Basic Themes
•
•
•
•
•
Information 
Information helps meet goals 
Systems are artifacts 
Organizations run on information 
Systems provide careers 

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Principles and Learning Objectives-1
• The value of information is directly linked to how
it helps decision makers achieve the organization’s
goals
– Distinguish data from information and describe the
characteristics used to evaluate the quality of data
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Organization
GOAL
Information
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Principles and Learning Objectives -2
• Knowing the potential impact of information
systems and having the ability to put this
knowledge to work can result in a successful
personal career, organizations that reach their
goals, and a society with a higher quality of life
– Identify the basic types of business information
systems and discuss who uses them, how they are
used, and what kinds of benefits they deliver
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Principles and Learning Objectives-3
• 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
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Principles and Learning Objectives-4
• The use of information systems to add value to the
organization can also give an organization a
competitive advantage
– Identify the value-added processes in the supply
chain and describe the role of information systems
within them
– Identify some of the strategies employed to lower
costs or improve service
– Define the term competitive advantage and discuss
how organizations are using information systems to
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Principles and Learning Objectives-5
• Information systems personnel are the key to
unlocking the potential of any new or modified
system
– Define the types of roles, functions, and careers
available in information systems
– Can (and will) also include many users
– Will (most certainly) include all workers
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Introduction
• Information system (IS)
– Set of interrelated components: collect, manipulate,
disseminate data and information
– Provide feedback to meet an objective
– Examples: ATMs, airline reservation systems, course
reservation systems
What is Information, really?
Why have it?
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What Your Mother Taught You
See
Something
Happens
MIS 300 Chapter 1
Think
Say
Do
Response
Required
9
What Herbert Simon Won the Nobel Prize
For
Intelligence
Something
Happens
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Design
Choice
Execution
Mgmt
Decision
Required
10
What’s Behind the Model of Rational
Decision Making
Optimize
or
Satisfice?
Gather
information
Intelliabout pertinent
gence
events
Something
Happens
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Reflect
against
what is
known
All activity
depends on
requirements and
resources
available
Select one
alternative
course of
action
Implement
the
decision
Mgmt
Decision
Required
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What ‘s Wrong with This Model?
Intelligence
Something
Happens
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Design
Choice
Execute
Mgmt
Decision
Required
12
Information Concepts: Data Versus
Information
• Data: raw
facts of machines’ experiences
Recordings
– Alphanumeric, image, audio, and video
• Information
data or other information
– Organized collection of facts
– Have value beyond the facts
themselves
components
themselves
Information is “information” only to the extent
that it informs a user or consumer. That
means that the informationness of an
experience depends on the observer and what
the observer has to do (intention)!
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Data Versus Information (continued)
Figure 1.1: Defining and Organizing Relationships Among Data
Creates Information
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Data Versus Information (continued)
Selecting, organizing and manipulating,
conditioned by existing models and
subsequent need for action.
Figure 1.2: The Process of Transforming Data into Information
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The Characteristics of Valuable
Information
Table 1.2: Characteristics of Valuable Information
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The Characteristics of Valuable
Information (continued)
Table 1.2: Characteristics of Valuable Information (continued)
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What Is an Information System?
This is only one view. A system is much
more complex. A behavioral view will
keep in mind intentions, skills, judgments,
and prior knowledge (theory)
Figure 1.3: The Components of an Information System
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Computer-Based Information Systems
• Manual versus computerized information systems
• Computers are NOT necessary in information
systems, but they have certain efficiencies
• Computer-based information system (CBIS)
– Hardware, software, databases, telecommunications,
people, and procedures
– Collect, manipulate, store, and process data into
 information
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Computer-Based Information Systems
(continued)
The
infrastructur
e (left)
What you
experience
(above)
Figure 1.4: The Components of a Computer-Based Information
System
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Business Information Systems
• Most common types of information systems used in
business organizations:
– Electronic and mobile commerce systems 
– Transaction processing systems 
– Management information systems 
– Decision support systems 
– Specialized business information systems 
These are detailed next.
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Electronic and Mobile Commerce
• E-commerce: any business transaction executed
electronically between parties such as:
–
–
–
–
–
Companies (B2B)
Companies and consumers (B2C)
Consumers and other consumers (C2C)
Business and the public sector
Consumers and the public sector

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Transaction Processing Systems
• Transaction: business-related exchange
– Payments to employees
– Sales to customers
– Payments to suppliers
• Transaction processing system (TPS)
– A collection of people, procedures, software,
databases, devices
– Records completed business transactions
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Transaction Processing Systems
(continued)
Figure 1.7: A Payroll Transaction Processing System
The inputs (numbers of employee hours worked and pay rates)
go through a transformation process to produce outputs
(paychecks)
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Enterprise Resource Planning
• Integrated programs that manage all business
operations
• Coordinate planning, inventory control, production,
and ordering among others
• Historically based in production systems
• Hard to translate to other types of business
• Necessarily complex

