IT modeling & economics
1. Information systems development
1.1. Basic concepts
Informatics
Informatics is the science of information processing (with computers)
• Economy – Economics
• Information processing - Informatics
What is information?
Typically, in order to process information organizations use information systems
• Trend: evolution towards paperless organization
These information systems make use of information technology, but also involve other
aspects
Information technology
IT concerns one aspect of IS
IT concerns the different technological components an information system requires in order
to function:
• Computer hardware
• Computer software (software = technology!)
• Telecommunication and networktechnology (ICT > IT)
• Technology to manage and manipulate data resources
System
General definition of a system: in its simplest form, a system is a clearly delineated set of
interrelated components which cooperate to realize a set of common objectives
• Broadly applicable concept: cell, human, eco-system, planet, planetary system, …
• Boundaries depend on the adopted perspective
• Subsystems
• Interface – interaction
,Information system
An organized combination of (all or some of the following elements):
• People
• Hardware
• Software
• Communication networks
• Data resources
• Policies and procedures
That stores, retrieves, transforms or processes, and disseminates information to end-users
throughout an organization in a controlled manner
Business Applications
,Definition system: ‘… to realize a set of common objectives’
Use of IS within organizations:
• At a more abstract level than “storing, retrieving, …” (see previous slide)
• Increase the efficiency and effectiveness of:
o Business processes
o Management decision making
o Collaboration
• In support of both:
o Product development,
o Customer support,
o … in principle any business function
• Additionally: strategic role, innovation, competitive advantage
Remark:
• Support business processes
• Support management decision making
Hence a need for:
• Process modeling
• Data modeling
Development of IS
In this course we focus on the development of information systems
Main research question:
How do we develop information systems that meet the user requirements by supporting
business processes and decision making by providing the required information to end-users
… from a managerial, non-technical perspective!
We focus on what the solution should look like, rather than how to implement it.
Why should we bother?
Society runs on information!
• Uses of IS in organizations:
o In today’s complex economical society organizations have to rely on
(quantitative, but also qualitative) information to make daily decisions in a
rational and optimal manner
▪ Facts versus intuition: management science
▪ Making better decisisons
o Support business processes and improve efficiency and effectiveness
o Information technology as innovation
, Information
What is data?
• Information is everything that can be captured and stored as a sequence of zeros and
ones, and as such everything that may be represented as a bit-sequence
What is information?
• Information is everything that can be captured and stored as a sequence of zeros and
ones, and as such everything that may be represented as a bit-sequence … and which
has utility (use or value) to the consumer, receiver, or end-user
• Information = data with utility (use or value) to the receiver
What is the difference between information and data?
What is the difference between information and knowledge?
What is the difference between knowledge and wisdom?
Subjective!
• Meaning: depending on the subject
Typically dependent on or determined by the involved level of:
• Aggregation
• Transformation or processing
• Understanding
• Utility for the information consumer
Model
General definition of a model: a model is a simplified and/or idealized representation of
(part of) reality
• Business model: Dell
• Physical model: prototype
• Graphical model:
• Mathematical or computer model:
o Set of equations or formulas
o Credit risk modeling
o Linear regression model: 𝑦 = 𝛽! + 𝛽"𝑥" + 𝛽#𝑥#
Modeled (part of) reality: system
A model is some description of a system. It might be a drawing, such as the plans for a
house. It might be a description, like the estate’ agent’s details of a house. It might be a
prototype of some kind, …
1. Information systems development
1.1. Basic concepts
Informatics
Informatics is the science of information processing (with computers)
• Economy – Economics
• Information processing - Informatics
What is information?
Typically, in order to process information organizations use information systems
• Trend: evolution towards paperless organization
These information systems make use of information technology, but also involve other
aspects
Information technology
IT concerns one aspect of IS
IT concerns the different technological components an information system requires in order
to function:
• Computer hardware
• Computer software (software = technology!)
• Telecommunication and networktechnology (ICT > IT)
• Technology to manage and manipulate data resources
System
General definition of a system: in its simplest form, a system is a clearly delineated set of
interrelated components which cooperate to realize a set of common objectives
• Broadly applicable concept: cell, human, eco-system, planet, planetary system, …
• Boundaries depend on the adopted perspective
• Subsystems
• Interface – interaction
,Information system
An organized combination of (all or some of the following elements):
• People
• Hardware
• