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Chapter 1: What Is anInformation System?Learning ObjectivesUpon successful completion of this chapter, you will beable to: define what an information system is by identifyingits major components; describe the basic history of information systems;and describe the basic argument behind the article“Does IT Matter?” by Nicholas Carr.IntroductionWelcome to the world of information systems, a world that seems tochange almost daily. Over the past few decades information systemshave progressed to being virtually everywhere, even to the pointwhere you may not realize its existence in many of your dailyactivities. Stop and consider how you interface with variouscomponents in information systems every day through differentChapter 1: What Is an InformationSystem? 9

electronic devices. Smartphones, laptop, and personal computersconnect us constantly to a variety of systems including messaging,banking, online retailing, and academic resources, just to name afew examples. Information systems are at the center of tunlimitedresources.Have you ever considered why businesses invest in technology?Some purchase computer hardware and software because everyoneelse has computers. Some even invest in the same hardware andsoftware as their business friends even though different technologymight be more appropriate for them. Finally, some businesses dosufficient research before deciding what best fits their needs. Asyou read through this book be sure to evaluate the contents of eachchapter based on how you might someday apply what you havelearned to strengthen the position of the business you work for, ormaybe even your own business. Wise decisions can result in stabilityand growth for your future enterprise.Information systems surround you almost every day. Wi-finetworks on your university campus, database search services inthe learning resource center, and printers in computer labs aregood examples. Every time you go shopping you are interactingwith an information system that manages inventory and sales. Evendriving to school or work results in an interaction with clights,cameras, etc. Vending machines connect and communicate usingthe Internet of Things (IoT). Your car’s computer system does morethan just control the engine – acceleration, shifting, and brakingdata is always recorded. And, of course, everyone’s smartphone isconstantly connecting to available networks via Wi-fi, recordingyour location and other data.Can you think of some words to describe an information system?Words such as “computers,” “networks,” or “databases” might popinto your mind. The study of information systems encompasses abroad array of devices, software, and data systems. Defining an10 Information Systems for Business and Beyond (2019)

information system provides you with a solid start to this courseand the content you are about to encounter.Defining Information SystemsMany programs in business require students to take a course ininformation systems. Various authors have attempted to define theterm in different ways. Read the following definitions, then see ifyou can detect some variances. “An information system (IS) can be defined technically as a setof interrelated components that collect, process, store, anddistribute information to support decision making and controlin an organization.”1 “Information systems are combinations of hardware, software,and telecommunications networks that people build and use tocollect, create, and distribute useful data, typically inorganizational settings.”2 “Information systems are interrelated components workingtogether to collect, process, store, and disseminateinformation to support decision making, coordination, control,analysis, and visualization in an organization.”3As you can see these definitions focus on two different ways ofdescribing information systems: the components that make up aninformation system and the role those components play in anorganization. Each of these need to be examined.1. [1]2. [2]3. [3]Chapter 1: What Is an Information System? 11

The Components of Information SystemsInformation systems can be viewed as having five majorcomponents: hardware, software, data, people, and processes. Thefirst three are technology. These are probably what you thoughtof when defining information systems. The last two components,people and processes, separate the idea of information systemsfrom more technical fields, such as computer science. In order tofully understand information systems, you will need to understandhow all of these components work together to bring value to anorganization.TechnologyTechnology can be thought of as the application of scientificknowledge for practical purposes. From the invention of the wheelto the harnessing of electricity for artificial lighting, technology hasbecome ubiquitous in daily life, to the degree that it is assumedto always be available for use regardless of location. As discussedbefore, the first three components of information systems –hardware, software, and data – all fall under the category oftechnology. Each of these will be addressed in an individual chapter.At this point a simple introduction should help you in yourunderstanding.HardwareHardware is the tangible, physical portion of an information system– the part you can touch. Computers, keyboards, disk drives, andflash drives are all examples of information systems hardware. How12 Information Systems for Business and Beyond (2019)

these hardware components function and work together will becovered in Chapter 2.SoftwareSoftware comprises the set of instructions that tell the hardwarewhat to do. Software is not tangible – it cannot be touched.Programmers create software by typing a series of instructionstelling the hardware what to do. Two main categories of softwareare: Operating Systems and Application software. OperatingSystems software provides the interface between the hardware andthe Application software. Examples of operating systems for apersonal computer include Microsoft Windows and Ubuntu Linux.The mobile phone operating system market is dominated by GoogleAndroid and Apple iOS. Application software allows the user toperform tasks such as creating documents, recording data in aspreadsheet, or messaging a friend. Software will be explored morethoroughly in Chapter 3.DataThe third technology component is data. You can think of data asa collection of facts. For example, your address (street, city state,postal code), your phone number, and your social networkingChapter 1: What Is an Information System? 13

