Republic of the Philippines

Province of Cotabato
Municipality of Makilala
MAKILALA INSTITUTE OF SCIENCE AND TECHNOLOGY
Makilala, Cotabato
COLLEGE OF TECHNOLOGY AND INFORMATION SYSTEM

Bachelor of Science in Information Systems

Course Number : IS 101 Instructor : Cherry C. Flores

Course Title : FUNDAMENTALS IN INFORMATION SYSTEMS Credits : 3 units (3 hours lecture)
Module No. :1
Duration : 1 week

I. LEARNING OUTCOME(S):
At the end of this module, you are expected to:
1. discuss why it is important to study and understand information systems;
2. distinguish data from information, information from knowledge;
3. identify the characteristics used to evaluate the value of data;

II. TOPIC: AN INTRODUCTION TO INFORMATION SYSTEMS

Lesson 1: Information Concepts
Lesson 2: System Concepts
Lesson 3: What is Information Systems?

III. REFERENCES:
• Principles of Information Systems, Ninth Edition –by Ralph M. Stair and George W. Reynolds –© 2010
Course Technology, Cengage Learning

IV. COURSE CONTENT:

Why Learn About Information Systems?

Information systems are used in almost every imaginable profession. Entrepreneurs and small business
owners use information systems to reach customers around the world. Sales representatives use information
systems to advertise products, communicate with customers, and analyze sales trends. Managers use them to
make multimillion-dollar decisions, such as whether to build a manufacturing plant or research a cancer drug.
Financial planners use information systems to advise their clients to help them save for retirement or their
children’s education. From a small music store to huge multinational companies, businesses of all sizes could
not survive without information systems to perform accounting and finance operations. Regardless of your
college major or chosen career, information systems are indispensable tools to help you achieve your career
goals. Learning about information systems can help you land your first job, earn promotions, and advance
your career.

This chapter presents an overview of information systems. The overview sections on hardware, software,
databases, telecommunications, e-commerce and m-commerce, transaction processing and enterprise
resource planning, information and decision support, special purpose systems, systems development, and
ethical and societal issues are expanded to full chapters in the book. Let’s get started by exploring the basics
of information systems.

LESSON 1: INFORMATION CONCEPTS

Data, Information, and Knowledge

• Data – consist of raw facts, such as an employee number, total hours worked in a week,
inventory part numbers, or sales orders. As shown in Table 1.1, several types of data can
represent these facts. When facts are arranged in a meaningful manner, they become
information.

• Information – is a collection of facts organized so that they have additional value beyond the
value of the individual facts. For example, sales managers might find that knowing the
total monthly sales suits their purpose more (i.e., is more valuable) than knowing the
number of sales for each sales representative.
– Providing information to customers can also help companies increase revenues
and profits. According to Frederick Smith, chairman and president of FedEx, “Information
about the package is as important as the package itself…We care a lot about what’s
inside the box, but the ability to track and trace shipments, and therefore manage
inventory in motion, revolutionized logistics.”

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 Table 1.1 Types of Data

Data represents real-world things. Hospitals and healthcare organizations, for example, maintain patient
medical data, which represents actual patients with specific health situations. In many cases, hospitals and
healthcare organizations are converting data to electronic form. Some have developed electronic records
management (ERM) systems to store, organize, and control important data. However, data—raw facts—
has little value beyond its existence. For example, consider data as pieces of railroad track in a model
railroad kit. Each piece of track has limited inherent value as a single object. However, if you define a
relationship among the pieces of the track, they will gain value. By arranging the pieces in a certain way, a
railroad layout begins to emerge (see Figure 1.1a, top). Data and information work the same way. Rules
and relationships can be set up to organize data into useful, valuable information. The type of information
created depends on the relationships defined among existing data. For example, you could rearrange the
pieces of track to form different layouts. Adding new or different data means you can redefine relationships
and create new information. For instance, adding new pieces to the track can greatly increase the value—
in this case, variety and fun—of the final product. You can now create a more elaborate railroad layout
(see Figure 1.1b, bottom). Likewise, a sales manager could add specific product data to his sales data to
create monthly sales information organized by product line. The manager could use this information to
determine which product lines are the most popular and profitable.

Figure 1.1 Defining and Organizing Relationships Among Data Creates Information

Turning data into information is a process, or a set of logically related tasks performed to achieve a
defined outcome. The process of defining relationships among data to create useful information requires
knowledge.

Knowledge – is the awareness and understanding of a set of information and the ways that
information can be made useful to support a specific task or reach a decision.
– Having knowledge means understanding relationships in information.

In some cases, people organize or process data mentally or manually. In other cases, they use a
computer. In the earlier example, the manager could have manually calculated the sum of the sales of
each representative, or a computer could have calculated this sum. Where the data comes from or how it
is processed is less important than whether the data is transformed into results that are useful and valuable.
This transformation process is shown in Figure 1.2.

Figure 1.2 The Process of Transforming Data Into Information

The Characteristics of Valuable Information

The value of information is directly linked to how it helps decision makers achieve their
organization’s goals. Valuable information can help people and their organizations perform tasks more
efficiently and effectively. Valuable information can also help managers decide whether to invest in
additional information systems and technology.

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 To be valuable to managers and decision makers, information should have the characteristics
described in Table 1.2. These characteristics make the information more valuable to an organization.

Characteristics Definitions
Information should be easily accessible by authorized users so they can
Accessible
obtain it in the right format and at the right time to meet their needs.
Accurate information is error free. In some cases, inaccurate information is
Accurate generated because inaccurate data is fed into the transformation process.
(This is commonly called garbage in, garbage out [GIGO].)
Complete information contains all the important facts. For example, an
Complete investment report that does not include all important costs is not complete.

Information should also be relatively economical to produce. Decision

Economical makers must always balance the value of information with the cost of
producing it.
Flexible information can be used for a variety of purposes. For example,
information on how much inventory is on hand for a particular part can be
used by a sales representative in closing a sale, by a production manager
Flexible
to determine whether more inventory is needed, and by a financial
executive to determine the total value the company has invested in
inventory.
Relevant information is important to the decision maker. Information
Relevant showing that lumber prices might drop might not be relevant to a
computer chip manufacturer.
Reliable information can be trusted by users. In many cases, the reliability of
the information depends on the reliability of the data-collection method. In
Reliable other instances, reliability depends on the source of the information. A
rumor from an unknown source that oil prices might go up might not be
reliable.
Secure Information should be secure from access by unauthorized users.
Information should be simple, not overly complex. Sophisticated and
detailed information might not be needed. In fact, too much information
Simple can cause information overload, whereby a decision maker has too much
information and is unable to determine what is really important.

Timely information is delivered when it is needed. Knowing last week’s

Timely weather conditions will not help when trying to decide what coat to wear
today.
Information should be verifiable. This means that you can check it to make
Verifiable sure it is correct, perhaps by checking many sources for the same
information.
Table 1.2 Characteristics of Valuable Information

LESSON 2: SYSTEM CONCEPTS

System – is a set of elements or components that interact to accomplish goals. The elements
themselves and the relationships among them determine how the system works.
– Systems have inputs, processing mechanisms, outputs, and feedback (see Figure 1.3).
§ For example, consider an automatic car wash. Tangible inputs for the process are
a dirty car, water, and various cleaning ingredients. Time, energy, skill, and
knowledge also serve as inputs to the system because they are needed to
operate it. Skill is the ability to successfully operate the liquid sprayer, foaming
brush, and air dryer devices. Knowledge is used to define the steps in the car
wash operation and the order in which the steps are executed.

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 Figure 1.3 Components of a System
A system’s four components consist of input, processing, output, and feedback.

The processing mechanisms consist of first selecting which cleaning option you want (wash only, wash
with wax, wash with wax and hand dry, etc.) and communicating that to the operator of the car wash. A
feedback mechanism is your assessment of how clean the car is. Liquid sprayers shoot clear water, liquid
soap, or car wax depending on where your car is in the process and which options you selected. The
output is a clean car. As in all systems, independent elements or components (the liquid sprayer, foaming
brush, and air dryer) interact to create a clean car.

LESSON 3: WHAT IS AN INFORMATION SYSTEMS?

As mentioned previously, an information system (IS) is a set of interrelated elements or components that
collect (input), manipulate (process), store, and disseminate (output) data and information, and provide a
corrective reaction (feedback mechanism) to meet an objective (see Figure 1.5). The feedback
mechanism is the component that helps organizations achieve their goals, such as increasing profits or
improving customer service.

Figure 1.5 The Components of an Information System

Feedback is critical to the successful operation of a system.

Input, Processing, Output, Feedback

1.) Input – The activity of gathering and capturing raw data.

– For example:
§ In producing paychecks, for example, the number of hours every employee works must
be collected before paychecks can be calculated or printed.
§ In a university grading system, instructors must submit student grades before a summary
of grades for the semester or quarter can be compiled and sent to the students.

2.) Processing – Converting or transforming data into useful outputs.

– Processing can involve making calculations, comparing data and taking alternative
actions, and storing data for future use. Processing data into useful information is
critical in business settings.
– Processing can be done manually or with computer assistance.

3.) Output – Production of useful information, usually in the form of documents and reports.
– Outputs can include paychecks for employees, reports for managers, and information
supplied to stockholders, banks, government agencies, and other groups. In some cases,
output from one system can become input for another.

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 – For example:
§ Output from a system that processes sales orders can be used as input to a customer
billing system.