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Management Information Systems
• Management information system (MIS)
– A collection of people, procedures, software,
databases, devices
– Provides information to managers/decision makers
• Primary focus is operational efficiency
• MIS outputs
– Scheduled reports
– Demand reports
– Exception reports
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Management Information Systems
(continued)
Figure 1.8: Functional management information systems draw
data from the organization’s transaction processing system
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Decision Support Systems
• Decision support system (DSS)
– A collection of people, procedures, software,
databases, devices
– Supports problem-specific decision making
• Focus is on decision-making effectiveness
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Decision Support Systems (continued)

Figure 1.9: Essential DSS Elements
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Systems Development
• Systems development
– Creating or modifying existing business systems
• Systems investigation: gain an understanding
• of the problem to be solved or opportunity to be
addressed
• Systems analysis: define problems and
opportunities of the existing system
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Systems Development (continued)
• Systems design: determine how the new system
will work to meet the business needs defined during
systems analysis
• Systems implementation: create or acquire the
various system components defined in the design
step, assembling them, and putting the new system
into operation
• Systems maintenance and review: check and
modify the system so that it continues to meet
changing business needs

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Organizations and Information Systems
• Organization: a collection of people and other
resources established to accomplish a set of goals
• An organization is a system
– Inputs: resources (materials, people, money)
– Outputs: goods or services
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Organizations and Information Systems
(continued)
Figure 1.13: A General Model of an Organization
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Organizations and Information Systems
(continued)
• Value chain: a series (chain) of activities that
includes inbound logistics, warehouse and storage,
production, finished product storage, outbound
logistics, marketing and sales, and customer service
• Upstream management: management of raw
materials, inbound logistics, and warehouse and
storage facilities
• Downstream management: management of
finished product storage, outbound logistics,
marketing and sales, and customer service
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Organizations and Information Systems
(continued)
Figure 1.14: The Value Chain of a Manufacturing Company
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Organizations in a Global Society
• As companies rely on virtual structures and
outsourcing to a greater extent, businesses can
operate around the world
• Challenges to operating in a global society
– Every country has a set of customs, cultures,
standards, politics, and laws
– Language barriers
– Difficulty in managing and controlling operations in
different countries
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Competitive Advantage
• Significant, long-term benefit to a company over its
competition
• Ability to establish and maintain a competitive
advantage is vital to a company’s success
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Factors That Lead Firms to Seek
Competitive Advantage
•
•
•
•
Rivalry among existing competition
Threat of new entrants
Threat of substitute products and services
Bargaining power of customers and suppliers
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Strategic Planning for Competitive
Advantage
•
•
•
•
Change the structure of the industry
Create new products or services
Improve existing products or services
Use information systems for strategic purposes
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Strategic Planning for Competitive
Advantage (continued)
Table 1.5: Competitive Advantage Factors and Strategies
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Strategic Planning for Competitive
Advantage (continued)
Table 1.5: Competitive Advantage Factors and Strategies
(continued)
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Return on Investment and the Value of
Information Systems
•
•
•
•
Earnings growth
Market share
Customer awareness and satisfaction
Total cost of ownership

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Careers in Information Systems
• Degree programs
– Degrees in information systems
– Business degrees with a global or international
orientation
• Computer systems are making IS professionals’
work easier
• Opportunities in information systems are not
confined to single countries
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Careers in Information Systems
(continued)
Figure 1.16: The Three Primary Responsibilities of Information Systems
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Roles, Functions, and Careers in the IS
Department
• Primary responsibilities in information systems
– Operations: focuses on the efficiency of information
– Systems development: focuses on development
projects and ongoing maintenance and review
– Support: provides user assistance
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Typical IS Titles and Functions
• Chief information officer (CIO): uses IS department
equipment and personnel
• LAN administrators: set up and manage the network
hardware, software, and security processes
• Internet careers
–
–
–
–
Strategists
Programmers
Web site operators
Chief Internet officer
• Other IS careers

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Summary
• Data: raw facts
• Information: organized collection of facts
• System components: input, processing, output, and
feedback
• Computer-based information system (CBIS)
– Hardware, software, databases, telecommunications,
people, and procedures
– Collect, manipulate, store, and process data into
information
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Summary (continued)
• Transaction processing system (TPS): a collection
of people, procedures, software, databases, and
devices used to record completed business
transactions
• Management information system (MIS): a collection
of people, procedures, software, databases, and
devices used to provide routine information to
managers and decision makers
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Summary (continued)
• Decision support system (DSS): a collection of
people, procedures, software, databases, and
devices used to support problem-specific decision
making
• Systems development: creating or modifying
existing business systems
• Competitive advantage: significant, long-term benefit
to a company over its competition
• Primary responsibilities in information systems:
operations, systems development, and support
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