FOUNDATIONS OF INFORMATION SYSTEMS IN BUSINESS

The Real World of Information Systems Real World Case: eCourier, Cablecom, and Bryan Cave: Delivering Value Through Business Intelligence The Fundamental Roles of IS in Business Trends in Information Systems The Role of e-Business in Business Types of Information Systems Managerial Challenges of Information Technology Section II Foundation Concepts: The Components of Information Systems System Concepts: A Foundation Real World Case: The New York Times and Boston Scientific: Two Different Ways of Innovating with Information Technology Components of Information Systems Information System Resources Information System Activities Recognizing Information Systems Real World Case: Sew What? Inc.: The Role of Information Technology in Small Business Success Real World Case: JetBlue and the Veterans Administration: The Critical Importance of IT Processes Learning Objectives 1. Understand the concept of a system and how it relates to information systems. 2. Explain why knowledge of information systems is important for business professionals, and identify five areas of information systems knowledge that they need. 3. Give examples to illustrate how the business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage. 4. Provide examples of several major types of infor- mation systems from your experiences with busi- ness organizations in the real world. 5. Identify several challenges that a business man- ager might face in managing the successful and ethical development and use of information tech- nology in a business. 6. Provide examples of the components of real world information systems. Illustrate that in an informa- tion system, people use hardware, software, data, and networks as resources to perform input, pro- cessing, output, storage, and control activities that transform data resources into information products. 7. Demonstrate familiarity with the myriad of career opportunities in information systems. 3 CHAPTER 1 FOUNDATIONS OF INFORMATION SYSTEMS IN BUSINESS 4 ● Module I / Foundation Concepts SECTION I Foundation Concepts: Information Systems in Business The question of why we need to study information systems and information technology has evolved into a moot issue. Information systems have become as integrated into our daily business activities as accounting, finance, operations management, marketing, hu- man resource management, or any other major business function. Information systems and technologies are vital components of successful businesses and organizations—some would say they are business imperatives. They thus constitute an essential field of study in business administration and management, which is why most business majors include a course in information systems. Since you probably intend to be a manager, entrepre- neur, or business professional, it is just as important to have a basic understanding of information systems as it is to understand any other functional area in business. I nformation technologies, including Internet-based information systems, are play- ing vital and expanding roles in business. Information technology can help all kinds of businesses improve the efficiency and effectiveness of their business processes, mana- gerial decision making, and workgroup collaboration, which strengthens their com- petitive positions in rapidly changing marketplaces. This benefit occurs irrespective of whether the information technology is used to support product development teams, customer support processes, e-commerce transactions, or any other business activity. Information technologies and systems are, quite simply, an essential ingredient for business success in today’s dynamic global environment. L et’s take a moment to bring the real world into our discussion of the importance of information systems (IS) and information technology (IT). See Figure 1.1 , and read the Real World Case about using information technology to better understand and satisfy customer needs. I f we are to understand information systems and their functions, we first need to be clear on the concept of a system. In its simplest form, a system is a set of interre- lated components, with a clearly defined boundary, working together to achieve a common set of objectives. Using this definition, it becomes easy to see that virtually everything you can think of is a system, and one system can be made up of other sys- tems or be part of a bigger system. We will expand on this concept later in the next section, but for now, this definition gives us a good foundation for understanding the focus of this textbook: information systems. W e begin with a simple definition that we can expand upon later in the chapter. An information system (IS) can be any organized combination of people, hardware, soft- ware, communications networks, data resources, and policies and procedures that stores, retrieves, transforms, and disseminates information in an organization. People rely on modern information systems to communicate with one another using a variety of physical devices (hardware) , information processing instructions and procedures (software) , communications channels (networks) , and stored data (data resources) . Al- though today’s information systems are typically thought of as having something to do with computers, we have been using information systems since the dawn of civiliza- tion. Even today we make regular use of information systems that have nothing to do with a computer. Consider some of the following examples of information systems: • Smoke signals for communication were used as early as recorded history and can account for the human discovery of fire. The pattern of smoke transmitted valuable information to others who were too far to see or hear the sender. • Card catalogs in a library are designed to store data about the books in an orga- nized manner that allows readers to locate a particular book by its title, author name, subject, or a variety of other approaches.