Foundations of Information Systems

in Business

Chapter OneModule I – Foundation Concepts

IS 605

• An Essential Field of Study in Business

• What are the differences among the following fields: – Management Information Systems (MIS)– Computer Information Systems (CIS)– Information Technology (IT)– Computer Sciences (CS)– Computer Engineering

Foundation Concepts: Information Systems in Business

Why an MBA Student need to know MIS/CIS/IT?

• The role of IT in business• Use a IT as a tool• Understand how to use IT as a competitive weapon• Understand the impact of IT on business

– Good or bad– Predicate next wave of the technologies

• Become IT/IS/CS literacy• Know how to deal with IT people• While you may know/use some of the IT technologies,

the course provides a systematic review for the theory or practices.

Real World Case - Amazon.ComReal World Case - Amazon.Com

• “In the physical world, it’s old saw: location, location, location”

• “Three most important things are for us are Technology, Technology, and Technology” Jeff Bezos, CEO of Amazon

• Computerized Warehouse at Fernley, Nevada• Turnover rate for the warehouse is 20 times

Real World Case - Amazon.Com Real World Case - Amazon.Com (Continue)(Continue)

• “The trouble with most companies is that they make judgment-based decisions when data-based decision can be made.”

Roles of IS in Business

SupportBusiness Processes and Operations

SupportBusiness Decision

Making

SupportStrategies

for CompetitiveAdvantage

Roles of e-Business in Business

Suppliers and OtherBusiness Partners

The InternetThe Internet ExtranetsExtranetsCompanyBoundary

Consumers andBusiness Customers

ExtranetsExtranets

Supply chain management:Procurement, Distribution, and Logistics

Customer relationship management:Marketing Sales Customer Service

Engineering andResearch

Manufacturingand Production

Accounting andFinance

IntranetsIntranets

IntranetsIntranets

Trends in Information Systems

Data Processing: 1950s – 1960sElectronic Data Processing Systems

Management Reporting: 1960s – 1970sManagement Information Systems

Decision Support: 1970s – 1980sDecision Support Systems

Electronic Business & Commerce: 1990s – 2000sInternet-Based E-Business and E-

Commerce systemsStrategic and End User Support: 1980s – 1990sEnd User Computing SystemsExecutive Information SystemsExpert SystemsStrategic Information Systems

Ex

pa

nd

ing

Pa

rtic

ipa

tio

n o

f E

nd

Us

ers

an

d M

an

ag

ers

in

IS

Ex

pa

nd

ing

Ro

les

of

IS i

n B

us

ine

ss

an

d M

an

ag

em

en

t

Types of Information Systems

EnterpriseCollaboration

Systems

ManagementInformation

Systems

ProcessControlSystems

TransactionProcessing

Systems

DecisionSupportSystems

ExecutiveInformation

Systems

OperationsSupportSystems

ManagementSupportSystems

InformationSystems

ProcessingProcessingBusinessBusiness

TransactionsTransactions

ControlControlof Industrialof IndustrialProcessesProcesses

Team andTeam andWorkgroupWorkgroup

CollaborationCollaboration

PrespecifiedPrespecifiedReportingReporting

for Managersfor Managers

InteractiveInteractiveDecisionDecisionSupportSupport

InformationInformationTailored forTailored forExecutivesExecutives

Support of

Support of

Busines

s

Busines

s

Operat

ions

Operat

ions

Support of

Support ofManagerial

Managerial

Decision Making

Decision Making

Other Information Systems• Expert Systems (ES)

• Knowledge Management Systems

• Functional Business Systems

• Strategic Information Systems (SIS)

• Cross-Functional Information Systems

• Problems with ERP Software• $112 Million Project –

– Order Processing Problems– Multiple Vendor Applications Being

Installed Simultaneously• Initial Problems to Implement

• Recent Success with Upgrades

Hershey Foods:Failure and Success with IT

Managerial Challenges of IT

• Distributor of Electrical Products and Supplies– Over 6,000 Employees– 5 Distribution Centers – 360 Branches Worldwide– Over 100,000 Customers

• New E-Business Ordering System• Increased Sales and Cut Costs• Est. $12 million Savings Annually

WESCO InternationalE-Business Sales and Supplier System

Roles of e-Business in Business

Developing IS Solutions

InvestigateInvestigate

AnalyzeAnalyze

DesignDesign

ImplementImplement

MaintainMaintain

Challenges of Ethics and IT• Ethical Responsibilities• Be a Responsible End-User

Applicationsof IT

PotentialHarms

PotentialRisks

PossibleResponses

CustomerCustomerRelationshipRelationshipManagementManagement

HumanHumanResourcesResourcesManagementManagement

BusinessBusinessIntelligenceIntelligenceSystemsSystems

Infringe-Infringe-ments onments onPrivacyPrivacy

InaccurateInaccurateInformationInformation

CollusionCollusion

CustomerCustomerBoycottsBoycotts

WorkWorkStoppagesStoppages

GovernmentGovernmentInterventionIntervention

Codes ofCodes ofEthics Ethics

IncentivesIncentives

CertificationCertification

Systems Concepts: A Foundation

What is a System?• Input

• Processing

• Output

• Feedback

• Control

Information System ModelStakeholders in the Business Environment

The CommunityThe Community CompetitorsCompetitors

Financial InstitutionsFinancial Institutions Labor UnionsLabor Unions

Go

ve

rnm

en

t A

ge

nc

ies

Go

ve

rnm

en

t A

ge

nc

ies

Su

pp

liers

Su

pp

liers

Cu

sto

me

rsC

us

tom

ers

Sto

ckh

old

ers

Sto

ckh

old

ers

Management

Information Systems

InputInput ProcessingProcessing OutputOutput

ControlControl

FeedbackFeedback

EconomicResources

BusinessResources

Goods &Services

Components of an Information Systems 1. People Resources

- End Users - - IS Specialists

2. Hardware- Machines - Media

3. Software- Programs - Procedures

4. Data Resources- Data and Knowledge Bases

5. Network Resources- Communications Media and

Networks

Software Resources- System Software- Application Software- Procedures

Data Resources- Data Bases - Knowledge Bases

Data vs. Information

Components of an Information Systems (Continue)

Kodak, HP, andAmersham Biosciences

What is the business challenge What is the business challenge facing companies like Kodak and facing companies like Kodak and HP in supporting their global HP in supporting their global sales forces? How successfully is sales forces? How successfully is the Eloquent software tool the Eloquent software tool helping these two companies meet helping these two companies meet this challenge? Explain.this challenge? Explain.

Kodak, HP, andAmersham Biosciences

• Silo syndrome - The Cost of Employee Time Spent on Research, Preparing Reports and Developing Support for the Sales Staff Without an Easy Way to Access the Information

• Data is Being Collected, but Kodak and HP are not Good at Sharing and Updating the Data

• Unused Valuable Marketing Information and Other Intellectual Property

Challenges would include:Challenges would include:

Kodak, HP, andAmersham Biosciences

• Ability to Deliver a Full Range of Product Information – Includes Text, Synchronized Video,

Graphics, Audio and Search Capabilities to Globally Dispersed Sales Organizations

• Allowing People to get More Done and Spend More Face Time with Customers as Opposed to Calling on the Phone to Kodak

How successful is the Eloquent How successful is the Eloquent software tool is described by software tool is described by Kodak and HP:Kodak and HP: