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Material
http://unilanet.unila.ac.id/~muji
Why Do People Need Information?

Individuals - Entertainment and
enlightenment

Businesses - Decision making and
problem solving
Data: The raw materials in the production of
information (oz)
Data: Streams of raw facts representing events
such as business transactions (Laudon)

Information: (oz)
Data that have meaning
Data that have been manipulated
Information: Clusters of facts that are
meaningful and useful to human beings in the
processes such as making decisions (Laudon)
Data vs. Information
What Is an Information
System?
A set of interrelated components
that collect (or retrieve),
process, store, and distribute
information to support decision
making and control in an
organization (Laudon)

What Is an Information
System?

Figure 1-2
Data and Information
Computer-based ISs take data as raw
material, process it, and produce information
as output.
Input-process-output
Generating Information
Functions of an
Information System

Figure 1-3
Information in Context
Information must be relevant to
the problem
Partial information is often worse
than no information
Wrong information may lead to
disaster
The latest Information Available
The cost of obtaining Information
System: A set of components that work
together to achieve a common goal

Subsystem: One part of a system

Closed system: Stand-alone system that has
no contact with other systems

Open system: System that interfaces with
other systems
What Is a System?
Figure 1.3 Several subsystems make up this corporate accounting system.
Subsystem always open System
IT (Information Technology)
All technologies that collectively
facilitate construction and
maintenance of information system

Creates a framework for problem
solving and decision making.

Keeps managers focused on
overall goals and operations of
business.

Information and Managers
A Business Perspective
on Information Systems
An organizational and management
solution based on information
technology to a challenge posed by
the environment
An important instrument for creating
value for the organization
Stages in the business information
value chain add value to information
Business Processes

Information Processing Activities

Business Value

Management Activities

Supply

Chain

Management

Enterprise
Management
Customer
Management
Knowledge
Management
Data
Collection
and
Storage
Transformation
Into
Business
Systems
Dissemination
Planning Coordinating Controlling Modeling and

Decision Making
Firm
Profitability
and
Strategic
Position

Synergy
Occurs
when
combined
resources
produce
output that
exceeds the
sum of the
outputs of
the same
resources
employed
separately

The Benefits of
Human-Computer Synergy
Qualities of humans and computers that contribute to synergy
Components of an information system
In an organization, an
Information Systems consists of:

Data
Hardware
Software
Telecommunications
People
Procedures

Information Systems

ORGANIZATIONS
TECHNOLOGY
MANAGEMENT
INFORMATION
SYSTEMS
Activities in an
Information System
INPUT OUTPUT PROCESS
FEEDBACK
Input: Data are collected and entered into
computer.

Data processing: Data are manipulated
into information using mathematical, statistical,
and other tools.

Output: Information is displayed or presented.

Storage: Data and information are maintained
for later use.
The Four Stages of Data
Processing
Input
Data
processing
Output
Storage
Input-process-output-storage devices
Computer Equipment
for Information System
Input devices
introduce data into the
IS.
The computer
processes data through
the IS.
Output devices display
information.
Storage devices store
data and information.
Major Business
Functions
Sales and marketing

Manufacturing

Finance

Accounting

Human resources
Management
Levels:
Senior managers: make long-range strategic
decisions about products and services

Middle managers: Carry out the programs
and plans of senior management

Operational managers: monitor the firms
daily activities
Marketing
Finance Accounting
Human
Resources
Information
Systems
in Business
Manufacturing
Service
Retail
Government
ISs in
Different Business
Sectors
New
Businesses
CONTEMPORARY APPROACHES
TO INFORMATION SYSTEMS
Technical

Approaches

Behavioral
Approaches
Management

Science
Operations

Research

Sociology
Economics
Computer

Science

Psychology
Socio-Technical Systems
Optimize systems performance:

Technology and organization

Organizations mutually adjust to one
another until fit is satisfactory
Socio-technical Systems
SOURCE: Liker, et al, 1987
The Interdependence Between
Organizations and Information
Systems - Toward Digital Firm
The Widening Scope of
Information Systems
1950s: Technical changes

1960s-70s: Managerial controls

1980s-90s: Institutional core activities

Today: Digital information webs
extending beyond the enterprise
The Widening Scope of
Information Systems
Information Systems
From Recording Transactions
to Providing Expertise
Transaction Processing Systems (TPS)

Management Information Systems (MIS)

Types of MISs
Decision Support Systems (DSS)
Executive Information Systems (EIS)
Expert Systems (ES)
Geographic Information Systems (GISS)
Shared Data Resources
Most effective way to operate: different systems
share same data from same pool

Companys database: one of the most powerful
resources
E-Commerce
Business-to-business and business-
to-consumer transactions take place in
electronic form via computer networks.

Database management online makes
information cheaper to distribute.
The Internet
International network of networks

Universal technology platform: Any
computer can communicate with any
other computer

World Wide Web and Web sites
What You Can Do on the
Internet?
Communicate and collaborate

Access information

Participate in discussions

Supply information

Find entertainment

Exchange business transactions
New Options for
Organizational Design
Flattening organizations

Separating work from location

Reorganizing work-flows

Increasing flexibility

Redefining organizational boundaries
Flattening Organizations
& Information Systems

Redesigned Work Flow For
Insurance Underwriting

The Digital Firm
Electronic commerce

Electronic business

Digital market: Information systems
links, buyers and sellers to
exchange information, products,
services, payments
Electronic Commerce
Internet links buyers, sellers

Lower transaction costs

Goods and services advertised, bought,
exchanged worldwide

Business-to-business transactions
increasing

Customers

On-line marketing

On-line sales

Built-to-order products

Customer service

Sales force automation

Suppliers

Procurement

Supply chain management

Business partners

Joint design

Outsourcing

Remote offices and work groups

Communicate plans and policies

Group collaboration

Electronic communication

Scheduling

Factories

Just-in-time production

Continuous inventory

replenishment

Production planning

ELECTRONIC BUSINESS

Electronic Commerce

THE EMERGING DIGITAL FIRM

Electronic Business
Electronic Business: Executing all the
firms business processes with Internet
technology

Intranet: Business builds private, secure
network based on Internet technology

Extranet: Extension of intranet to
authorized external users
Information Architecture and
Information Technology
Infrastructure

THE END