Business Information Systems: An Overview

The Purpose of Information Systems
Businesses use information systems
To make sound decisions
To solve problems
Problem is any undesirable situation
Decision arises when more than one solution to problem exists
The Purpose of Information Systems (continued)
Problem solving and decision making require information
Keys to success in business are
Gathering correct information
Storing information
Using information

Data, Information, and Information Systems
“Data”, “information” and “system” are commonly used terms
Important to understand their similarities and differences


Data: a given or fact
Can be number, statement, or picture
Information: facts or conclusions that have meaning within context
Composed of data that is manipulated
Data Manipulation
Data is manipulated to make useful information
Survey is common method of collecting data
Raw data is hard to read
Information is more useful to business than data
Generating Information
A process is manipulation of data
Process usually produces information
Process may produce more data
A piece of information in one context may be considered data in another context
Generating Information
Information in Context
Not all information is useful
Useful information is
Relevant
Complete
Accurate
Information in Context
Useful information is
Current
Obtained economically (in business)
Information in Context
What Is a System?
System: array of components that work together to achieve goal or goals
System
Accepts input
Processes input
Produces output

What is a system?
System may have multiple goals
System may contain subsystems
Subsystems have sub-goals that meet main goal
Subsystems transfer output to other subsystems

Closed system: has no connections with other systems
Open system: interfaces and interacts with other systems
Often a subsystem of a bigger system
Information system: processes data and produces information

Information and Managers
Systems thinking: thinking of an organization in terms of subsystems
Database: collection of electronic records
Information systems automate exchange among subsystems
Information map: network of information systems
Information technology: technologies that facilitate construction and maintenance of information systems
The Benefits of Human-Computer Synergy
Humans are relatively slow and make mistakes
Computers cannot make decisions
Synergy: combining resources to produce greater output
The Benefits of Human-Computer Synergy
Information Systems in Organizations
Computer-based Information system: system with computer at center
Certain trends have made information systems important in business
Organizations lag behind if they do not use information systems
Components of information systems
The Four Stages of Processing
Input: collect and introduce data to system
Transaction: a business event, usually entered as input
Data processing: perform calculations on input
Output: what is produced by the information system
Storage: vast amounts of data stored on optical discs
Computer Equipment for Information Systems
Input devices: receive input
Computer: process data
Output: displays information
Storage devices: store data
Network devices: transfer data
Computer Equipment for Information Systems
From Recording Transactions to Providing Expertise: Types of Information Systems
Many types of information systems
Capabilities of applications have been combined and merged
Management Information System: supports planning, control, and making decisions

Transaction Processing Systems

Most widely used type of system
Records data collected at point where organization interacts with other parties
Encompasses cash registers, ATMs and purchase order systems
Supply Chain Management Systems

Supply chain: sequence of activities involved in producing products
Activities include marketing, purchasing raw materials, manufacturing, shipping, billing, collection, and after-sale services
Also known as enterprise resource planning systems
Customer Relationship Management Systems
Customer relationship management: managing relations with customers
Used in combination with telephones to provide customer service
Often linked to Web applications that track online transactions
Business Intelligence Systems

Business Intelligence: gather data to help organization compete
Often contains statistical models
Access large pools of data
Data warehouse: large database that usually store transactional records
Decision Support and Expert Systems

Decision support system: supports decision-making
Relies on models to produce tables
Extrapolates data to predict outcomes
Expert system: supports knowledge-intensive decision-making
Uses artificial intelligence

Geographic Information Systems
Geographic information system: ties data to physical locations
Represents data on a map in different formats
May reflect demographic information in addition to geographic
May use information from GPS satellites
Geographic Information Systems
Information Systems in Business Functions
Functional business area: services within a company that support main business
Includes accounting, finance, marketing, and human resources
Part of a larger enterprise system


Accounting

Information systems help record transactions
Produce periodic statements
Create required reports for law
Create supplemental reports for managers
Finance

Finance systems facilitate financial planning and business transactions
Tasks include organizing budgets, managing cash flow, analyzing investments, and making decisions
Marketing

Pinpoint likely customers and promote products
Marketing information systems analyze demand for products in regions and demographic groups
Identify trends in demand for products/services
Web provides opportunity to collect marketing data
Human Resources

Human resource management systems aid record-keeping
Must keep accurate records
Aids recruiting, selection, placement, and reward analysis
Performance evaluation systems provide grading utilities

Web Empowered Enterprises
E-commerce: Buying and selling goods and services through Internet
Internet is a vast network of computers connected globally
Web has a profound impact on information systems

Chief Information Officer and Chief Technology Officer
Chief information officer: responsible for all aspects of information system
Often the vice president
Chief technology officer: has similar duties as CIO

Chief Information Officer and Chief Technology Officer