An Introduction To Information Systems: Ralph M. Stair - George W. Reynolds

Ralph M. Stair | George W.
Reynolds
Chapter 1
An Introduction to Information
Systems
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Principles and Learning Objectives:
Organizational Goals
• The value of information is directly

linked to how it helps decision makers
achieve the organization’s goals
– Discuss why it is important to study and
understand information systems
– Distinguish data from information and
describe the characteristics used to evaluate
the value of data
2
Efficiency
• Computers and information systems help

make it possible for organizations to
improve the way they conduct business
– Name the components of an information
system and describe several system
characteristics
3
Potential Impact
• Knowing the potential impact of

information systems and having the ability
to put this knowledge to work can result in
a successful personal career and in
organizations that reach their goals
– List the components of a computer-based
information system
4
Working Knowledge
• Knowing the potential impact of

information systems and having the ability
to put this knowledge to work can result in
a successful personal career and in
organizations that reach their goals
– Identify the basic types of business
information systems and discuss who uses
them, how they are used, and what kinds of
benefits they deliver
5
Building a Successful System
• System users, business managers, and

information systems professionals must
work together to build a successful
information system
– Identify the major steps of the systems
development process and state the goal of
each
6
Realizing the Benefits
• Information systems must be applied

thoughtfully and carefully so that society,
businesses, and industries can reap their
enormous benefits
– Describe some of the threats that information
systems and the Internet can pose to security
and privacy
– Discuss the expanding role and benefits of
information systems in business and industry
7
Introduction
• Information system (IS): a set of

interrelated components that collect,
manipulate, and disseminate data and
information and provide feedback to meet
an objective
• Information system feedback can help
organizations:
– Achieve their goals
– Increase revenues and reduce costs
8
Data, Information, and Knowledge
• Data: raw facts

• Information: collection of facts organized in
such a way that they have value beyond
the facts themselves
• Process: set of logically related tasks
performed to achieve a defined outcome
9
Data, Information, and Knowledge
(cont’d.)
• Knowledge: awareness and understanding

of a set of information and the ways it can
be made useful to support a task
10
Table 1.1 Types of Data
Data Represented By
Alphanumeric data Numbers, letters, and other
characters
Audio data Sounds, noises, or tones
Image data Graphic images and pictures
Video data Moving images or pictures
11
Table 1.2 Characteristics of Quality
Information
Characteristics Definitions
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.
12
Table 1.2 Characteristics of Quality
Information (cont’d.)
Characteristics Definitions
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.
13
System Concepts
• System: set of elements or components

that interact to accomplish goals
• Components of a system
– Inputs
– Processing mechanisms
– Outputs
– Feedback
14
Ralph M. Stair | George W. Reynolds
What is an Information System?
• An information system (IS) is a set of

interrelated elements that:
– Collect (input)
– Manipulate (process)
– Store
– Disseminate (output) data and information
– Provide a corrective reaction (feedback
mechanism) to meet an objective
16
Input, Processing, Output, Feedback
• Input: activity of gathering and capturing raw

data
• Processing: converting data into useful
outputs
• Output: production of useful information
– Usually in the form of documents and reports
• Feedback: information from the system
– Used to make changes to input or processing
activities
17
Computer-Based Information Systems
(CBIS)
• Single set of hardware, software,

databases, telecommunications, people,
and procedures
– Configured to collect, manipulate, store, and
process data into information
• Increasingly, companies are incorporating
CBIS into their products and services
– Example: investment tools for clients of
Fidelity Investments
18
CBIS: Hardware, Software, and
Databases
• Hardware: computer equipment used to

perform input, processing, storage, and
output activities
• Software: computer programs that govern
the operation of the computer
• Database: organized collection of facts and
information
– Typically consists of two or more related data
files
19
Business Information Systems
• Most common types of information

systems:
– electronic and mobile commerce,
– transaction processing,
– management information,
– decision support
20
Electronic and Mobile Commerce
• E-commerce: business transactions

executed electronically
– Business-to-business (B2B)
– Business-to-consumer (B2C)
– Consumer-to-consumer (C2C)
– Between business and the public sector
– Between consumers and the public sector
21
Mobile Commerce and
E-Procurement
• Mobile commerce (m-commerce): the use

of mobile, wireless devices to place orders
and conduct business
• E-procurement: use of information
systems and the Internet to acquire parts
and supplies
22
Electronic Commerce and Electronic
Business
Assignment!!
• E-commerce offers many advantages for
streamlining work activities
• E- business uses information systems and
the Internet to perform all business-related
tasks and functions.
23
Enterprise Systems: Transaction
Processing Systems
• Transaction
– Any business-related exchange, such as
payments to employees and sales to
customers
• Transaction processing system (TPS)
– An organized collection of people,
procedures, software, databases, and devices
– Used to perform and record completed
business transactions
24
Information and Decision Support
Systems
• Management information system (MIS)

– Organized collection of people, procedures,
software, databases, and devices
– Provides routine information to managers and
decision makers
– Focuses on operational efficiency
– Provides standard reports generated with
data and information from the TPS or ERP
25
Decision Support System (DSS)
• An organized collection of people,

procedures, software, databases, and
devices that support problem-specific
decision making
– Focus is on making effective decisions
– Used when problem is complex and
information needed to determine appropriate
action is difficult to obtain
26
Specialized Business Information
Systems: Knowledge Management
• Knowledge management systems (KMSs)

– Create, store, share, and use the
organization’s knowledge and experience
27
Specialized Business Information
Systems: Artificial Intelligence (AI)
• A computer system takes on

characteristics of human intelligence
• Examples of AI applications: games,
medical diagnoses, and automobile
operation
28
Artificial Intelligence Subfields
• Robotics: machines take over complex,

dangerous, routine or boring tasks
• Vision systems allow devices to see, store
and process images
• Natural language processing involves
computers understanding and acting on
verbal or written commands
29
Expert Systems and Virtual Reality
• Expert systems give computers the ability

to make suggestions and function like an
expert in a particular field
– Knowledge base contains data, rules,
procedures, and relationships used by expert
system
• Virtual reality: simulation of a real or
imagined environment that can be
experienced visually in three dimensions
30
Systems Development
• The activity of creating or modifying

existing business systems
• Future projects in systems development
– Applying analytics to large amounts of data
– Leveraging advantages of cloud computing
– Creating more mobile applications
• Companies may outsource some or all of
a systems development project
31
Systems Development: Investigation,
Analysis, and Design
• Systems investigation: gain clear

understanding of the specifics of the
problem to be solved or the opportunity to
be addressed
• Systems analysis
– Study the existing system to uncover its
strengths and weaknesses
– Identify what the new system must do to meet
the needs of the users and the organization
32
System Design
• Determine how the new system must work

• Identify what inputs are required
• Ascertain what outputs must be produced
33
Systems Development: Construction
• Convert the system design into an

operational information system
– Acquire and install hardware and software
– Code and test software programs
– Create and load data into databases
– Perform initial program testing
34
Systems Development: Operation,
Maintenance, and Disposition
• Operation and maintenance: identify and

make necessary changes to the system
• Disposition: activities at the end of the
useful life of the system
– Extract data from the system’s database
– Convert data to new format for the
replacement system
35
Security, Privacy, and Ethical Issues
• Edward Snowden case raised questions

regarding justified invasion of privacy
• Ethical issues concern what is generally
considered right or wrong
• Protective measures
– Laws: The Privacy Act
– Firewalls
– Identification numbers and passwords
36
Information Systems in Business
• Examples of functional areas of business

organizations which employ information
systems
– Finance and accounting
– Sales and marketing
– Manufacturing
– Human resource management
– Legal information systems
37
Global Challenges in Information Systems
• Cultural and language challenges

• Time and distance challenges
• Infrastructure challenges
• Currency challenges
• Product and service challenges
38
Summary – Principle 1
• Data: raw facts

• System: set of elements that interact to
accomplish a goal
• Components of an information system
– Input, processing, output, and feedback
39
• Components of a computer-based
information system (CBIS)
– Hardware, software, databases,
telecommunications and the Internet, people,
and procedures
• E-commerce: any business transaction
executed electronically between parties
40
• Transaction processing system (TPS)

– Handles the large volume of business
transactions that occur daily within an
organization
• Decision support system (DSS)
that help make problem-specific decisions
41

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Ralph M. Stair | George W.

• The value of information is directly

• Computers and information systems help

• Knowing the potential impact of

• Knowing the potential impact of

• System users, business managers, and

• Information systems must be applied

• Information system (IS): a set of

• Data: raw facts

• Knowledge: awareness and understanding

• System: set of elements or components

• An information system (IS) is a set of

• Input: activity of gathering and capturing raw

• Single set of hardware, software,

• Hardware: computer equipment used to

• Most common types of information

• E-commerce: business transactions

• Mobile commerce (m-commerce): the use

• Management information system (MIS)

• An organized collection of people,

• Knowledge management systems (KMSs)

• A computer system takes on

• Robotics: machines take over complex,

• Expert systems give computers the ability

• The activity of creating or modifying

• Systems investigation: gain clear

• Determine how the new system must work

• Convert the system design into an

• Operation and maintenance: identify and

• Edward Snowden case raised questions

• Examples of functional areas of business

• Cultural and language challenges

• Data: raw facts

• Transaction processing system (TPS)

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