer code for developing new applications
or maintaining existing applications
 Emerging Technologies - Manager Forecasts
technology trends; evaluate and experiments
with new technologies
 Network Manager - Coordinates and manages
the organization’s voice and data networks
 Database Administrator - Manages the
organization’s databases and oversees the use
of database management software
 Auditing or Computer Security Manager -
Oversees the ethical and legal use of
information systems
 Webmaster - Manages the organization’s World
Wide Web site
 Web Designer - Creates World Wide Web sites
and pages
Importance of M.I.S.
Managing information systems in modern organizations
is a difficult, complex task. Several factors contribute to
this complexity:
 information systems have enormous strategic
value to organizations
 information systems are very expensive to
acquire, operate, and maintain
 the evolution of the management information
systems (MIS) function within the organization
 Traditional Functions of the MIS Department:
1. Managing systems development and systems
project management. As an end-user, you will
have critical input into the systems
development process.
2. Managing computer operations, including the
computer center
3. Staffing, training, and developing IS skills
4. Providing technical services
5. Infrastructure planning, development, and
control. As an end-user, you will provide critical
input about the IS infrastructure needs of your
department.
 New (Consultative) Functions of the MIS
Department:
1. Initiating and designing specific strategic
information systems. As an end-user, your
information needs will often mandate the
development of new strategic information
systems. You will decide which strategic
systems you need (because you know your
business needs better than the MIS department
does), and you will provide input into
developing these systems.
2. Incorporating the Internet and electronic
commerce into the business. As an end-user,
you will be primarily responsible for effectively
using the Internet and electronic commerce in
your business. You will work with the MIS
department to accomplish this task.
3. Managing system integration including the
Internet, intranets, and extranets. As an end-
user, your business needs will determine how
you want to use the Internet, your corporate
intranets, and extranets to accomplish your
goals. You will be primarily responsible for
advising the MIS department on the most
effective use of the Internet, your corporate
intranets, and extranets.
4. Educating the non-MIS managers about IT.
Your department will be primarily responsible
for advising the MIS department on how best to
educate and train your employees about IT.
 5. Educating the MIS staff about the business.
Communication between the MIS department
and the business units is a two-way street. You
will be responsible for educating the MIS staff
on your business, its needs, and its goals.
6. Partnering with business-unit executives.
Essentially, you will be in a partnership with the
MIS department. You will be responsible for
seeing that this partnership is one “between
equals” and ensuring its success.
7. Managing to outsource. Outsourcing is driven
by business needs. Therefore, the outsourcing
decision resides largely with the business units
(i.e., with you). The MIS department, working
closely with you, will advise you on technical
issues such as communications bandwidth,
security, etc.
8. Proactively using business and technical
knowledge to seed innovative ideas about IT.
Your business needs often will drive innovative
ideas about how to effectively use information
systems to accomplish your goals. The best way
to bring these innovative uses of IS to life is to
partner closely with your MIS department. Such
close partnerships have amazing synergies!
9. Creating business alliances with business
partners. The needs of your business unit will
drive these alliances, typically along your supply
chain. Again, your MIS department will act as
your advisor on various issues, including
hardware and software compatibility,
implementing extranets, communications, and
security.
Components of IS
 Hardware - consists of the computer equipment
used to perform input, processing, storage, and
output activities.
- consists of the computer equipment used
to perform input, processing, storage, and
output activities.
- Input devices include keyboards, mice and
other pointing devices, automatic scanning
devices, and equipment that can read
magnetic ink characters.
- Processing devices include computer chips
that contain the central processing unit and
main. In information systems, the
processing means converting or
transforming data into useful outputs.
Processing can involve making calculations,
comparing data and taking alternative
actions, and storing data for future use.
Processing data into useful information is
critical in business settings. The trend in the
computer industry is to produce smaller,
faster, and more mobile hardware, such as
tablet computers
- Storage involves keeping data and
information available for future use,
including output, discussed next
- In information systems, output involves
producing useful information, usually in the
form of documents and reports. Outputs
can include paychecks for employees,
reports for managers, and information
supplied to stockholders, banks,
government agencies, and other groups. In
some cases, output from one system can
become input for another. For example,
output from a system that processes sales
orders can be used as input to a customer
billing system
 Software - the computer programs that govern
the operation of the computer.
