Information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization.
Information vs. Data
○ Data are streams of raw facts
○ Info is data shaped into meaningful form
Three activities of info systems
Input: converts raw data form organization or external environment
Processing, Arrange, Classify, Calculate: converts raw data into meaningful form
Output: transfers processed info to people or activities that use it
Feedback from Output is returned to appropriate members of organization to help evaluate or correct input stage
Computer/computer program vs. info system à computers and software are technical foundation and tools of info system, similar to the materials and tools used to build a house
Dimension of Info Systems
Hierarchy of authority, responsibility
Senior management , Middle management , Operational management, Knowledge workers, Data workers, Production or service workers
Separation of business functions
Sales and marketing, human resources, Finance and accounting, Manufacturing and production
Unique business processes
Unique business culture
Expectations of employees
Managers set organizational strategy for responding to business challenges
In addition, managers must act creatively
Creation of new products and services
Occasionally re-creating the organization
Computer hardware is the physical equipment used for input, processing, and output activities in an information system. It consists of the following: computers of various sizes and shapes (including mobile handheld devices); various input, output, and storage devices; and telecommunications devices that link computers together.
Computer software consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system.
Data management technology consists of the software governing the orga-nization of data on physical storage media.
Networking and telecommunications technology, consisting of both physical devices and software, links the various pieces of hardware and transfers data from one physical location to another. Computers and communications equipment can be connected in networks for sharing voice, data, images,sound, and video. A network links two or more computers to share data or resources, such as a printer.
The world’s largest and most widely used network is the Internet. The Internet is a global “network of networks” that uses universal standards to connect millions of networks in around the world.
Internal corporate networks based on Internet technology are called intranets.
Private intranets extended to authorized users outside the organization are called extranets, and firms use such networks to coordinate their activities with other firms for making purchases, collaborating on design, and other inter-organizational work.
World Wide Web is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format on the Internet.
All of these technologies, along with the people required to run and manage them, represent resources that can be shared throughout the organization and constitute the firm’s information technology (IT) infrastructure. The IT infrastructure provides the foundation, or platform, on which the firm can build its specific information systems.
The Link Between Information Systems and Corporate Strategy
Info system is instrument for creating value
Today, most firms will need to significantly invest in information technology in order to achieve their business objectives, as there is a growing interdependence between using IT and achieving corporate goals. Firms need to invest heavily in information systems to achieve six strategic business objectives, specifically:
Operational excellence à Greater efficiency and productivity allow firms to attain higher levels of profitability.
New products, services, and business modelsà Information systems and technology are major enabling tools for new products, services, business models. Just think of Netflix, Google Maps, Skype or even driverless cars.
Customer and supplier intimacyà Information systems allow firms to get closer to their customers and suppliers. Serving customers well leads to returning customers, which raises revenues and profits. Intimacy with suppliers allows them to provide vital inputs, which lowers costs.
Improved decision makingà Without accurate information, managers must depend on forecasts or in the worst case on guesswork. Working like this often results in overproduction, underproduction, misallocation of resources and poor response times. These are all poor outcomes which can raise the cost of doing business and cause customers to take their business elsewhere.
Competitive advantageà Information systems can help businesses perform more effectively, thereby keeping their prices low and causing customers to be charged less for good or better products. Companies can also respond to customers and suppliers inquiries and concerns more quickly.
Survivalà As industries become more automated, information technology has become a necessity to businesses for survival. Do you know of a bank that does not use ATMs?
Business perspective on Info systems – helps make better decision, adds value, decrease costs. Info systems call attention to organizational and managerial nature of info systems. Awareness of the organizational and managerial dimensions of information systems can help us understand why some firms achieve better results from their information systems than others. The answer lies in the concept of complementary assets. Information technology investments alone cannot make organizations and managers more effective unless they are accompanied by supportive values, structures, and behavior patterns in the organization and other complementary assets.
Complementary assets are those assets required to derive value from a primary investment.
Approaches to Information Systems
Technical - emphasizes mathematically based models to study information systems as well as the physical technology and formal capabilities of these systems.
The disciplines that contribute to the technical approach are computer science, management science, and operations research.
Behavioral - arises in the development and long-term maintenance of information systems. Deals w/ issues such as strategic business integration, design, implementation, utilization, and management.
The disciplines that contribute to the behavioral approach are economics, sociology, and psychology.
MODULE 2 – Global E-Business & Collaboration (Ch.2)
Refer to the manner in which work is organized, coordinated, and focused to produce a valuable product or service. Business processes are the collection of activities (routine tasks) required to produce a product or service.
These activities are supported by flows of material, information, and knowledge among the participants in business processes.
Company’s business processes can be a source of competitive strength if they enable the company to innovate or to execute better than its rivals.
Business processes can also be liabilities if they are based on inefficient ways of working that impede organizational responsiveness and efficiency.
Some example business processes are: assembling a product, identifying customers, creating financial statements, and hiring employees.
