Discussion 1

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Information Systems: An Overview

Learning Outcomes

Discuss common applications of computers and information systems

Explain the differences between computer literacy and information literacy

Define transaction-processing systems

Define management information systems

Describe the four major components of an information system

Discuss the differences between data and information

LEARNING OUTCOMES

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Learning Outcomes (continued 1)

Explain the importance and applications of information systems in functional areas of a business

Discuss how information technologies are used to gain a competitive advantage

Explain the Five Forces Model and strategies for gaining a competitive advantage

Review the IT job market

Summarize the future outlook of information systems

LEARNING OUTCOMES (continued)

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Computers and Information Systems

Used by:

Organizations to reduce costs and gain a competitive advantage in the marketplace

Students for online classes

Grocery and retail stores

Telecommuters

Information systems and information technologies are terms that are used interchangeably

LO 1

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Computer Literacy

Using productivity software

Examples - Word processors, spreadsheets, database management systems, and presentation software

Having a basic knowledge of hardware and software, the Internet, and collaboration tools and technologies

LO 1

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Information Literacy

Understanding the role of information in generating and using business intelligence (BI) that:

Provides historical, current, and predictive views of business operations and environments

Gives organizations a competitive advantage in the marketplace

LO 2

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Transaction-Processing Systems (TPSs)

Focus on data collection and processing

Mainly used for cost reduction

Applied to structured tasks

Examples - Record keeping, simple clerical operations, and inventory control

Require minimal human involvement when automated

LO 3

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Management Information System (MIS)

Organized integration of:

Hardware and software technologies

Data

Processes

Human elements

Designed to produce timely, integrated, relevant, accurate, and useful information for making decisions

LO 4

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Management Information System (MIS) (continued)

Designing involves:

Defining the system’s objectives

Collecting and analyzing data

Providing information in a useful format for decision-making purposes

Applications are used in both private and public sectors

LO 4

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1.3 Major Components of an Information System

LO 5

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Exhibit

Data

Consists of raw facts

Sources of data

Internal data sources include sales and personnel records

External data sources include:

Customers, competitors, and suppliers

Government agencies and financial institutions

Labor and population statistics and economic conditions

LO 5

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Data (continued)

Has a time orientation

Can be collected in different forms

Aggregated data

Useful for reporting overall performance during a sales quarter

Disaggregated data

Helps analyze sales by product, territory, or salesperson

LO 5

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Database

Collection of relevant data organized in a series of integrated files

Essential for the success of any information system

Database management system (DBMS)

Used to create, organize, and manage databases

Reduces personnel time needed to gather, process, and interpret data manually

LO 5

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Process

Generates the most useful type of information for decision making, including:

Transaction-processing reports

Models for decision analysis that can be built into the system or accessed from external sources

LO 5

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Information

Consists of facts analyzed by the process component and is an output of an information system

Usefulness depends on the following qualities:

Timeliness

Integration with other data and information

Consistency and accuracy

Relevance

LO 5

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Information (continued 1)

Needs to provide either a base for users to explore different options or insight into tasks

Usefulness is affected by the information system’s user interface

Graphical user interfaces (GUIs) are used because they are flexible and easy to use

LO 5

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Information (continued 2)

Systems should produce information in different formats, including graphics, tables, and exception reports

Increases likelihood of users understanding and being able to use the information

Users need to be able to make use of informal information when solving problems

LO 5

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Information Technologies

Support information systems and use:

The Internet

Computer networks

Database systems

Point-of-sale (POS) systems

Radio-frequency-identification (RFID) tags

LO 5

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Importance of Information Systems

Timely, relevant, and accurate information is a critical tool for:

Enhancing a company’s competitive position in the marketplace

Managing the four Ms of resources

Manpower, machinery, materials, and money

LO 6

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Information Systems Used to Manage the Four Ms of Resources

Personnel information system (PIS) or human resource information system (HRIS)

Designed to provide information that helps decision makers in personnel carry out tasks effectively

Logistics information system (LIS)

Designed to reduce the cost of transporting materials while maintaining safe and reliable delivery

LO 7

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Information Systems Used to Manage the Four Ms of Resources (continued 1)

Manufacturing information system (MFIS)

Used to manage manufacturing resources so that companies can:

Reduce manufacturing costs

Increase product quality

Improve inventory decisions

LO 7

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Information Systems Used to Manage the Four Ms of Resources (continued 2)

Financial information system (FIS)

Used to provide information to financial executives in a timely manner

Marketing information system (MKIS)