- there are two primary types of software.
System software, such as Microsoft
Windows, coordinates basic computer
operations such as start-up, controls access
to system resources, and manages
computer memory and files.
- Application software, such as Microsoft
Excel, allows you to accomplish specific
tasks including editing text documents,
creating graphs, and playing games. Both
system software and application software
are needed for all types of computers, from
small handheld computers to large
supercomputers
 Networks - Computers and equipment are
connected in a building, around the country, or
around the world to enable electronic
communications.
- Internet: The world’s largest computer
network, consisting of thousands of
interconnected networks, all freely exchanging
information. Intranet: An internal network
based on Web technologies that allow people
 within an organization to exchange information
and work on projects.
- Extranet: A network based on Web
technologies that allow selected outsiders, such
as business partners and customers, to access
authorized resources of a company’s intranet.
- Cloud computing: A computing environment in
which software and data storage is provided by
the Internet (“the cloud”); the services are run
on another organization’s computer hardware
and both software and data are easily accessed.
- World Wide Web (WWW or Web): A network
of links on the Internet to documents
containing text, video, and sound.
 Personnel/ People: People are the most
important element in computer-based
information systems. Good systems can enable
ordinary people to produce extraordinary
results. They can also boost job satisfaction and
worker productivity. Information systems
personnel include all the people who manage,
run, program, and maintain the system,
including the chief information officer (CIO),
who manages the IS department.
Types of Organizational Information Systems
 Functional area IS - Supports the activities
within a specific functional area. E.g. System for
processing payroll
 Transaction processing system - Processes
transaction data from business events. E.g.
Walmart checkout point-of-sale terminal
 Enterprise resource planning - Integrates all
functional areas of the organization. E.g. Oracle,
SAP system
 Office automation system - Supports daily work
activities of individuals and groups. E.g.
Microsoft® Office
 Management information system - Produces
reports summarized from transaction data,
usually in one functional area. E.g. Report on
total sales for each customer
 Decision support system - Provides access to
data and analysis tools. E.g. “What-if” analysis
of changes in budget
 Expert system - Mimics human experts in a
particular area and makes decisions. E.g. Credit
card approval analysis
 Executive dashboard - Presents structured,
summarized information about aspects of
business important to executives. E.g. Status of
sales by product
 Supply chain management system - Manages
flows of products, services, and information
among organizations. E.g. Walmart Retail Link
system connecting suppliers to Walmart
 Electronic commerce system - Enables
transactions among organizations and between
organizations and customers
Characteristics of Valuable Information
The value of information is directly linked to how it
helps decision-makers achieve their organization’s
goals. Valuable information can help people in their
organizations perform tasks more efficiently and
effectively.
 Accessible - Information should be easily
accessible by authorized users so they can
obtain it in the right format and at the right
time to meet their needs.
 Accurate - Accurate information is error-free. In
some cases, inaccurate information is
generated because inaccurate data is fed into
the transformation process. This is commonly
called garbage in, garbage out (GIGO).
 Complete - Complete information contains all
the important facts. For example, an
investment report that does not include all
important costs is not complete.
 Economical - Information should also be
relatively economical to produce. Decision-
makers must always balance the value of
information with the cost of producing it.
 Flexible - Flexible information can be used for a
variety of purposes. For example, information
on how much inventory is on hand for a
particular part can be used by a sales
representative in closing a sale, by a production
manager to determine whether more inventory
is needed, and by a financial executive to
determine the total value the company has
invested in inventory.
 Relevant - Relevant information is important to
the decision-maker. Information showing that
lumber prices might drop might not be relevant
to a computer chip manufacturer.
  Reliable - Reliable information can be trusted
by users. In many cases, the reliability of the
information depends on the reliability of the
data collection method. In other instances,
reliability depends on the source of the
information. A rumor from an unknown source
that oil prices might go up might not be reliable.
 Secure - Information should be secure from
access by unauthorized users.
 Simple - Information should be simple, not
complex. Sophisticated and detailed
information might not be needed. In fact, too
much information can cause information
overload, whereby a decision-maker has too
much information and is unable to determine
what is really important.