4.) Feedback – Output that is used to make changes to input or processing activities.
– For example:
§ Errors or problems might make it necessary to correct input data or change a
process. Consider a payroll example. Perhaps the number of hours an employee
worked was entered as 400 instead of 40. Fortunately, most information systems
check to make sure that data falls within certain ranges. For number of hours
worked, the range might be from 0 to 100 because it is unlikely that an employee
would work more than 100 hours in a week. The information system would determine
that 400 hours is out of range and provide feedback. The feedback is used to check
and correct the input on the number of hours worked to 40. If undetected, this error
would result in a very high net pay on the printed paycheck!
– Feedback is also important for managers and decision makers.
§ For example, a furniture maker could use a computerized feedback system to link its
suppliers and plants. The output from an information system might indicate that
inventory levels for mahogany and oak are getting low—a potential problem. A
manager could use this feedback to decide to order more wood from a supplier.
These new inventory orders then become input to the system. In addition to this
reactive approach, a computer system can also be proactive—predicting future
events to avoid problems. This concept, often called forecasting, can be used to
estimate future sales and order more inventory before a shortage occurs.

Manual and Computerized Information Systems & Computer-Based Information Systems

• Manual Information Systems

– A manual information system does not use any computerized devices. The recording,
storing and retrieving of data is done manually by the people, who are responsible for the
information system.
– Investment analysts manually draw charts and trend lines to assist them in making
investment decisions.

• Computer – Based Information Systems (CBIS)

– A single set of hardware, software, databases, telecommunications, people, and
procedures that are configured to collect, manipulate, store, and process data into
information.
– Some examples of CBIS:
§ Company’s payroll
§ Order entry
§ Inventory-control system
– The components of a CBIS are illustrated in Figure 1.6. Information Technology (IT) refers
to hardware, software, databases, and telecommunications.

A business’s technology infrastructure includes all the hardware, software, databases,

telecommunications, people, and procedures that are configured to collect, manipulate, store, and
process data into information. The technology infrastructure is a set of shared IS resources that form the
foundation of each computer-based information system.

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 Figure 1.6. The Components of a Computer – Based Information System

1.) Hardware – consists of computer equipment used to perform input, processing, and output
activities.
– Input devices includes:
§ Keyboards
§ Mice and other pointing devices
§ Automatic scanning device
§ Equipment that can read magnetic ink characters

– Processing devices includes:

§ Computer chips that contain the central processing unit (CPU) and main
memory.
§ Processor speed is also important. Advances in chip design allow faster
speeds, less power consumption, and larger storage capacity.

– Output device includes:

§ Printers
§ Computer screens or monitors
§ Printer kiosk

2.) Software - consists of the computer programs that govern the operation of the computer.
– These programs allow a computer to process payroll, send bills to customers, and
provide managers with information to increase profits, reduce costs, and provide
better customer service.
– With software, people can work anytime at any place.

– 2 types of software:
1. System Software – which controls basic operations including start-up and
printing such as Microsoft Windows Vista.

2. Application Software – which allows user to accomplish specific task including

word processing or creating spreadsheets such as
Microsoft Office 2007.
– Sophisticated application software, such as Adobe
Creative Suite 3, can be used to design, develop,
print, and place professional-quality advertising,
brochures, posters, prints, and videos on the Internet.

3.) Databases – is an organized collection of facts and information, typically consisting of two or
more related data files.
– An organization’s database can contain facts and information on customers,
employees, inventory, competitors’ sales, online purchases, and much more.

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 4.) Telecommunications, Networks, and the Internet
– Telecommunications is the electronic transmission of signals for communications,
which enables organizations to carry out their processes and tasks through
effective computer networks.
§ With telecommunications, people can work at home or while traveling.
This approach to work, often called telecommuting, allows a
telecommuter living in England to send his or her work to the United States,
China, or any location with telecommunications capabilities.

– Networks connect computers and equipment in a building, around the country, or

around the world to enable electronic communication.

– Internet is the world’s largest computer network, consisting of thousands of

interconnected networks, all freely exchanging information.
§ Increasingly, the Internet is used for communications, collaboration, and
information sharing.
§ Internet sites like MySpace and Facebook connect friends and
colleagues.
§ Internet users can create Web logs (blogs) to store and share thoughts
and ideas with other people around the world. Podcasting, to download
audio programs or music from the Internet.
§ The World Wide Web (WWW) or the Web is a network of links on the
Internet to documents containing text, graphics, video, and sound.
§ Intranet is an internal network based on Web technologies that allows
people within an organization to exchange information and work on
projects.
§ Extranet is a network based on the Web technologies that allows selected
outsiders, such as business partners and customers, to access authorized
resources of a company’s intranet.

5.) People – can be the most important element in most computer-based information systems.
– Information systems personnel include all the people who manage, run, program, and
maintain the system.
– Users are people who work with information systems to get results. Users include
financial executives, marketing representatives, manufacturing operators, and many
others. Certain computer users are also IS personnel.

6.) Procedures - include the strategies, policies, methods, and rules for using the CBIS, including the
operation, maintenance, and security of the computer.
– Good procedures can help companies take advantage of new opportunities
and avoid potential disasters.
– Poorly developed and inadequately implemented procedures, how- ever, can
cause people to waste their time on useless rules or result in inadequate
responses to disasters, such as hurricanes or tornadoes.

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