Introduction to Information Systems and Their Role in Business Administration
Basic Administration Tasks
Tasks: Organization, direction, control, planning.
Functions of a Business
Marketing, Human Resources (HR), Finance, Production.
Evolution of Management Theory
Focus on Tasks:
- Scientific Administration (Taylor)
- Classical Management (Fayol)
- Weber’s Bureaucracy
- Structuralist
- Human Relations
- Behavioral
- Organizational Development
General Systems Theory
According to Kwasnicka (2006, p.4), the general systems theory originated from the work of Ludwig von Bertalanffy’s “The Theory of Open Systems in Physics and Biology” (1951), which initiated a movement towards a unified science.
System Definition
Kwasnicka (2006, p.4) defines a system as a group of interrelated and integrated elements working together to achieve a specific outcome.
Concept of Information Systems
Laudon and Laudon (1999, p.4) define an information system as a set of interrelated components that work together to collect, retrieve, process, store, and distribute information to support planning, control, coordination, analysis, and decision-making in organizations.
Information
Information is a set of meaningful data that reduces uncertainty, increases knowledge, and provides guidance for actions.
Data Transformation into Information
Data are raw facts. When organized and processed, they become valuable and useful information. Transforming data into information is the primary function of information systems.
Data => Process => Organization => Information
Data, Information, and Knowledge
Through information, individuals acquire knowledge. This knowledge is used to generate ideas, make decisions, and solve problems. However, information only becomes knowledge when it is understood.
Data => Search & Organization => Information => Recognition & Comprehension => Knowledge
Communication
Communication involves the methods and procedures used to send, receive, and transmit information.
Laws of Information
- 1st Law: Information is shareable.
- 2nd Law: The value of information increases with use.
- 3rd Law: Information is perishable.
- 4th Law: The value of information increases with precision.
- 5th Law: The value of information increases when combined with other information.
- 6th Law: More information is not necessarily better.
- 7th Law: Information multiplies.
Basic Activities of Information Systems
- Inputs: Capturing and collecting data from within the organization or the external environment.
- Processing: Performing operations on data to transform it into meaningful information.
- Outputs: Transferring processed information to individuals or activities where it will be used.
- Feedback: Output that returns to appropriate members of the organization to help them evaluate or correct the input stage.
Classification of Information Systems
By Complexity:
- Simple Systems: Few components with straightforward relationships (e.g., mixing ingredients for a cake).
- Complex Systems: Numerous components (people, machines) with intricate and interconnected relationships (e.g., manufacturing an automobile).
By Interaction with the Environment:
- Open Systems: Interact with their environment (e.g., companies, universities).
- Closed Systems: Do not interact significantly with their environment (rare in reality).
By Adaptability:
- Stable (Non-Adaptive) Systems: Minimally influenced by their environment.
- Dynamic (Adaptive) Systems: Constantly changing in response to environmental changes (e.g., car factory, electronics manufacturer).
By Duration:
- Permanent Systems: Exist for extended periods (e.g., large corporations, universities).
- Temporary Systems: Exist for a limited time (e.g., research groups).
Types of Information Systems
- Operational Information Systems (OIS): Focus on routine tasks and automate basic operations (e.g., payroll system).
- Management Information Systems (MIS): Provide reports and information to support management decision-making.
- Decision Support Systems (DSS): Use models and data analysis to assist in solving specific problems and making complex decisions.
- Executive Support Systems (ESS): Support strategic planning and decision-making at the highest levels of an organization.
- Strategic Information Systems (SIS): Help organizations gain a competitive advantage by supporting strategic goals and objectives.
- Office Automation Systems (OAS): Enhance productivity for information workers through tools like word processing, spreadsheets, and email.
- Expert Systems (ES): Use artificial intelligence to provide expert-level advice and support decision-making in specialized areas.
Information Systems Specialists
Individuals involved in the development and use of computerized systems, including clerks, operators, programmers, software engineers, systems analysts, and administrators.
Networks
Networks facilitate data communication within an organization and can be classified by size and reach.
Network Classifications:
- By Business Function: Workgroup, Domain.
- By Size/Reach: Local Area Network (LAN), Wide Area Network (WAN).
Examples of Networks:
- Internet: A global network of interconnected computers.
- Intranet: A private network within an organization.
- Extranet: A secure extension of an intranet that allows controlled access to external partners.
Database Hierarchy
- Character: A single alphanumeric symbol.
- Field: A group of characters representing an attribute of an entity.
- Record: A group of fields describing an entity.
- File: A group of related records.
- Database: A logical grouping of related files.
Data Management
Involves the development and implementation of policies for data ownership, control, and access. It encompasses the collection, storage, and dissemination of data.
Data Planning
Focuses on preparing strategic and technical plans for databases, identifying data-sharing opportunities, and defining operational procedures.
Database Management
Ensures the proper use of database management technology, including evaluating and selecting database software.
Database Management System (DBMS)
A set of computer programs that manage and control access to a database.
Database (Data Bank)
A marketing tool that uses IT to segment consumer groups through profile analysis and targeted actions.
Data Warehouse
An integrated information system that collects data from multiple sources to support analysis and decision-making.
Data Mining
The process of extracting knowledge from data by discovering patterns, trends, and anomalies.
Hardware
The physical components of a computer system, including input devices, output devices, storage devices, the central processing unit (CPU), and memory (RAM).
Software
The programs and instructions that tell the hardware what to do. It is divided into two main categories: basic software (operating systems, programming languages) and application software (programs designed for specific tasks).
E-commerce (Electronic Commerce)
Any form of business transaction conducted electronically.
Types of E-commerce:
- B2B (Business to Business): Transactions between businesses.
- B2C (Business to Consumer): Transactions between businesses and consumers.
- B2E (Business to Employee): Transactions between businesses and their employees.
- B2M (Business to Management or E-government): Transactions between businesses and government organizations.
ERP (Enterprise Resource Planning)
An integrated system that manages core business processes using a centralized database.
CRM (Customer Relationship Management)
A system that helps manage customer interactions and data to improve relationships and customer satisfaction.
BI (Business Intelligence)
A set of tools and techniques that enable organizations to analyze data and gain insights to support decision-making.
KM (Knowledge Management)
The process of capturing, storing, and sharing knowledge within an organization.
AI (Artificial Intelligence)
The simulation of human intelligence processes by machines, often used to improve decision-making and automate tasks.
Career Opportunities in Information Systems
A wide range of career options exist in the field of information systems, including database administration, network administration, systems analysis, software development, IT consulting, and management roles.
Business Ethics in Information Systems
Ethical considerations are crucial in the development and use of information systems, ensuring responsible data handling, privacy protection, and ethical decision-making.
Alignment Between Business and IT
Achieving alignment between business and IT involves aligning IT strategies with organizational goals and objectives to maximize efficiency and effectiveness. This requires understanding business needs, evaluating available technologies, and developing a strategic plan that leverages technology to achieve business goals.
Security in Information Systems
Security is paramount in today’s business environment. Organizations must implement robust security measures to protect sensitive data, prevent unauthorized access, and ensure business continuity.
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