Some processes are wholly tied to one department (e.g. creating financial statements are only related to accounting department) or may crisscross several departments (eg. Fulfilling an order may go from production to sales department).
Decision making and problem solving occur at each organizational level and it is important for the IS professional to understand the types of decisions that different people make in a firm and why.
Granularity refers to the extent of detail in the information (e.g., fine and detailed, or "coarse" and abstract information). As we move up through the organizational hierarchy, people (typically managers) deal less with the details ("finer" information) and more with meaningful aggregations of information ("coarser" information) that help them make broader decisions for the organization.
How info tech improves business processes?
Increases efficiency of existing processes by automating steps that were manual
Support entirely new business models. Downloading a Kindle e-book from Amazon, buying a computer online at Best Buy are entirely new business processes based on new business models that would be inconceivable without today’s information technology.
Changes flow of information
Replaces sequential steps with parallel steps – saves time
Eliminates delays in decision making
How do systems serve the different management groups in a business?
A business firm has systems to support different groups or levels of management.
Transaction processing systems (TPS): serves operational managers and staff, perform and records daily routine transactions necessary to conduct business, allows managers to monitor status of operations and relations with external environment, serves predefined, structured goals and decision making. Example would be a system that records all transactions from the cash registers at a typical grocery store.
Management Information System (MIS): takes data captured by the TPS, summarizes or filters it to produce standard reports to help managers and supervisors manage their departments and the work done by their subordinates. A MIS is also capable of producing exception reports and doing ad hoc queries on the data, but typically does not have many analytical capabilities beyond that.
Decision Support System (DSS): It uses data from the MIS and occasionally from external sources in conjunction with statistical (data-driven DSS), mathematical (model-driven DSS), or artificial intelligence (knowledge-driven DSS) tools to provide solutions and alternatives that can support higher level decision making by managers. Data-driven DSSes typically consolidate, analyze, and provide access to vast amounts of data. These functionalities are often referred to as business intelligence, which include software for database queries and reporting, Online Analytical Processing (OLAP) and data-mining facilities.
OLAP enables rapid, online answers to ad hoc queries and supports multidimensional data analysis, that is, it allows data to be viewed from many points of view or dimensions
Systems for business intelligence: data and software tools for organizing and analyzing data. Used to help managers and user make improved decisions
Executive Information Systems (EIS) or Executive Support Systems (ESS) were developed to support senior management. Executives need to make quick and insightful decisions as things come up that could have an impact on the company. They often need to make non-routine decisions requiring judgment, evaluation, and insight. ESSes incorporate data about external events (e.g., new tax laws or competitors) as well as summarized information from internal MISes and DSSes. ESSes pull data from diverse internal and external sources like the Dow Jones Index or the Standard and Poor's (S&P) Index and make them available to executives in an easy-to-use form
How Information Systems Can Be Used to Link the Entire Organization?
One department often feeds into another and may be dependent on information and resources which are processed from other areas. Whereas TPS, MIS, DSS and EIS serve specific people at different levels of the organizational "food chain", there are some systems that need to be used by everyone in the organization. These systems are called enterprise applications and they seek to link the different areas in the enterprise. Enterprise applications can be four distinct types:
Enterprise Resource Planning Systems (ERP systems) à suite of integrated software modules which use a common central database to collect data from many divisions and departments in a firm and from a large number of business processes.
Customer Relationship Management Systems (CRM systems) à involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention in order to maintain the organization's profitability.
Supply Chain Management Systems (SCM systems) à process of coordinating and optimizing the flow of all products or services, information and finances among all players in the supply chain. SCM systems allow firms to manage their relationships with suppliers.
Knowledge Management Systems or KMS à tacit or implicit knowledge which is the knowledge that resides in people's heads and is hard to codify, and explicit knowledge that resides in tangible platforms such as books, databases, weblogs, and so on. Knowledge management is about getting people to share what they have in their heads and putting it into a form that could be shared with others. In other words, Knowledge Management (KM) is about making tacit knowledge (i.e., expertise) more explicit.
MODULE 3 – Ethical & Social Issues in Information Systems
Ethics are principles of right and wrong that individuals, acting as free moral agents, use to make choices to guide their behavior. Ethical behavior requires:
Responsibility: Accepting potential costs, duties, and obligations for your decisions.
Accountability: Determining who should take responsibility for decisions and actions.
Ethics is easily managed in small groups because the group itself tends to control the individual’s behavior. It's referred to as “self-policing. The larger the group, the harder it is to manage the actions of individuals. Hence societies make laws to identify what is right and wrong and what is expected of its citizens. This expands the boundary of ethics by defining the concepts of:
Liability: Legally placing responsibility with a person or group, and
Due Process: Ensuring the laws are applied fairly and correctly.
The ethical principles listed in the textbook are deeply rooted in cultures around the world:
Do unto others as you would have them do unto you.
If an action is not right for everyone, perhaps it's not right for anyone.
If an action cannot be taken repeatedly, it is not right to take at all.
Take the action that achieves the higher or greater value.
