Module 1

Information Systems in
Organizations and Society

Why Learn About IS in Organizations

IS are used in almost every profession and
company
Helps organization
Become efficient, effective, productive and competitive
Produce higher quality products and increase their ROI
(Return of Investment)

Each of you will almost certainly work with

computers and IS no matter what career path you
choose
Accounting major
Marketing major
Oil and gas major etc.

Introduction to Information Systems

(IS)
Information is power
People and organizations use information
everyday
IS = A set of interrelated components that
collect (input), manipulate(process), store and
disseminate (output) data and information and
provide a feedback mechanism (corrective
reaction) to meet an objective
We interact with IS everyday
Banking using automated teller machines
Check in for a flight using a kiosk

Information Concepts
Information is one of an organizations most
valuable resources
Data = Raw facts; e.g. Employee Number
Information = A collection of (raw) facts
organized and processed for additional value
Where the data comes from or how it is
processed is less important than whether the
data transformed into results that are accurate,
complete, useful or valuable
Ref Table 1.2 on page 8 Characteristics of
Valuable Information

System Concepts
System = A set of elements or components that
interact to accomplish goals
Its 4 components with automatic car wash example

Input (dirty car, water, skill)

processing (selecting cleaning options)
output (clean car) and
feedback (how clean the car is)

System performance can be measured in various ways

Efficiency = a measure of what is produced/what is
consumed
Effectiveness = a measure of the extent to which a system
achieves its goals
Divide the goals actually achieved/the total of the stated goals

What is an Information System?

IS has
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)
with
Feedback (output that is used to make changes
to input or processing activities)
Think of a weather forecasting system

Business Information Systems

Primarily designed for

electronic (B2B) and mobile (m) commerce,

electronic business (IS and the Internet),
transaction processing,
management information system and
decision support system

Additionally, specialized BIS may include

Artificial Intelligence,
Expert Systems,
Virtual Reality etc.

Organizations and Information

Systems
Organization = A collection of people and
other resources established to accomplish a
set of goals
Reengineering = Process Redesign
Redesign of business process, org structures, IS and
values of the organization to achieve a
breakthrough in business results

Continuous Improvement
Constantly seeking ways to improve business
processes to add value to products and services

Ref Table 1.4, page 29 Comparing BPR to CI

Competitive Advantage
Organizations effectively use IT to improve their
business and achieve competitive advantage
Presidents Choice Financial developed online, nofee24 hour banking and increased customer service
using IT

Factors that lead Organizations to seek

competitive advantage

Rivalry among existing competitors

Threat of new entrants
Threat of substitute products and services
The bargaining power of buyers and suppliers

Competitive Advantage
Strategic planning for Competitive
Advantage

Cost leadership (Wal-Mart)

Differentiation (Car Companies)
Niche strategy (Rolex watches)
Altering the industry structure (Porter Airline)
Creating new products and services
Improving existing product lines and services
Other strategies e.g. being first to market, hire
the best people

Performance-based Information
Systems
3 stages in the business use of IS
Stage 1 Cost reduction and productivity
Stage 2 Competitive advantage
Stage 3 Performance-based management

A number of organizations are shifting from

Strategic management to performancebased management
Strategic advantage, increased benefits/revenue,
reduced costs, return on investment (ROI) etc.
are the key measures relied upon

Systems Development
Activity of creating or modifying Information
Systems to meet the changing business needs
Investigation understand the problem or
opportunity to be addressed
Analysis understand solutions
Design select and plan best solution
Implementation place designed solution into
effect
Maintenance and Review evaluate results of
solution

Global Challenges in Information

Systems
Globalization has significant impact on
organizations and their Information Systems.

Cultural challenges
Language challenges
Time and distance challenges
Infrastructure challenges
Currency challenges
Product and service challenges
Technology transfer challenges
Local, regional and national laws
Trade agreements etc.

