Information Systems Lecture Notes Flashcards

Principles and Learning Objectives

• Discuss why understanding information systems is important.
• Differentiate between data and information and describe data evaluation characteristics.
• Name the components of an information system and describe system characteristics.
• List the components of a computer-based information system.
• Identify basic types of business information systems, their users, how they are used, and their benefits.
• Identify major steps in systems development and the goal of each.
• Describe threats to information systems and Internet security and privacy.
• Discuss the expanding role and benefits of information systems in business and industry.

Why Learn About Information Systems?

• Information System (IS): A set of interrelated components that collect, manipulate, and disseminate data and information, providing feedback to meet an objective.
• Businesses: Can use information systems to increase revenues and reduce costs.
• Information systems used by:
  • Sales representatives
  • Managers
  • Financial advisors
• Information systems: Indispensable tools for achieving career goals.

Information Concepts: Data, Information, and Knowledge

• Information: One of an organization’s most valuable resources, often confused with data.
• Data: Raw facts.
• Information: Collection of facts organized to have value beyond the facts themselves.
• Process: Set of logically related tasks.
• Knowledge: Awareness and understanding of a set of information.

Data Types

• Alphanumeric data: Numbers, letters, and other characters.
• Image data: Graphic images and pictures.
• Audio data: Sound, noise, or tones.
• Video data: Moving images or pictures.

Data Transformation

• Data is transformed into information through a process of selecting, organizing, and manipulating it, applying knowledge.

Characteristics of Valuable Information

• If information is inaccurate or incomplete, poor decisions can result, costing significant amounts of money.
• The importance of characteristics varies depending on the data needed.
• Accessible: Easily accessible by authorized users in the right format and time.
• Accurate: Error-free; inaccurate data input leads to inaccurate information output (garbage in, garbage out - GIGO).
• Complete: Contains all important facts.
• Economical: Cost-effective to produce; value should outweigh the cost.
• Flexible: Usable for various purposes.
• Relevant: Important to the decision-maker.
• Reliable: Can be trusted by users; depends on data-collection method and source reliability.
• Secure: Protected from unauthorized access.
• Simple: Not overly complex; too much information can cause overload.
• Timely: Delivered when needed.
• Verifiable: Can be checked for correctness.

Value of Information

• Directly linked to helping decision-makers achieve organizational goals.
• Valuable information helps people and organizations perform tasks more efficiently and effectively.

System Concepts

• System: Set of elements or components that interact to accomplish goals.
• Components of a system:
  • Inputs
  • Processing mechanisms
  • Outputs
  • Feedback

System Performance and Standards

• Efficiency: Measure of output produced divided by input consumed.
  \text{Efficiency} = \frac{\text{Output}}{\text{Input}}
• Effectiveness: Measure of the extent to which a system attains its goals.
• System performance standard: Specific objective of the system.

What is an Information System?

• An information system (IS) is a set of interrelated elements that:
  • Collect (input)
  • Manipulate (process)
  • Store
  • Disseminate (output) data and information
  • Provide a corrective reaction (feedback mechanism) to meet an objective

Information System Components

• Input: 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 used to make changes to input or processing activities.

Manual and Computerized Information Systems

• An information system can be manual or computerized.
• Example:
  • Investment analysts manually draw charts.
  • Computerized systems follow stock indexes and markets.

Computer-Based Information Systems

• A single set of hardware, software, databases, telecommunications, people, and procedures configured to collect, manipulate, store, and process data into information.
• Technology infrastructure: Includes all hardware, software, databases, telecommunications, people, and procedures.

Components of a Computer-Based Information System:

• Hardware
• Software
• Databases
• Telecommunications
• People
• Procedures

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.

Telecommunications, Networks, and the Internet

• Telecommunications: The electronic transmission of signals for communications.
• Networks: Connect computers and equipment to enable electronic communication.
• Internet: World’s largest computer network, consisting of thousands of interconnected networks, all freely exchanging information.

Intranet and Extranet

• 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 company’s intranet.

People

• The most important element in most computer-based information systems.

Procedures

• Include strategies, policies, methods, and rules for using the CBIS.

Business Information Systems

• Most common types are those designed for electronic and mobile commerce, transaction processing, management information, and decision support.
• Some organizations use special-purpose systems, such as virtual reality.

Electronic and Mobile 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
• Mobile commerce (m-commerce): The use of mobile, wireless devices to place orders and conduct business.
• Electronic business (e-business): Uses information systems and the Internet to perform all business-related tasks and functions.