account are all pieces of data. Like software, data is also intangible,unable to be seen in its native state. Pieces of unrelated data arenot very useful. But aggregated, indexed, and organized togetherinto a database, data can become a powerful tool for businesses.Organizations collect all kinds of data and use it to make decisionswhich can then be analyzed as to their effectiveness. The analysisof data is then used to improve the organization’s performance.Chapter 4 will focus on data and databases, and how it is used inorganizations.Networking CommunicationBesides the technology components (hardware, software, and data)which have long been considered the core technology ofinformation systems, it has been suggested that one othercomponent should be added: communication. An informationsystem can exist without the ability to communicate – the firstpersonal computers were stand-alone machines that did not accessthe Internet. However, in today’s hyper-connected world, it is anextremely rare computer that does not connect to another deviceor to a enetwork. Technically, the networking communicationcomponent is made up of hardware and software, but it is such acore feature of today’s information systems that it has become itsown category. Networking will be covered in Chapter 5.People14 Information Systems for Business and Beyond (2019)

When thinking about informationsystems, it is easy to focus on thetechnology components and forget tolook beyond these tools to fullyunderstand their integration into anorganization. A focus on the peopleinvolved in information systems is thenext step. From the front-line usersupport staff, to systems analysts, todevelopers, all the way up to the chiefinformation officer (CIO), the peopleinvolved with information systems areJeff Bezos, Amazon CEOan essential element. The peoplecomponent will be covered in Chapter 9.ProcessThe last component of information systems is process. A processis a series of steps undertaken to achieve a desired outcome orgoal. Information systems are becoming more integrated withorganizational processes, bringing greater productivity and bettercontrol to those processes. But simply automating activities usingtechnologyisnotenough–businesseslookingto utilizeinformation systems must do more. The ultimate goal is to improveprocesses both internally and externally, enhancing interfaces withsuppliers and customers. Technology buzzwords such as “businessprocess re-engineering,” “business process management,” and“enterprise resource planning” all have to do with the continuedimprovement of these business procedures and the integration oftechnology with them. Businesses hoping to gain a competitiveadvantage over their competitors are highly focused on thisChapter 1: What Is an Information System? 15

component of information systems. The process element ininformation systems will be discussed in Chapter 8.The Role of Information SystemsYou should now understand that information systems have anumber of vital components, some tangible, others intangible, andstill others of a personnel nature. These components collect, store,organize, and distribute data throughout the organization. You mayhave even realized that one of the roles of information systemsis to take data and turn it into information, and then transformthat information into organizational knowledge. As technology hasdeveloped, this role has evolved into the backbone of theorganization, making information systems integral to virtually everybusiness. The integration of information systems into organizationshas progressed over the decades.The Mainframe EraFrom the late 1950s through the1960s, computers were seen asa way to more efficiently docalculations. chinesfirstwerewithIBM 704 Mainframe (Copyright:Lawrence Livermore NationalLaboratory)linked16 Information Systems for Business and Beyond (2019)

together. The primary work was to organize and store large volumesof information that were tedious to manage by hand. Only largebusinesses, universities, and government agencies could affordthem, and they took a crew of specialized personnel and dedicatedfacilities to provide information to organizations.Time-sharing allowed dozens or even hundreds of users tosimultaneously access mainframe computers from locations in thesame building or miles away. Typical functions included scientificcalculations and accounting, all under the broader umbrella of esourcesPlanning (MRP) systems wereintroduced.Registered trademark of InternationalBusiness MachinesrunningonThisasoftware,mainframecomputer, gave companies theabilitytomanagethemanufacturing process, making it more efficient. From trackinginventory to creating bills of materials to scheduling production, theMRP systems gave more businesses a reason to integrate computinginto their processes. IBM became the dominant mainframecompany. Continued improvement in software and the availabilityof cheaper hardware eventually brought mainframe computers (andtheir little sibling, the minicomputer) into most large businesses.Today you probably think of Silicon Valley in northern Californiaas the center of computing and technology. But in the days of themainframe’s dominance corporations in the cities of Minneapolisand St. Paul produced most computers. The advent of the personalcomputer resulted in the “center of technology” eventually movingto Silicon Valley.Chapter 1: What Is an Information System? 17