Used to improve marketing decisions

Provides timely, accurate, and integrated information about the marketing mix

Price, promotion, place, and product

LO 7

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Marketing Technology Tools

Business analytics

Web and mobile analytics

E-mail marketing

Search engine optimization (SEO)

Mobile technologies

Marketing automation

LO 7

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Using Information Technologies for a Competitive Advantage

Michael Porter, a professor at Harvard Business School, identified three strategies for successfully competing in the market

Overall cost leadership

Differentiation

Focus

LO 8

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Using Information Technologies for a Competitive Advantage (continued 1)

Information systems

Help organizations reduce the cost of products and services

Help bottom-line and top-line strategies

Example: E-commerce

Use enterprise systems to create an efficient and effective link between suppliers and consumers

LO 8

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Using Information Technologies for a Competitive Advantage (continued 2)

If designed correctly, information systems assist with differentiation and focus strategies

Differentiation strategies

Making products and services different from competitors

Focus strategies

Focusing on specific market segments to achieve a cost or differentiation advantage

LO 8

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Porter’s Five Forces Model

Analyzes a firm’s position in the marketplace and how information systems can be used to make it more competitive

The five forces are:

Buyer power

Supplier power

Threat of substitute products or services

Threat of new entrants

Rivalry among existing competitors

LO 9

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1.4 The Five Forces Model

LO 9

Exhibit

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Porter’s Five Forces Model (continued 1)

Buyer power

High when customers have many choices and low when customers have few choices

Supplier power

High when customers have fewer options and low when customers have more options

Threat of substitute products or services

High when many alternatives to an organization’s products and services are available

LO 9

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Porter’s Five Forces Model (continued 2)

Threat of new entrants

Low when duplicating a company’s product or service is difficult

Focus strategies are used to ensure that the threat remains low

Rivalry among existing competitors

High when competitors occupy the same marketplace position

Low when there are few competitors

LO 9

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Categories of IT Jobs

Operations and help desk

Programming

Systems design

Web design and Web hosting

Network design and maintenance

Database design and maintenance

Robotics and artificial intelligence

LO 10

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Popular Jobs in the Information Systems Field

Chief technology officer (CTO)/chief information officer (CIO)

Oversees long-range planning and monitors new developments that can affect a company’s success

Chief privacy officer (CPO)

Responsible for managing risks and business impacts of privacy laws and policies

LO 10

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Popular Jobs in the Information Systems Field (continued 1)

Manager of information systems services

Responsible for managing hardware, software, and personnel in the information systems department

Systems analyst

Responsible for the design and implementation of information systems

Should have a sound understanding of business systems and functional areas within a business organization

LO 10

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Popular Jobs in the Information Systems Field (continued 2)

Network administrators

Oversee a company’s internal and external network systems

Provide network and cybersecurity

Database administrators (DBA)

Responsible for database design and implementation

Required to have knowledge and understanding of data warehouses and data-mining tools

LO 10

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Popular Jobs in the Information Systems Field (continued 3)

Computer programmers

Write programs or software segments that allow the information system to perform a specific task

Webmasters

Design and maintain the organization’s Web site

Have been in high demand owing to the popularity of e-commerce applications

LO 10

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Outlook for the Future

Hardware and software costs will decline

Artificial intelligence and related technologies will improve and expand

Computer literacy and networking technology will improve

Personal computers will improve in power and quality

Internet growth will continue

LO 11

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Outlook for the Future (continued 1)

Computer criminals will become more sophisticated

Protecting personal information will become more difficult

Some of the trends that should continue into the future include:

Ubiquitous computing and the Internet of Things (IoT)

LO 11

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Outlook for the Future (continued 2)

3D printing, pervasive analytics, context aware computing, smart machines and devices, and cloud computing

Software defined applications and infrastructures

Importance of computer and network security

Increased applications of augmented and virtual reality

LO 11

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Key Terms

Computer literacy

Information literacy

Business intelligence (BI)

Transaction-processing systems (TPSs)

Management information system (MIS)

Data

Database

Process

Information

Information technologies

Five Forces Model

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KEY TERMS

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Summary

Computers and information systems are used to reduce costs and gain a competitive advantage in the marketplace

Computer and information literacy are two types of knowledge required to be competitive in the workplace

Information systems include data, database, process, and information

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SUMMARY

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Summary (continued)

Information systems are designed to collect data, process it, and deliver timely, relevant, and useful information for making decisions

Five Forces Model is used to analyze a firm's position in the marketplace

Some segments of the IT job market have shown growth compared to other job markets, even during economic downturn

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SUMMARY (continued)

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