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Foundations of Information
Systems in Business
Chapter 1 OBrien, James A.,
Management Information Systems,
6
th
edition, McGraw-Hill, USA, 2004.
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Definition of IS

A set of people, procedures, and
resources that collects, transforms,
and disseminates information in an
organization.
(OBrien, James A., Management Information Systems, 4th edition,
McGraw-Hill, USA, 1999.).

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What is a System?
A system is a group of interrelated components
working together toward a common goal by
accepting inputs and producing outputs in an
organized transformation process.
A system consists of three basic interacting
components:
input captures elements that enter the system
process converts input into outputs
output transfers elements that have been produced by a
transformation process to their ultimate destination.
A cybernetic (self-monitoring/self-regulating)
system contains feedback and control components.
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A Framework for Business End Users
Foundation concepts (fundamental behavioral and
technical concepts)
Information Technology (hardware, software,
networks, and data management)
Business Applications (uses for the operations,
management, and competitive advantage of an
enterprise)
Development Process (develop IS solutions to
business problems using fundamental problem-
solving and development methodologies)
Management Challenge (how to manage resources
and strategies)
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Why Study IS ?
IS has become a vital component of successful
businesses and organizations.
It constitutes an essential field of study in business
administration and management.
Business firms depend on all of their managers and
employees to help them manage their use of IS and
IT.

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The Increasing Value of IT
The rapid pace of change in todays business
environment has made IS and IT vital components
that help keep an enterprise on target to meet its
business goals.
IT has become an indispensable ingredient in several
strategic thrusts that businesses have initiated to
meet the challenge to change.
Such thrusts include:
the internetworking of computing
internetworking the enterprise
globalization
business process reengineering
using IT for competitive advantage

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Global Information Society
Evolution of humans society: agricultural
industrial knowledge.
In knowledge society, people spend most of their
time communicating and collaborating in teams and
workgroups and creating, using, and distributing
information.
Knowledge workers include executives, managers,
and supervisors, accountants, engineers, scientists,
stockbrokers, and teachers.

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Components of an IS (1)
An Information system consists of people, hardware,
software, data, and network resources.
All those resources perform input, processing,
output, storage, and control activities that transform
data resources into information products.
Examples of People Resources are:
Specialists - systems analysts, programmers, computer
operators
End users - anyone else who uses information systems
Examples of Hardware Resources:
Machines - Computers, printers, scanner
Media - floppy disk, paper forms, optical-disks
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Components of an IS (2)
Examples of Software Resources:
Programs - O/S, payroll, word-processor
Procedures - data entry procedure, error correction
procedure, paycheck distribution procedure
Examples of Data Resources
Product descriptions, customer records, employee files,
inventory databases
Examples of Network Resources
Communications media, communication processors,
network access and control software
Examples of Information Products
Management reports and business documents
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IS Activities
Data or information processing that take place in IS
are:
Input of data resources
Processing of data into information
Output of information products
Storage of data resources
Control of the system (IS) performance

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Major Roles of IS
Support for business processes
retail stores record customer purchases by using CBIS
Support for decision making
what lines of merchandise need to be added or
discontinued
Support for competitive advantage
installing touch-screen kiosks in stores linked with e-
commerce website attract new customers and build
customer loyalty because of the ease of shopping.

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Trends in IS
The roles of IS keep expanding from time to time:
1950s-1960s : Data Processing
Transaction processing, record keeping
1960s-1970s : Management Reporting / MIS
Management reports of prespecified information
1970s-1980s : Decision Support
Interactive ad hoc support for Managerial decision-making
process
1980s-1990s : Strategic and End User Supports
EUC, EIS, ES (knowledge-based, SIS (strategic products and
services for competitive advanteges)
1990s-2000s : Enterprise and Global Internetworking ?
Internetworked Information System
Internetworked entriprise and global e-business
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Types of IS
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Success and Failure with IT (1)
IT implementation in some companies is successful,
but in other companies it fails.
Therefore it is important to realize that IT can be
mismanaged and misapplied so that it causes
business failure.
Some reasons for success are:
user involvement
executive management support
clear statements of requirements
proper planning
realistic expectations
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Success and Failure with IT (2)
Some reasons for failure are:
lack of user input
incomplete requirements and specifications
changing requirements and specifications
lack of executive support
technological incompetence.