Chapter 2

FUNDAMENTALS OF
INFORMATION SYSTEMS
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.
Systems have the following three basic interacting functions.
Input.

Input involves capturing and assembling elements that enter

the system to be processed.
Processing.

Processing involves the transformation of input into output.

Output.

Output is the end result of the transformation process. Output

involves transferring elements that have been produced by a
transformation process to their ultimate destination.
What is a System?
Environment

Feedback Feedback
Signals Signals
Control Control by Control
Signals Management Signals

Input of Manufacturing Output of

Raw Materials Process Finished Products

System Boundary
Other Systems
 What is System? (continued)

4 Fundamentals of Information Systems, Sixth Edition

 Input, Processing, Output, Feedback
5

Input:
Activity of gathering and capturing raw data
Processing:
Converting data into useful outputs
Output:
Production of useful information, usually in the
form of documents and reports
Feedback:
Information from the system that is used to
make changes to input or processing activities
Fundamentals of Information Systems, Sixth Edition
Components of an Information
System
People

Information
Systems
Resources
Cont.
People Resources. People are required for operation of all ISs. People resources include:
End Users. As mentioned, these people use the IS or the information it produces.
IS Specialists. These people develop and operate the IS.

Data Resources. Data is both the raw material of and among the most
valuable organizational resources in the IS. Data can be in alphanumeric, text,
image and/or audio form. Data are typically organized into either Databases -
which hold processed and organized data; or Knowledge bases - which hold
knowledge in a variety of forms such as facts and rules of inference about a
given subject.

Hardware Resources. These include all the physical devices and materials used in
information processing, including all machines and data media. Key components include:
Computer Systems. These are the CPUs and their related peripherals, such as terminals
and networked PCs.
Computer Peripherals. These are input and output devices like keyboards, monitors, and
secondary storage.
Telecommunications Networks. These are the computer systems interconnected by
various telecommunications media such as modems.
Cont.
Software Resources. These include all
sets of information processing
instructions. Software resources include:
System Software. This controls the
computer.
Application Software. These are for a
specific end user task, such as word-
processing.
Procedures. These are the operating
instructions for the people who use the
IS
 Information Concepts
9

Information:
One of an organizations most valuable
resources
Often confused with the term data

Fundamentals of Information Systems, Sixth Edition

 Information system (IS):
10

Information system (IS):

A set of interrelated components that
collect, manipulate, and disseminate data
and information and provide feedback to
meet an objective
An information system (IS) is a group of
components that interact to produce
information
Businesses:
Can use information systems to increase
revenues and reduce costs
Fundamentals of Information Systems, Sixth Edition
 Why Learn About Information Systems in
Organizations?
11

Information systems used by:

Sales representatives
Managers
Financial advisors
Information systems:
Indispensable tools to help you achieve
your career goals

Fundamentals of Information Systems, Sixth Edition

 Data, Information, and
12
Knowledge
Data:
Raw facts
Information:
Collection of facts organized in such a way that
they have value beyond the facts themselves
Process:
Set of logically related tasks
Knowledge:
Awareness and understanding of a set of
information

Fundamentals of Information Systems, Sixth Edition

 Data, Information, and Knowledge
(continued)

13 Fundamentals of Information Systems, Sixth Edition

 Data, Information, and Knowledge
14 (continued)

Fundamentals of Information Systems, Sixth Edition

 The Characteristics of Valuable
Information
15

If an organizations information is not

accurate or complete:
People can make poor decisions, costing
thousands, or even millions, of dollars
Depending on the type of data you need:
Some characteristics become more
important than others

Fundamentals of Information Systems, Sixth Edition

 Manual and Computerized Information
Systems
16

An information system can be:

Manual or computerized
Example:
Investment analysts manually draw charts
and trend lines to assist them in making
investment decisions
Computerized information systems:
Follow stock indexes and markets and
suggest when large blocks of stocks should
be purchased or sold
Fundamentals of Information Systems, Sixth Edition
 Computer-Based Information Systems
17

Single set of hardware, software,

databases, telecommunications, people,
and procedures:
That are configured to collect, manipulate,
store, and process data into information
Technology infrastructure:
Includes all hardware, software, databases,
telecommunications, people, and
procedures
Configuredto collect, manipulate, store, and
process data into information
Fundamentals of Information Systems, Sixth Edition
 Computer-Based Information
Systems (continued)