The PC RevolutionIn 1975, the first microcomputer was announced on the cover ofPopular Mechanics: the Altair 8800. Its immediate popularitysparked the imagination of entrepreneurs everywhere, and therewere soon dozens of companies manufacturing these “personalcomputers.” Though at first just a niche product for computerhobbyists, improvements in usability and the availability of practicalsoftware led to growing sales. The most prominent of these earlypersonal computer makers was a little company known as AppleComputer, headed by Steve Jobs and Steve Wozniak, with the hugelysuccessful “Apple II.” Not wanting to be left out of the revolution,in 1981 IBM teamed with Microsoft, then just a startup company,for their operating system software and hurriedly released theirown version of the personal computer simply called the “PC.” Smallbusinesses finally had affordable computing that could providethem with needed information systems. Popularity of the IBM PCgave legitimacy to the microcomputer and it was namedTime magazine’s “Man of the Year” for 1982.Because of the IBM PC’s openarchitecture, it was easy forother companies to copy, or“clone” it. During the 1980s,manynewcomputercompanies sprang up, offeringless expensive versions of thePC. This drove prices down andspurred innovation. MicrosoftdevelopedtheWindowsoperating system, with versionIBM PC3.1 in 1992 becoming the firstcommercially successful release. Typical uses for the PC during thisperiod included word processing, spreadsheets, and databases.18 Information Systems for Business and Beyond (2019)

These early PCs were standalone machines, not connected to anetwork.Client-ServerIn the mid-1980s, businesses began to see the need to connect theircomputers as a way to collaborate and share resources. Known as“client-server,” this networking architecture allowed users to login to the Local Area Network (LAN) from their PC (the “client”) byconnecting to a central computer called a “server.” The server wouldlookup permissions for each user to determine who had access tovarious resources such as printers and files. Software companiesbegan developing applications that allowed multiple users to accessthe same data at the same time. This evolved into softwareapplications for communicating, with the first popular use ofelectronic mail appearing at this time.This networking and datasharing all stayed mainly withinthe confines of each business.SharingRegistered Trademark of SAPofelectronicdatabetween companies was a veryspecializedfunction.Computers were now seen as tools to collaborate internally withinan organization. These networks of computers were becoming sopowerful that they were replacing many of the functions previouslyperformed by the larger mainframe computers at a fraction of thecost. It was during this era that the first Enterprise ResourcePlanning (ERP) systems were developed and run on the client-serverarchitecture. An ERP system is an application with a centralizeddatabase that can be used to run a company’s entire business. Withseparate modules for accounting, finance, inventory, humanresources, and many more, ERP systems, with Germany’s SAPChapter 1: What Is an Information System? 19

leading the way, represented the state of the art in informationsystems integration. ERP systems will be discussed in Chapter 9.The Internet, World Wide Web and distancebetweentwooccurredon29,1969whendevelopers under the directionof Dr. Leonard Kleinrock sentthe word “login” from thecampus of UCLA to StanfordResearch Institute in MenloPark, California, a distance ofover 350 miles. The UnitedStates Department of Defensecreated and funded ARPA Net(Advanced Research ProjectsAdministration),anexperimental network whichARPANet, 1969eventually became known asthe Internet. ARPA Net began with just four nodes or sites, a veryhumble start for today’s Internet. Initially, the Internet was confinedto use by universities, government agencies, and researchers. Userswere required to type commands (today we refer to this as“command line”) in order to communicate and transfer files. Thefirst e-mail messages on the Internet were sent in the early 1970s asa few very large companies expanded from local networks to theInternet. The computer was now evolving from a purelycomputational device into the world of digital communications.In 1989, Tim Berners-Lee developed a simpler way for researchersto share information over the Internet, a concept he called the20 Information Systems for Business and Beyond (2019)

4World Wide Web. This invention became the catalyst for the growthof the Internet as a way for businesses to share information aboutthemselves. As web browsers and Internet connections became thenorm, companies rushed to grab domain names and createwebsites.In 1991 the National ScienceFoundation, which governedRegistered trademark of Amazon.com,Inc.how the Internet was used,liftedrestrictionsonitscommercial use. Corporationssoon realized the huge potential of a digital marketplace on theInternet and in 1994 both eBay and Amazon were founded. A madrush of investment in Internet-based businesses led to the dot-comboom through the late 1990s, and then the dot-com bust in 2000.The bust occurred as investors, tired of seeing hundreds ofcompanies reporting losses, abandoned their investments. Animportant outcome for businesses was that thousands of miles ofInternet connections, in the form of fiber optic cable, were laidaround the world during that time. The world became truly “wired”heading into the new millenium, ushering in the era of globalization,which will be discussed in Chapter 11. This TED Talk video focuseson connecting Africa to the Internet through undersea fibre opticcable.The digital world also became a more dangerous place as virtuallyall companies connected to the Internet. Computer viruses andworms, once slowly propagated through the s

Aug 01, 2019 · Introduction . Welcome to . Information Systems for Business and Beyond. In this book, you will be introduced to the concept of information systems, their use in business, and how information systems can be used to gain competitive advantage. Audience . This book