1

Introduction to Information Systems

Essentials for the Internetworked E-Business Enterprise

Eleventh Edition

James A. O’Brien

Chapter
1
Foundations
of Information Systems
in Business
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 James A. O’Brien Introduction to Information Systems Eleventh Edition 2

Chapter Objectives
• Explain why knowledge of information
systems is important for business
professionals and identify five areas of
information systems knowledge they
need.
• Give examples to illustrate how
electronic business, electronic
commerce, or enterprise collaboration
systems could support a firm’s business
processes, managerial decision making,
and strategies for competitive advantage.
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 James A. O’Brien Introduction to Information Systems Eleventh Edition 3

Chapter Objectives
• Provide examples of the components of
real world information systems. Illustrate
that in an information system, people use
hardware, software, data, and networks
as resources to perform input,
processing, output, storage, and control
activities that transform data resources
into information products.

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 4

Chapter Objectives
• Provide examples of several major types
of information systems from your
experiences with business organizations
in the real world.
• Identify several challenges that a
business manager might face in
managing the successful and ethical
development and use of information
technology in a business.

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 5

An IS Framework for Business Professionals

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 6

Components of an Information System

People

Softw
re

Information
a
Hardw

Systems

are
Resources

Ne
tw a
o rk a t
s D

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 7

What is an Information System?

Control
Controlof
ofSystem
System Performance
Performance

Input
Inputof
of Output
Outputof
of
Processing
Processing
Data
Data Information
Information
Data
Data
Resources
Resources Products
Products

Storage
Storageof
of Data
DataResources
Resources

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 8

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
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 James A. O’Brien Introduction to Information Systems Eleventh Edition 9

Components of an Information System

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 10

Data versus Information

Monthly Sales Report

for West Region

0 ann Sales Rep: Charles Mann

10 rles M
00 ha oe s Emp No. 79154
12 t C S h Item Qty Sold Price
s M
We 54 T TM Shoes 1200 $100
791

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 11

Attributes of Information Quality

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 12

Logical Data Elements

Name
Field

Payroll
Record

Payroll
File

Personnel
Database

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 13

Major Roles of Information Systems

Support
Strategies for
Competitive Advantage

Support
Business Decision Making

Support
Business Processes and Operations

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 14

History of the role of Information Systems

1950-1960 1960-1970 1970-1980 1980-1990 1990-2000

Data Management Decision Strategic & Electronic

Processing Reporting Support End User Commerce

Electronic
Data Management
Processing Information
- TPS Decision
Systems
Support
Systems End User
- Ad hoc Computing
Reports Exec Info Sys Electronic
Expert Systems Business &
SIS Commerce
-Internetworked
E-Business &
Commerce

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 15

The e-Business Enterprise

The Internet
Suppliers and Other Business Partners Company
Boundary
Supply Chain Management
Procurement, Distribution, and Logistics
Extranets

Manufacturing
Engineering & Accounting,
and
Research and Finance
Production

Intranets
Customer Relationship Management
Marketing Sales Customer Service

Extranets

Consumer and Business Customers

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 16

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

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 17

Other Categories of Information Systems

Expert
ExpertSystems
Systems

Knowledge
KnowledgeManagement
ManagementSystems
Systems

Functional
FunctionalBusiness
BusinessSystems
Systems

Strategic
StrategicInformation
InformationSystems
Systems

Cross-Functional
Cross-FunctionalInformation
InformationSystems
Systems

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 18

The Information Systems Development Process

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 19

Management Challenges of the E-business Enterprise

•Business Strategies
•Business Processes
•IS Human Resources •Business Needs
•IS Development

•Customer Relationships
•Business Partners
•IT Infrastructure
•Suppliers
•IS Performance
•Business Customers

•Organization Structure Ethical Considerations

•and Culture Potential Risks?
•User Acceptance Potential Laws?
Possible Responses?

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 20

Chapter Summary
• Information Systems play a vital role in the
efficient and effective operations of E-business,
E-commerce and enterprise collaboration.
• The business professional must know:
– Foundations (fundamentals) of IS
– Information Technologies
– Business Applications
– Development Processes; and
– Managerial Challenges

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 21

Chapter Summary (cont)

• A system is a group of interrelated components
working toward the attainment of a common
goal by accepting inputs and producing
outputs in an organized transformation
process.
• An information system uses the resources of
people, hardware, software, data, and networks
to perform input, processing, output, storage
and control activities.

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 22

Chapter Summary (cont)

• IS Resources:
– Hardware Resources
– Software Resources
– People Resources
– Data Resources
– Network Resources
• Products:
– Paper Reports
– Visual Displays
– Multimedia Documents
– Electronic Messages
– Graphics images
– Audio Responses

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 James A. O’Brien Introduction to Information Systems Eleventh Edition 23

Chapter Summary (cont)

• Information systems perform three vital roles in
business firms. They support:
– Business processes and operations,
– Business decision making; and
– Strategic competitive advantage
• Major application categories of information
systems include:
– Operations Support Systems; and
– Management Support Systems

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