 Timely - Timely information is delivered when it
is needed. Knowing last week’s weather
conditions will not help when trying to decide
what coat to wear today.
 Verifiable - Information should be verifiable.
This means that you can check it to make sure it
is correct, perhaps by checking many sources
for the same information.
Overview of database and its characteristics
 A database is a well-designed, organized, and
carefully managed collection of data. Like other
components of an information system, a
database should help an organization achieve
its goals.
 A database can contribute to organizational
success by providing managers and decision-
makers with timely, accurate, and relevant
information built on data.
 Databases also help companies analyze
information to reduce costs, increase profits,
add new customers, track past business
activities, and open new market opportunities
Database management system (DBMS): A group of
programs that manipulate the database and provide an
interface between the database and the user of the
database and other application programs. Databases
and database management systems are becoming even
more important to organizations as they deal with
rapidly increasing amounts of information.
Because today’s businesses must keep track of and
analyze so much data, they must keep the data well
organized so that it can be used effectively. A database
should be:
 Designed to store all data relevant to the
business
 Provide quick access and easy modification
 Reflect on the business processes of the
organization.
When building a database, an organization must
carefully consider these questions:
 What data should be collected and at what
cost?
 What data should be provided to which users
and when?
 Logical structure. How should data be arranged
so that it makes sense to a given user?
 Physical organization. Where should data be
physically located?
B.I. Concepts and technologies
Different levels of decision making in an organization
rely on different mixes of structured and unstructured
information:
 Operational Level. Employees working primarily
at the operational level make countless
decisions as they deal directly with customers
and handle all the routine transactions. Many
decisions follow predetermined policies and
procedures that spell out how to handle
different situations
 Tactical Level. People at tactical levels draw on
business intelligence to make mid-level
decisions, the kind that may guide individual
business units. Decisions about marketing plans,
product development, membership drives,
departmental budgets, and other initiatives are
generally tactical.
 Strategic Level. The leadership guides a longer-
term strategy. Decisions at this level can have
widespread effects throughout the organization
and beyond, to suppliers, customers, and even
the whole industry. Each decision could commit
huge amounts of capital and people to major
initiatives. For instance, hospital administrator
Bora may need to decide whether to open a
 new pediatrics wing or use those resources to
enlarge sports medicine.
Business intelligence encompasses a vast array of
information sources that can contribute to better
decision-making, along with the software applications,
technologies, and practices used to analyze it. Levels of
decision-making that draw on different types of
information sources include operational, tactical, and
strategic.
Sources of Business Intelligence:
 Transactional Databases, Data Warehouses, and
Internal Data Sources
 External Data Sources and Big Data
Data Mining and Analytics: Several approaches to data
mining and analytics help managers analyze patterns,
trends, and relationships, and make better data-driven
decisions. Predictive analytics refers to data mining
approaches and statistical techniques used to predict
future behavior, especially to unlock the value of
business intelligence for strategy. For instance which
customers are most likely to renew their subscription to
our service at the regular price? What special offers
might persuade different customers to renew? What
behaviors signal that a customer is about to cancel?
Involves:
 Analyzing Patterns, Trends, and Relationships
e.g. predictive analytics, using Excel
 Simulating, Optimizing, and Forecasting e.g. text
mining, market basket analysis
 Artificial intelligence
Web Analytics. Several measures of visitor traffic are
important to all organizations. All the measures refer to
a particular time period the analyst selects, such as the
previous week, month, or year.
 These web metrics come from server logs, and
each entry contains detailed information about
the date and time, the page, the source, and
any clicks on the page itself. The logs also
contain information about each user, including
his or her IP address and browser. If the site
uses cookies, it can collect more information
about each user.
Dashboard. Like a plane or car dashboard with its dials,
gauges, and other displays of real-time data, the IT
dashboard is a graphical user interface that helps
people visualize information vital to the user’s role and
the decisions that the user makes.
Portal. A gateway that provides access to a variety of
relevant information from many different sources on
one screen; for an enterprise, the portal provides a
secure gateway to resources needed by employees,
customers, and suppliers.
Mashup. An approach to aggregating content from
multiple internal and external sources on customizable
web pages that relies on Web 2.0 technologies.