The Personal and Social Impact of

Computers
Computers (=IS) have become very
valuable tools in almost everything we do.
Yet, the information age has also brought
the following potential problems for
workers, companies and society in general

Computer waste and mistakes

Computer crime
Privacy issues
Work environment problems
Ethical issues

Computer Waste and Mistakes

Major causes of computer problems resulting
in high costs and lost profits
Waste = inappropriate use / management of
computer technology and resources
Workers using computers inappropriately at work
Poorly designed complex systems never used to their
fullest extent
Gun registry system; health records system

Mistakes = errors, failures and other problems

that make computer output incorrect or not useful
Primarily human error related
Incorrect data entry; error in computer programs

Preventing Computer-Related Waste

and Mistakes
Establishing policies and procedures
Efficient acquisition, use and disposal of systems
and devices

Implementing policies and procedures

Minimize waste and mistakes

Monitoring policies and procedures

Monitor routine practices and take corrective
action as necessary

Reviewing policies and procedures

On a regular basis to determine its usefulness and
adaquacy

Computer Crime
Global issue
Computer can be both the tool used to
commit a crime and the object of that
crime
The top categories of computer crime

Undelivered merchandise or non-payment

Identity theft
Credit card fraud
Auction fraud

The Computer as a Tool to Commit

Crime
In most cases, criminals gain access to the computer
system and manipulate the system to produce the desired
result
Social engineering
Computer password is talked out of a person

Identity theft
Imposter obtains key pieces of information such as SIN or bank
account number to impersonate someone else

Dumpster diving
Going through the garbage for important pieces of information
needed to access IS or its data

Cyber terrorism
Launching computer based attack computers, networks and
information stored on them

The Computer as a Tool to Fight

Crime
The computer is also used as a tool to
fight computer crime
Help recover stolen property, monitor sex
offenders, gun registry, use of Geographical
Information Systems (GIS)

The Computer as the Object of

Crime
Each time system access is illegally obtained, data or
computer equipment is stolen or destroyed, or
software is illegally copied, the computer becomes the
object of a crime
Ref Table 2.1 Common methods used to commit
computer crimes, page 60
Hacker
a person who enjoys computer technology and spends time
learning and using computer systems

Cracker (Criminal Hacker)

A techie who attempts to gain unauthorized or illegal access
to computer systems to steal passwords, corrupt
files/programs

Preventing Computer-Related Crime

Government and corporations emphasize
on prevention and detection of computer
crime with better system controls. For
example,
Install strong user authentication and
encryption capabilities on the corporate
firewall
Install the latest security patches
Turn audit trails on
Conduct regular IS security audits etc.

Preventing Computer-Related Crime

Crime prevention for Corporations

Use Intrusion Detection Software (IDS)

Use Security Dashboard
Use Managed Security Service Providers
Guard against theft of equipment and data

Crime prevention for Individuals and

Employees

Identify theft
Malware attacks
Computer scams
Theft of equipment and data

Privacy Issues
With IS, privacy deals with the collection and use or misuse of data
who owns this information and knowledge?
Platform for Privacy Preferences (P3P)
Potential solution to some consumer privacy concerns

Fairness in Information Use

The Privacy Act and Access to Information Act

Personal Information Protection and Electronic Documents Act (PIPEDA)
Electronic Commerce Protection Act (ECPA)
Corporate Privacy Policies

Individual efforts to protect privacy

Check your credit report

Dont share your personal information unless absolutely necessary
Be proactive to protect your privacy
Take extra care when transacting online

The Work Environment

Health concerns

Poorly designed work environment

Carpal tunnel syndrome
Seated immobility thromboembolism
Repetitive stress injury

Ergonomics
The science of designing machines, products
and systems to maximize the safety, comfort
and efficiency of the people who use them
Slope of the keyboard
Placement of computer table and chairs etc.

Ethical Issues in Information

Systems
Ethical issues deal with what is generally
considered right or wrong
Code of Ethics = a code that states the principles
and core values that are essential to a set of people
and govern their behavior; becomes a reference
point for weighing what is legal and what is ethical
When faced with an ethical issue, it is important to
identify the facts and the stakeholders and clearly
define the conflict or dilemma
Just because an activity is defined as legal, it does
not mean that it is ethical