The Strategic Role Of

Information Systems
 Introduction

Information system (IS)

Set of interrelated components: collect,
manipulate, store, and disseminate data and
information
Provides feedback to meet an objective
Examples: ATMs, airline reservation systems,
course reservation systems
Information Concepts: Data, Information,
and Knowledge

Data: raw facts

Alphanumeric, image, audio, and video
Information: collection of facts
organized in such a way that they have
additional value beyond the value of the
facts themselves
Data, Information, and Knowledge

Figure 1.2: The Process of Transforming Data into

Information
 The Value of Information
Value of information is directly linked to
how it helps decision makers achieve their
organization’s goals
For example, value of information might be
measured in:
Time required to make a decision
Increased profits to the company
 The Characteristics of Valuable
Information

Table 1.2: Characteristics of Valuable Information

 The Characteristics of Valuable
Information

Table 1.2: Characteristics of Valuable Information

(continued)
 What Is an Information
System?

Figure 1.3: The Components of an Information System

Computer-Based Information Systems

Figure 1.4: The Components of a Computer-Based

Information System
Traditional View of the Systems
Global System Configuration

Four types of system configuration:

Centralized Systems
Duplicated Systems
Decentralized Systems
Networked Systems
Business Information Systems

Figure 1.5: Business Information Systems

Types of Information Systems
TYPES OF INFORMATION SYSTEMS
Enterprise Systems
 Enterprise Systems
Benefits:
 Firm structure and
organization: One organization
 Management: Firm-wide
knowledge-based management
processes
 Technology: Unified platform
 Business: More efficient
operations and customer-driven
business processes
Challenges:
 Difficult to build: Require
fundamental changes in the way
the business operates
 Technology: Require complex
pieces of software and large
investments of time, money, and
expertise
 Centralized organizational
coordination and decision making:
Not the best way for the firms to
operate
 Management Information
Systems
Management information system
(MIS)
Organized collection of people,
procedures, software, databases, and
devices
Provides routine information to
managers/decision makers
Primary focus is operational efficiency
Management Information Systems

Figure 1.10: Management Information System

 Decision Support Systems

Decision support system (DSS)

Organized collection of people, procedures,
software, databases, and devices
Supports problem-specific decision making
Focus is on decision-making effectiveness
Decision Support Systems

Figure 1.11: Essential DSS Elements

 Specialized Business Information Systems:
Knowledge Management, Artificial Intelligence,
Expert Systems, and Virtual Reality
 Knowledge management systems (KMSs): an
organized collection of people, procedures, software,
databases, and devices to create, store, share, and
use the organization’s knowledge and experience
 Artificial intelligence (AI): field in which the
computer system takes on the characteristics of
human intelligence
 Artificial Intelligence

Figure 1.12: The Major Elements of Artificial Intelligence

Organizations and Information Systems

Figure 1.16: The Value Chain of a Manufacturing Company

 Organizations and Information Systems

Supply chain management (SCM)

Determines required supplies, needed
quantities, processing, and shipment
Customer relationship management (CRM)
Helps company manage all aspects of customer
encounters, including marketing,
advertisement, sales, service, and maintaining
loyalty
Specific Applications: Customer
Relationship Management (CRM)
 Specific Applications: Supply Chain

How do information systems facilitate supply chain

management?
Specific Applications: Collaborative Commerce

How do information systems facilitate collaborative

commerce?
Performance-Based Information
Systems

Figure 1.18: Three Stages in the Business Use of

Information Systems
 Roles, Functions, and Careers in the IS
Department

Figure 1.19: The Three Primary Responsibilities of Information

Systems
Global Challenges in Information Systems

 Cultural challenges  Product and service

 Language challenges challenges
 Time and distance  Technology transfer
challenges issues
 Infrastructure  State, regional, and
challenges national laws
 Currency challenges  Trade agreements