Enterprise Systems: Transaction Processing Systems and Enterprise Resource Planning

• Transaction: Any business-related exchange, such as payments to employees and sales to customers.
• Transaction processing system (TPS): Organized collection of people, procedures, software, databases, and devices used to record completed business transactions.
• Enterprise resource planning: Set of integrated programs that manages the vital business operations for an entire multisite, global organization.
  • Most systems provide integrated software to support manufacturing and finance.

Information and Decision Support Systems

• Management information system (MIS): Organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision-makers.
• Decision support system (DSS): Organized collection of people, procedures, software, databases, and devices that support problem-specific decision-making. Used when the problem is complex and information is difficult to obtain.

Specialized Business Information Systems: Knowledge Management, Artificial Intelligence, Expert Systems, and Virtual Reality

• Knowledge management systems (KMSs): Organized collection of people, procedures, software, databases, and devices to create, store, share, and use the organization’s knowledge and experience.
• Artificial intelligence (AI): Computer system takes on characteristics of human intelligence.
• Expert systems: Give computers the ability to make suggestions and function like an expert in a particular field.
• Virtual reality: Simulation of a real or imagined environment that can be experienced visually in three dimensions.

Systems Development

• Systems development: The activity of creating or modifying existing business systems.
• Outsourcing: Allows a company to focus on what it does best and delegate other functions to companies with expertise in systems development.

Systems Development Steps

• Systems Investigation: Understand the problem.
• Systems Analysis: Understand solutions.
• Systems Design: Select and plan the best solution.
• Systems Implementation: Put the solution into effect.
• Systems Maintenance and Review: Evaluate results of the solution.

Systems Investigation and Analysis

• Goal of systems investigation: To gain a clear understanding of the problem to be solved or the opportunity to be addressed.
• Systems analysis: Defines the problems and opportunities of the existing system.

Systems Design, Implementation, and Maintenance and Review

• Systems design: Determines how the new system will work to meet business needs defined during systems analysis.
• Systems implementation: Acquiring various system components defined in the design step, assembling them, and putting the new system into operation.
• Systems maintenance and review: Checks and modifies the system so that it continues to meet changing business needs.

Information Systems in Society, Business, and Industry

• Information systems have been developed to meet the needs of all types of organizations and people.
• Speed and widespread use opens users to a variety of threats from unethical people.

Security, Privacy, and Ethical Issues in Information Systems and the Internet

• Drawbacks of information systems: Personal data can be lost or stolen.
• To protect against threats: Install security and control measures.
• Use of information systems: Raises work concerns, including job loss through increased efficiency.

Computer and Information Systems Literacy

• Computer literacy: Knowledge of computer systems and equipment and the ways they function.
• Information systems literacy: Knowledge of how data and information are used by individuals, groups, and organizations.

Information Systems in the Functional Areas of Business

• Finance and accounting
• Sales and marketing
• Manufacturing
• Human resource management
• Legal information systems

Information Systems in Industry

• Airline industry
• Investment firms
• Banks
• Transportation industry
• Publishing companies
• Healthcare maintenance organizations (HMOs)
• Retail companies
• Power management and utility companies
• Professional services
• Management consulting firms

Global Challenges in Information Systems

• Cultural challenges
• Language challenges
• Time and distance challenges
• Infrastructure challenges
• Currency challenges
• Product and service challenges
• Technology transfer issues
• State, regional, and national laws
• Trade agreements

Why Learn About Information Systems in Organizations?

• Information systems (ISs) can cut costs and increase profits.
• Students in most fields need to know ISs
  • Management major might be hired to design a system to improve productivity
  • Biochemistry major might be hired to conduct drug research using computer techniques

Organizations and Information Systems

• Organization: a formal collection of people and other resources established to accomplish a set of goals
• An organization is a system - has inputs, processing mechanisms, outputs, and feedback
  • Inputs to the system: resources such as materials, people, and money
  • Outputs to the environment: goods or services

Organizations and Information Systems (continued)

• Value chain: series (chain) of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service
• Upstream management: management of raw materials, inbound logistics, and warehouse and storage facilities
• Downstream management: management of finished product storage, outbound logistics, marketing and sales, and customer service

Organizational Structures

• Organizational structure: organizational subunits and the way they relate to the overall organization
• Categories of organizational structure
  • Traditional
  • Project
  • Team
  • Virtual

Traditional Organizational Structure

• A hierarchical structure
• Major department heads report to a president or top-level manager
• Managerial pyramid shows the hierarchy of decision making and authority

Project and Team Organizational Structures

• Project organizational structure: centered on major products or services
  • Many project teams are temporary
• Team organizational structure: centered on work teams or groups
  • Team can be temporary or permanent, depending on tasks