Take the action that produces the least harm or the least potential cost.
Assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise.
Privacy is the right to be left alone, to have control over your own personal information and possessions, and not to be observed by others without your consent.
Confidentiality is the assurance that messages and information are available only to those who are authorized to view them. Like they do with many rights of individuals, governments try to protect privacy through legislation.
Europe has the strongest privacy legislation. At the other end of the spectrum is the United States, where information privacy is not highly legislated or regulated. Canada's privacy legislation closely resembles that of Europe. The federal privacy act (PIPEDA – the Personal Information Protection and Electronic Documents Act) was implemented in 2004. It is enshrined in Canada's Charter of Rights and Freedoms.
Intellectual Property (IP) à is defined as intangible property of any kind (such as a piece of art, music or writing) that is created by individuals or a corporation. Ethical behavior requires the identification and protection of intellectual property. Intellectual property can be protected in three ways:
Through the use of trade secrets which relate to intellectual work or products that belong to businesses, but which are not in the public domain
Through the use of copyrights which are statutory grants protecting one’s intellectual property from being copied during one’s lifetime plus 70 years
Through patents which grants the creator of an invention an exclusive monopoly on the ideas behind the invention for some 20 years.
ETHICAL CONCERNS THAT INFORMATION SYSTEMS RAISE
Information systems raise new ethical questions because they create opportunities for intense social change, wealth, crime, power and influence. The social, ethical, and political issues raised by technology must be dealt with on the individual, social, and political levels.
***SEE MODULE FOR LIST COMPANIES WHO HAD INFORMATION SYSTEMS ETHICAL ISSUES***
Key Technology Trends that Raise Ethical Issues and their Impact
Computing power doubles every 18 months à more companies depend on computer systems for critical operations & become vulnerable to computer failures
Data storage costs rapidly decline à easily maintain databases; no limit on data collected
Data analysis advances à easily analyze vast quantities of data to develop detailed profiles; large-scale pop’n surveillance is enabled
Networking advances à costs of moving data/ accessibility declines but access to data becomes difficult to control
Mobile device growth impact -> mobiles tracked w/o consent. The always on-device becomes a tether.
The digital nature of information makes it easy to copy (music), thereby infringing on the property rights of other individuals
Most information systems individuals and organizations use these days depend on the internet infrastructure. Most web pages people use for doing business transactions use simple software called “cookies,” which identify the browsers that are used to access the site, and track visits to that site. The idea behind these cookies is to save frequent visitors or those who go from page to page within a site from having to enter the same information over and over. However; such information about users may also be used for purposes such as behavioral targeting (trying to approach individuals with certain offerings based on their recorded online behavior) that jeopardizes user privacy.
A similar dilemma exists about software called “web beacons” used for identifying individuals for targeted advertising, which is supposed to be convenient for customers and effective for businesses. Likewise, people’s search behavior on services like Google or Amazon can be used for targeting people with individualized campaigns, which is a threat to privacy. To partially avoid this, a good practice is the opt-out vs. opt-in model, where opt-out allows collection of personal information unless the consumer requests otherwise, while opt-in requires the consumer to take action to approve collection and use of personal information.
BIG DATA - The Internet, along with mobile devices, sensors, social media networks, etc. has led to the era of big data where larger volumes of data in various forms (e.g., numeric, text, video, etc.) is produced today at a rate thousands of times higher than what was possible even a decade ago. Big data by itself would be of limited use if not for the advances in techniques that can process and analyze such data, i.e., analytics. They help us by saving our time when they recommend us products or services we would probably prefer or when they route us through less trafficked highways or when they help us with treatment options better suited to our genetic make-up. However, there is also a dark side to big data and analytics. For example, businesses like Progressive and Deloitte Consulting LLP use predictive modeling to identify individual customers that fit certain risk or vulnerability profiles. At a larger scale, organizations use nonobvious relationship awareness (NORA), which combine data from multiple sources to find obscure hidden connections that might help identify potential criminal behaviour. However, such profiling can also lead to false alarms, and have serious consequences for individuals, at least by depriving them of opportunities that they would otherwise have.
Five Moral Dimensions of the Information Age
Information rights and obligations
Property rights and obligations
Accountability and control
Quality of life
Identify and clearly describe the facts
Define the conflict or dilemma and identify the higher-order values involved
Identify the stakeholders
Identify the options that you can reasonably take
Identify the potential consequences of your options
Candidate Ethical Principles
Descartes’ rule of change à If an action cannot be taken repeatedly, it is not right to take at all
Utilitarian Principle à Take the action that achieves the higher or greater value
Risk aversion principle à Take the action that produces the least harm or potential cost
Ethical “No Free Lunch” Rule àAssume that virtually all tangible and intangible objects are owned by someone unless there is a specific declaration otherwise
READ TEXTBOOK FOR MORE INFO ON THIS CHAPTER
MODULE 4 – Case Discussions
IT Infrastructure and Emerging Technologies
Defining IT Infrastructure
Set of physical devices and software required to operate an enterprise
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