BM - 1106

INTRODUCTION TO IT

Vishal Gupta, PMP

 Learning Objectives

• Understand the concept of a system

and how it relates to information
systems.
• Explain why knowledge of information
systems is important for business
professionals.
• How business applications of
information systems can support a
firm’s business processes, managerial
decision making, and strategies for
competitive advantage.
Types of Information Systems
 Data and Information
• The terms data & information are
often used interchangeably
• However, there is an important
distinction: information is value-
added data. Data is processed,
organized or transformed to become
information
• Data are raw facts, Information is
data shaped into meaningful form

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 Data and Information
• Age

• A grocery store - list of every item sold

today to be of little use – it is data.
However, the amount that the store’s total
sales are over or under planned sales
would be information.

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 Data and Information

Raw data from a supermarket checkout counter can be

processed and organized to produce meaningful information,
such as the total unit sales of dish detergent or the total sales
revenue from dish detergent for a specific store or sales
territory.
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 Information Technology
• Information itself has value.

• Computer-based information systems are

used to create, store, process and
distribute information.

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 What is a System?
• Interrelated components
• Defined boundary
• Working together
• Common objectives
• Accepting inputs and producing outputs
• Organized transformation process
 Defining a System
• A set of interrelated components that
collect, manipulate, and disseminate
data and information, and provide
feedback to meet an objective.

Examples: ATMs, airline reservation systems,

campus management systems.
• Basic Functions
– Input
– Processing
– Output
Perspectives on Information Systems

• Information system:
– Set of interrelated components
– Collect, process, store, and distribute
information
– Support decision making, coordination,
and control

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Perspectives on Information Systems

• Information system: Three activities

produce information organizations
need
– Input: Captures raw data from
organization or external environment
– Processing: Converts raw data into
meaningful form
– Output: Transfers processed information
to people or activities that use it

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 The Order Fulfillment Process

Fulfilling a customer order involves a complex set of

steps that requires the close coordination of the sales,
accounting, and manufacturing functions.
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A Business as a System
 Functions of an Information System

An information system contains information about an organization and its surrounding

environment. Three basic activities—input, processing, and output—produce the information
organizations need. Feedback is output returned to appropriate people or activities in the
organization to evaluate and refine the input. Environmental actors, such as customers, suppliers,
competitors, stockholders, and regulatory agencies, interact with the organization and its
information systems. 14
Perspectives on Information Systems

• Organizational dimension of information

systems
– Hierarchy of authority, responsibility
• Senior management
• Middle management
• Operational management
• Knowledge workers
• Data workers
• Production or service workers

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Levels in a Firm

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Types of Business Information Systems
• Transaction processing systems
– Perform and record daily routine transactions
necessary to conduct business
• Examples: sales order entry, payroll, shipping
– Allow managers to monitor status of operations
and relations with external environment
– Serve operational levels
– Serve predefined, structured goals and decision
making

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 Types of Business Information Systems

• Management information systems

– Serve middle management
– Provide reports on firm’s current performance,
based on data from TPS
– Provide answers to routine questions with
predefined procedure for answering them
– Typically have little analytic capability

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 Types of Business Information Systems

• Decision support systems

– Serve middle management
– Support non-routine decision making
• Example: What is impact on production schedule if
December sales doubled?
– Often use external information as well from TPS and
MIS
– Model driven DSS
– Data driven DSS

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How Management Information Systems Obtain
Their Data from the Organization’s TPS

In the system illustrated by this diagram, three TPS supply summarized transaction data to the
MIS reporting system at the end of the time period. Managers gain access to the organizational
data through the MIS, which provides them with the appropriate reports.
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 Executive support systems
– Support senior management
– Address non-routine decisions requiring
judgment, evaluation, and insight
– Incorporate data about external events (e.g. new
tax laws or competitors) as well as summarized
information from internal MIS and DSS
– Example: ESS that provides minute-to-minute
view of firm’s financial performance as measured
by working capital, accounts receivable, accounts
payable, cash flow, and inventory

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