Virtual Organizational Structure and Collaborative Work

• Virtual organizational structure
  • Employs business units in geographically dispersed areas
  • People may never meet face to face
  • Allows collaborative work
• Managers and employees can effectively work in groups, even those composed of members from around the world

Organizational Culture and Change

• Organizational culture
  • Major understandings and assumptions
  • Influences information systems
• Organizational change
  • How organizations plan for, implement, and handle change

Reengineering and Continuous Improvement

• Reengineering
  • Process redesign
  • Radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results
• Continuous improvement
  • Constantly seeking ways to improve business processes
  • Benefits
    • Increased customer loyalty
    • Reduction in customer dissatisfaction
    • Reduced opportunity for competitive inroads

User Satisfaction and Technology Acceptance

• Technology acceptance model (TAM): describes factors that lead to higher levels of acceptance and usage of technology
• Technology diffusion: measure of how widely technology is spread throughout an organization
• Technology infusion: extent to which technology permeates a department

Quality

• Quality: ability of a product or service to meet or exceed customer expectations
• Techniques used to ensure quality
  • Total quality management
  • Six sigma

Outsourcing, On-Demand Computing, and Downsizing

• Outsourcing: contracting with outside professional services
• On-demand computing: contracting for computer resources to rapidly respond to an organization’s varying workflow
  • On-demand business
  • Utility computing
• Downsizing: reducing number of employees

Competitive Advantage

• Significant and (ideally) long-term benefit to a company over its competition
• Ability to establish and maintain competitive advantage is vital to the company’s success

Factors That Lead Firms to Seek Competitive Advantage

• Rivalry among existing competitors
• Threat of new entrants
• Threat of substitute products and services
• Bargaining power of customers and suppliers

Strategic Planning for Competitive Advantage

• Cost leadership
• Differentiation
• Niche strategy
• Altering the industry structure

Strategic Planning for Competitive Advantage (continued)

• Creating new products and services
• Improving existing product lines and service
• Other strategies
  • Growth in sales
  • First to market
  • Customizing products and services
  • Hiring the best people

Performance-Based Information Systems

• Consider both strategic advantage and costs
• Use productivity, return on investment (ROI), net present value, and other measures of performance

Productivity

• A measure of output achieved divided by input required
• Higher level of output for a given level of input means greater productivity

Return on Investment and the Value of Information Systems

• Earnings growth
• Market share
• Customer awareness and satisfaction
• Total cost of ownership

Risk

• Managers must consider risks of designing, developing, and implementing information systems
• Information system may be a failure
• Costs of development and implementation of a system can be greater than the returns from it

Careers in Information Systems

• Degree programs
  • Degrees in information systems
  • Business degrees with a global or international orientation
• Computer systems are making IS professionals’ work easier
• Opportunities in information systems are not confined to single countries

Roles, Functions, and Careers in the IS Department

• Primary responsibilities in information systems
  • Operations: focuses on the efficiency of IS functions
  • Systems development: focuses on specific development projects and ongoing maintenance and review
  • Support: provides user assistance, data administration, user training, and Web administration

Typical IS Titles and Functions

• Chief Information Officer (CIO)
  • Employs the IS department’s equipment and personnel to help the organization attain its goals
• LAN administrators
  • Set up and manage the network hardware, software, and security processes
• Internet careers
  • Internet strategists and administrators
  • Internet systems developers
  • Internet programmers
  • Internet or Web site operators
• Certification
  • Examples: Microsoft Certified Systems Engineer, Certified Information Systems Security Professional (CISSP), and Oracle Certified Professional
• Information security
• Privacy
• Cybersecurity
• Online fraud-fighting
• Video-game development
• Working from home
• Working for a consulting firm
• Working for a hardware or software vendor developing or selling products

Why Learn About Hardware?

• Can improve productivity, increase revenue, reduce costs, and provide better service
• Managers are expected to know about hardware
  • To help define business needs
  • To ask questions and evaluate options when buying equipment

Introduction

• Hardware: any machinery (most of which use digital circuits) that assists in the input, processing, storage, and output activities of an information system
• When making hardware decisions, businesses must consider how the hardware can support:
  • Objectives of the information system
  • Goals of the organization

Computer Systems: Integrating The Power of Technology

• Choosing the right computer hardware requires understanding its relationship to the information system and needs of the organization
• Hardware objectives are subordinate to, but supportive of, the information system and the current and future needs of the organization

Hardware Components

• Central processing unit (CPU)
• Input devices
• Output devices
• Communications devices
• Primary storage devices
• Secondary storage devices