18 Fundamentals of Information Systems, Sixth Edition

 Computer-Based Information Systems
(continued)
19

Hardware:
Consists of computer equipment used to
perform input, processing, and output activities
Software:
Consists of the computer programs that govern
the operation of the computer
Database:
Organized collection of facts and information,
typically consisting of two or more related data
files

Fundamentals of Information Systems, Sixth Edition

 Computer-Based Information Systems
(continued)
20

Telecommunications, networks, and the

Internet:
The electronic transmission of signals for
communications
Networks:
Connect computers and equipment to enable
electronic communication
Internet:
Worlds largest computer network, consisting of
thousands of interconnected networks, all freely
exchanging information
Fundamentals of Information Systems, Sixth Edition
 Computer-Based Information Systems
(continued)
21

Intranet:
Internal network that allows people within
an organization to exchange information
and work on projects
Extranet:
Network that allows selected outsiders,
such as business partners and customers,
to access authorized resources of a
companys intranet

Fundamentals of Information Systems, Sixth Edition

 Computer-Based Information Systems
(continued)
22

People:
The most important element in most
computer-based information systems
Procedures:
Include strategies, policies, methods, and
rules for using the CBIS

Fundamentals of Information Systems, Sixth Edition

 Types of Information Systems

Information Systems

Operations Management
Support Support
Systems Systems

Transaction Process Enterprise Management Decision Executive

Processing Control Collaboration Information Support Information
Systems Systems Systems Systems Systems Systems
 Operations support systems
24

Operations support systems process data generated

by and used in business operations. They produce a
variety of information products for internal and external
use. Operations support systems do not emphasize
producing the specific information products that can best
be used by managers.
1. Transaction:

Any business-related exchange, such as payments to employees

and sales to customers
2. Transaction processing system (TPS):
Organized collection of people, procedures, software, databases,
and devices used to record completed business transactions

Fundamentals of Information Systems, Sixth Edition

 Enterprise Systems: Transaction
Processing Systems and
Enterprise Resource Planning
(continued)

25 Fundamentals of Information Systems, Sixth Edition

 Enterprise Systems: Transaction Processing Systems
and Enterprise Resource Planning (continued)
26

Enterprise resource planning:

Set of integrated programs that manages
the vital business operations for an entire
multisite, global organization

Fundamentals of Information Systems, Sixth Edition

 Information and Decision Support
Systems
27

Management information system (MIS):

Organized collection of people, procedures,
software, databases, and devices that
provides routine information to managers
and decision makers

Fundamentals of Information Systems, Sixth Edition

 Information and Decision Support Systems
(continued)
28

Fundamentals of Information Systems, Sixth Edition

 Information and Decision Support Systems
(continued)
29

Decision support system (DSS):

Organized collection of people, procedures,
software, databases, and devices that support
problem-specific decision making
Can include:
A collection of models used to support a decision
maker or user (model base)
A collection of facts and information to assist in
decision making (database)
Systems and procedures (user interface or dialogue
manager) that help decision makers and other users
interact with the DSS
Fundamentals of Information Systems, Sixth Edition
 Information and Decision Support
Systems (continued)

30 Fundamentals of Information Systems, Sixth Edition

 Management support systems

Management support systems assist managers in

decision making. Providing information and support for
decision making by all types of managers and business
professionals is a complex task.
1. Management information systems - provide
information in the form of reports and displays to
managers and many business professionals.
2. Decision support systems - give direct computer
support to managers during the decision-making process.
3. Executive information systems - provide critical

information from a wide variety of internal and external

sources in easy-to-use displays to executives and
managers.
 Electronic and Mobile
32
Commerce
E-commerce:
Any business transaction executed
electronically between:
Companies (business-to-business, B2B)
Companies and consumers (business-to-
consumer, B2C)
Consumers and other consumers (consumer-to-
consumer, C2C)
Business and the public sector
Consumers and the public sector

Fundamentals of Information Systems, Sixth Edition

 Electronic and Mobile Commerce
(continued)
33

Mobile commerce (m-commerce):

The use of mobile, wireless devices to place
orders and conduct business
E-commerce:
Can enhance a companys stock prices and
market value
Electronic business (e-business):
Uses information systems and the Internet to
perform all business-related tasks and
functions
Fundamentals of Information Systems, Sixth Edition
 Electronic and Mobile Commerce
(continued)

34 Fundamentals of Information Systems, Sixth Edition

Learning ?