Chapter # 1

Foundations of Information
Systems in Business
 Definition
An Information System is an organized
combination of people, hardware,
software, communications networks,
and data resources that collects,
transforms, and disseminates
information in an organization.
 I.S. Perspectives
Data and Information

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.
 I.S. Perspectives
Data and Information
• Data: Streams of raw facts representing
events such as business transactions

• Information: Clusters of facts meaningful

and useful to human beings in the
processes such as making decisions
 I.S. Dimensions
Three Important Perspectives /Dimensions of
Information Systems

1. Organizations

2. Managers

3. Technology

You will need to understand and balance these

dimensions of information systems in order to create
business value.
 I.S. Dimensions
An Organizational Dimension /Perspective. Information
technology can provide the information a business needs
for efficient operations.
It can even be the foundation of a company's competitive
advantage.
But,
to function properly, an information system must be
developed in support of the strategic objectives, business
operations, and management needs of the enterprise.
 I.S. Dimensions
Important elements of Organizations to be discussed
for efficient Information Systems.

• People

• Organizational Structure

• Business processes

• Culture of the Organization

• Politics/ Employee Unions

 I.S. Perspectives
Management Dimension /Perspective.
Management is End user of IS and produced information as
well.
The end user means IS specialists including designers,
developers, and all information systems personnel
concerned with the management.
Information systems are powerful tools -- and all the more
powerful when made to fit the needs of those who use them
everyday.
 I.S. Perspectives
2. Management Dimension /Perspective of
Information Systems
Managers are:
• Senior managers
• Middle managers
• Operational managers
I.S. Perspectives

Technology Dimension /Perspective of

Information Systems
Information technology is one of the tools managers use to cope with
change:

• Hardware: Physical equipment

• Software: Detailed preprogrammed instructions

• Storage: Physical media for storing data and the software

I.S. Perspectives
The Technology Dimension of Information Systems
(Continued)
• Communications technology: Transfers data from one physical
location to another

• Networks: Links computers to share data or resources (Internet,

intranet, extranet)

Managers need to know enough about information technology to make

intelligent decisions about how to use it for creating business value.
 The Role of Information Systems in Business Today

The Interdependence Between Organizations and Information

Technology

There is a growing interdependence between a firm’s information systems and its business
capabilities. Changes in strategy, rules, and business processes increasingly require changes in
hardware, software, databases, and telecommunications. Often, what the organization would
like to do depends on what its systems will permit it to do.
Scope
WHY INFORMATION SYSTEMS ARE IMPORTANT ?

 That’s the same question as asking why anyone should study

Accounting, Finance, HR, Marketing etc.
 Information System and technologies including e-biz and e-
commerce technologies.
 This subject thus become vital for business management.
 IS resources perform input, processing, output, storage, and
control activities that transform data resources into information
products.
 Identify challenges and ethical issues that a business manager
might face.
An IS Framework for Business Professionals
An IS Framework for Business Professionals
Foundation Concepts
These are Fundamental behavioral, technical and
managerial concepts about the components of
I.S.

Example: Competitive strategy concept used to

develop e-business application of Information
Technology.
An IS Framework for Business Professionals
Business Application
The major uses of information systems for the
operations management and competitive
advantage of E-business, E-com Collaboration
and Decision making by using Internet, Intranet,
Databases etc.
An IS Framework for Business Professionals
Development Processes
How business professionals and information
specialists plan, develop and implement
information systems to meet e-business
opportunities by using strategic planning and
development approaches.
An IS Framework for Business Professionals
Management Challenges
These are the challenges faced by management
to manage e-business effectively and ethically.

E.g. Technology security at the end user, enterprise

and global levels of a business.
An IS Framework for Business Professionals
Information Technologies
Deals with major concepts of development and
management issues using INFORMATION
TECHNOLOGY that is, hardware, software,
networks, data resource management etc.
What is a System?
System. A system is a group of interrelated components
working together toward a common goal by accepting inputs
and producing outputs in an organized transformation process.
Systems have the following three basic interacting functions.
Input. Input involves capturing and assembling elements that
enter the system to be processed.
Processing. Processing involves the transformation of input
into output.
Output. Output is the end result of the transformation
process. Output involves transferring elements that have been
produced by a transformation process to their ultimate
destination.
What is a System?
Environment

Feedback Feedback
Signals Signals
Control Control by Control
Signals Management Signals

Input of Manufacturing Output of

Raw Materials Process Finished Products

System Boundary
Other Systems
Components of an Information System
People

Information
Systems
Resources
Components of an Information System
The information system model highlights the relationships among the components
and activities of information systems:
People Resources. People are required for operation of all ISs. People
resources include:
• End Users. As mentioned, these people use the IS or the information it
produces.
• IS Specialists. These people develop and operate the IS.

Hardware Resources. These include all the physical devices and materials used
in information processing, including all machines and data media. Key
components include:
• Computer Systems. These are the CPUs and their related peripherals,
such as terminals and networked PCs.
• Computer Peripherals. These are input and output devices like
keyboards, monitors, and secondary storage.
• Telecommunications Networks. These are the computer systems
interconnected by various telecommunications media such as modems.
Components of an Information System
The information system model highlights the relationships among the components
and activities of information systems:
Software Resources. These include all sets of information processing
instructions. Software resources include:
• System Software. This controls the computer.
• Application Software. These are for a specific end user task, such as word-
processing.
• Procedures. These are the operating instructions for the people who use
the IS.

Data Resources. Data is both the raw material of and among the most valuable
organizational resources in the IS. Data can be in alphanumeric, text, image
and/or audio form.

Data are typically organized into either Databases - which hold processed and
organized data; or Knowledge bases - which hold knowledge in a variety of
forms such as facts and rules of inference about a given subject.
Assignment # 01

Why Organizations
need Information
Systems?

25