Hardware Components

• Central processing unit (CPU)
  • Arithmetic/logic unit, the control unit, and the register areas
• Arithmetic/logic unit (ALU)
  • Performs mathematical calculations and makes logical comparisons

Hardware Components (continued)

• Control unit
  • Sequentially accesses program instructions, decodes them, and coordinates the flow of data in and out of the ALU, registers, primary storage, and even secondary storage and various output devices
• Registers
  • High-speed storage areas
• Primary storage
  • Closely associated with the CPU

Hardware Components in Action

• Step 1: Fetch instruction
• Step 2: Decode instruction
• Step 3: Execute instruction
• Step 4: Store results

Processing and Memory Devices: Power, Speed, and Capacity

• System unit
  • Houses the components responsible for processing (the CPU and memory)
• All other computer system devices are linked either directly or indirectly into the system unit housing

Processing Characteristics and Functions

• Machine cycle time is measured in:
  • Nanoseconds (1 billionth of a second)
  • Picoseconds (1 trillionth of a second)
  • MIPS (millions of instructions per second)

Processing Characteristics and Functions (continued)

• Clock speed: series of electronic pulses produced at a predetermined rate that affects machine cycle time
  • Often measured in:
    • Megahertz (MHz): millions of cycles per second
    • Gigahertz (GHz): billions of cycles per second
• Microcode: predefined, elementary circuits and logical operations that the processor performs when it executes an instruction

Physical Characteristics of the CPU

• Digital circuits on chips
• Electrical current flows through silicon
• Moore’s Law: transistor density of chips will double every 18 months

Memory Characteristics and Functions

• Main memory
  • Located physically close to the CPU, but not on the CPU chip itself
  • Rapidly provides data and instructions to the CPU
• Storage Capacity
  • Eight bits together form a byte (B)

Types of Memory

• Random access memory (RAM)
  • Temporary and volatile
• Types of RAM
  • EDO (Extended Data Out)
  • DRAM (Dynamic RAM)
  • SDRAM (Synchronous DRAM)

Types of Memory (continued)

• Types of nonvolatile memory
  • ROM (read-only memory)
  • PROM (programmable read-only memory)
  • EPROM (erasable programmable read-only memory)
• Cache memory: high-speed memory that a processor can access more rapidly than main memory

Multiprocessing

• Multiprocessing: simultaneous execution of two or more instructions at the same time
• Multiprocessing using coprocessors
  • Coprocessor: speeds processing by executing specific types of instructions while the CPU works on another processing activity
• Multicore microprocessor
  • Combines two or more independent processors into a single computer

Parallel Computing

• Parallel computing: simultaneous execution of the same task on multiple processors to obtain results faster
• Massively parallel processing:
  • Speeds processing by linking hundreds or thousands of processors to operate at the same time, or in parallel
  • Each processor has its own bus, memory, disks, copy of the operating system, and applications

Parallel Computing (continued)

• Different approaches to achieving parallel computing
  • Single instruction/multiple data (SIMD) parallel processors
  • Multiple instruction/multiple data (MIMD) parallel processors
• Grid computing: use of a collection of computers, often owned by multiple individuals or organizations, to work in a coordinated manner to solve a common problem

Parallel Computing (continued)

• Cloud computing
  • Uses giant cluster of computers, that serves as a host, to run applications that require high-performance computing
  • Supports a wider variety of applications than grid computing
  • Pools computing resources so they can be managed primarily by software rather than people

Secondary Storage

• Compared with memory, offers the advantages of nonvolatility, greater capacity, and greater economy
• Access methods, storage capacities, and portability required are determined by the information system’s objectives

Access Methods

• Sequential access: records must be retrieved in order
  • Devices used are called sequential access storage devices (SASDs)
• Direct access: records can be retrieved in any order
  • Devices used are called direct access storage devices (DASDs)

Devices

• Magnetic tapes
• Magnetic disks
• RAID (Redundant Array of Inexpensive Disk)
• Virtual tape
• Optical disks
• Digital video disk (DVD)
• Holographic versatile disc (HVD)
• Memory cards
• Flash memory

Enterprise Storage Options

• Attached storage
• Network-attached storage (NAS)
• Storage area network (SAN)

Input and Output Devices: The Gateway to Computer Systems

• Through input and output devices, people provide data and instructions to the computer and receive results from it
• Selection of input and output devices depends on organizational goals and IS objectives

Characteristics and Functionality

• Data can be human-readable or machine-readable
• Data entry: converts human-readable data into machine-readable form
• Data input: transfers machine-readable data into the system
• Source data automation: capturing and editing data where the data is initially created and in a form that can be directly input to a computer