CHAPTER I

Introduction to Information
Systems in Organizations
Learning Objectives
Identify the basic types of business
information systems and discuss who
uses them, how they are used, and what
kinds of benefits they deliver.
Identify key issues and challenges that
must be overcome to be successful in the
global market.
Identify the significant benefits as well as
problems and issues associated with
information systems.
Define the term value chain and describe
the role that information systems play in
an organization supply chain.
Define the term “competitive advantage”
and identify the factors that lead firms to
seek competitive advantage.
Describe three methods for assessing
the financial attractiveness of an
information system project.
Define the types of roles, functions and
careers available in the field of
information systems.
What is Information Systems?
-Is a set of interrelated components
that collect, manipulate, store, and
disseminate data and information and
provide a feedback mechanism to
meet an objective.
http://www.manilachannel.com/blog/5-inspiring-rags-to-riches-
filipino-business-stories/
https://www.lazada.com.ph/

In your own views, how does this to big retailing

company apply Information Systems in their
business operation?
List down at least five advantage and
dis-advantage of each company.

Why learn about Information Systems

in Organizations?

Who do you think the user of an

Information System?
Information System used by:
• Sales Representatives
• Managers
• Financial Advisors
• Teachers
• Janitor
• Bankers
and the like
Why do you think the following
professions and the like are indeed of
Information Systems in doing their
job?
-Information System is an
indispensable tools that help them
to achieve their career goals.
How does information system help
businesses in their day to day
operations?

-Information systems helps

business to increase their revenues
and reduce cost.
 Information is one of the most valuable
asset of an business organization.

What is the difference of Data and

Information?
Data – is a raw facts.
Information – is a collection of facts
organized and processed so that it has
additional value beyond the value of
individual facts.
 The Data, Information, Process and
Knowledge
Data – is a Raw facts
Information - is a collection of facts organized
and processed so that it has additional value
beyond the value of individual facts.
Process – Set of logical related task.
Knowledge – Awareness and understanding
of a set of information.
The Data, Information, Process and
Knowledge (Continued)

Data are represented real-world things.

The Data, Information, Process and
Knowledge (Continued)
 Characteristics of Valuable
Information
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.
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.
2011 2018

Facebook.com
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.

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.
 Components of an Information

Input - The activity of gathering and capturing

raw data.
Process – Converting or transforming data into
useful outputs.
Output – Production of useful information, usually in
the form of documents and reports.

Feedback – Information from the system that is used

to make changes to input or processing activities.

Differentiate the difference of Manual between

Computerized Information Systems.

Note: An information system can be manual or

computerized.
Example:
-Investment analysts manually draw charts and trend
lines to assist them in making investment decisions.
Computerized Information Systems
Follow stock indexes and markets and suggest
when large blocks of stocks should be purchased
or sold.
 Computer-Based Information
Systems
CBIS – Is a single set of hardware,
software, databases, telecommunications,
people, and procedures, that are
configured to collect, manipulate, store,
and process data into information.

-Give an example of CBIS-

Components Computer-Based
Information Systems
 Computer Based Information Systems
CBIS – A single set of hardware, software,
database, telecommunications, people, and
procedures that are configured to collect,
manipulate, store, and process data into
information.
Hardware – Computer equipment used to
perform input, processing, storage and output
activities.
Software – The Computer programs that
govern the operation of the computer.
Telecommunications – The electronic
transmission of signals for communications that
enables organizations to carry out their
processes and tasks through effective computer
networks.
People – The one who operate the CBIS
Procedures – The strategies, policies, methods,
and rules for using CBIS.

Give at least 2 example of CBIS.

 Business Information Systems
BIS – are often integrated into one product and
can be delivered by the same software package.

• TPS - Transaction Processing Systems

• MIS – Management Information Systems
• DSS – Decision Support Systems
Electronic Commerce – Any Business
transaction executed electronically between
companies (B2B) companies and consumers
(B2C), (C2C) and the public sector.

Give an example of E-commerce.

M-Commerce – The use of mobile, wireless

devices to place orders and conduct business.
Electronic Business – Using information
systems and the internet to perform all business
related task and functions.
Systems development

- is the activity of creating or

modifying information
systems.
ORGANIZATIONS AND INFORMATION
SYSTEMS
Organization
- A formal collection of people and other
resources established to accomplish a set of goals.

Value Chain
- A series (chain) of activities that an organization
performs to transform inputs into outputs in such a
way that the value of the input is increased.
 Perspectives on Information Systems
Levels in a Firm
• Business organizations are
hierarchies consisting of
three principal levels:
senior management,
middle management, and
operational management.
Information systems serve
each of these levels.
Scientists and knowledge
workers often work with
middle management.
Competitive Advantage
- A significant and ideally long-term benefit to a
company over its competition.

Many companies consider their IS

staff a key competitive weapon
against other companies in the
marketplace, especially if they have
employees with training in the
development and use of mobile
devices, Internet applications, social
networks, and collaborative tools.
FINANCIAL EVALUATION OF INFORMATION SYSTEM
PROJECTS
Most organizations have an entire portfolio of potential
projects including information system projects from which to
choose. To determine if a specific information system project
is even worth pursuing, organizations perform a financial
analysis.

Cash flow Payback Period

Takes into account all
the increases and
decreases in cash
flow
associated with the
project.
is the number of years
required to recover the initial
cost of an investment. The
shorter the payback period,
the more attractive is the
project. A payback period of
three years or less is usually
considered good.
GLOBAL CHALLENGES IN INFORMATION SYSTEMS
What do Amazon, Coca-Cola, Facebook, Google, Hewlett
Packard, IBM, Pepsi, Cola, Procter & Gamble, and Unilever
along with dozens of other large companies all have in
common?

They are looking at how and from where they

are going to attract their next billion customers.

Those billion new customers are not going to

come from the Western or developed markets.
They will come from emerging markets and will be much
different from the first billion in terms of culture,
education, income, language, and life style.
INFORMATION SYSTEMS IN BUSINESS AND SOCIETY
Information systems have been developed that bring
significant benefits to business and society in terms
of:
 increased profits
 improved goods and services
 an improved quality of life

Indeed information systems have become such an ingrained

part of our life that it is difficult to imagine our life without
them.
However, along with these many positive
aspects, there are also problems and issues
including:

 computer waste and mistakes

 computer crime
 work environment issues
 a host of ethical issues
CAREERS IN INFORMATION SYSTEMS