Internet
The Internet (“the Net”) is a global WAN that connects
approximately 1 million organizational computer
networks in more than 200 countries on all continents,
including Antarctica. It has become so widespread that
it features in the daily routine of almost 2 billion people.
Participating computer systems include smartphones,
PCs, LANs, databases, and mainframes.
Telecommunications and Network
Intranet - Today, Internet technologies are being used
both within and among organizations. An intranet is a
network that uses Internet protocols so that users can
take advantage of familiar applications and work habits.
Intranets support discovery (easy and inexpensive
browsing and search), communication, and
collaboration inside an organization. For the numerous
uses of intranets.
Extranets - An extranet connects parts of the intranets
of different organizations. In addition, it enables
business partners to communicate securely over the
Internet using virtual private networks. Extranets offer
limited accessibility to the intranets of participating
companies, as well as necessary inter-organizational
communications. They are widely used in the areas of
business-to-business (B2B) electronic commerce and
supply chain management.
E-government - The use of information and
communications technology to simplify the sharing of
information, speed formerly paper-based processes,
and improve the relationship between citizens and
government. Government-to-citizen (G2C),
government-to-business (G2B), and government-to-
government (G2G) are all forms of e-government, each
with different applications:
Electronic commerce (e-commerce): Conducting
business activities (e.g., distribution, buying, selling,
marketing, and servicing of products or services)
electronically over computer networks
Business-to-business (B2B) e-commerce: A subset of e-
commerce in which all the participants are
organizations.
Business-to-consumer (B2C) e-commerce: A form of e-
commerce in which customers deal directly with an
organization and avoid intermediaries.
Consumer-to-consumer (C2C) e-commerce: A subset of
e-commerce that involves electronic transactions
between consumers using a third party to facilitate the
process
Web 2.0. - Web 2.0 is a popular term that has proved
difficult to define. According to Tim O’Reilly, a noted
blogger, Web 2.0 is a loose collection of information
technologies and applications, plus the Web sites that
use them. These Web sites enrich the user experience
by encouraging user participation, social interaction,
and collaboration.
 Unlike Web 1.0 sites, Web 2.0 sites are not so
many online places to visit as Web locations
that Facilitate information sharing, user-
centered design, and collaboration.
 Web 2.0 sites often harness collective
intelligence (e.g., wikis); deliver functionality as
services, rather than packaged software (e.g.,
Web services); and feature remixable
applications and data (e.g., mashups).
New forms of collaborations
Crowdsourcing and Collective Intelligence. The term
crowdsourcing describes how tasks can be delegated to
large diffuse groups or communities who often
volunteer their contributions. Unlike outsourcing, in
which an organization contracts with a vendor to do
work, crowdsourcing depends on engaging people in
tasks they find interesting or rewarding, or collecting
data about what people are doing anyway as they go
about their daily work.2
Expanding Data and Sensory Input: The “Internet of
Things. Metropolitan areas offer smartphone bus and
train schedule apps that predict the placement of your
desired means of transportation every few seconds. You
can even watch the bus and train icon move down the
map on your phone. With this technology, you’ll know
just when your ride will arrive.
The Learning Web. The massive and ever-growing
mounds of data are valuable not just in their own right,
as revenue sources for companies or as features to
attract more users. They also provide resources for
machine learning, making the web and its applications
ever smarter. One example shows how Google created
a software program to translate texts from Arabic to
English and back and then pushed it to learn on its own.
Drawing on an enormous volume of already-translated
texts and documents on the web, Google developed a
text translator that acquires its skills directly from the
data.
Electronic and Mobile commerce
E-commerce refers to the buying and selling of goods
and services over the Internet or other networks,
encompassing financial transactions between
businesses, consumers, governments, or nonprofits.
Canny marketing promotions increased consumer
confidence in online payments, and even paralyzing
snowstorms help steer shoppers to the Internet.
Mobile commerce (m-commerce) refers to the use of
wireless, mobile devices to conduct e-commerce. M-
commerce has been going on for quite some time, as
customers use their wireless devices to connect to the
Internet for banking, shopping, and bill paying. They use
credit cards, debit cards, electronic checks, or services
like PayPal. Another type of m-commerce gaining speed
is the use of mobile devices as digital “wallets” that
actually pay bills on the spot, eliminating the need to
carry cash.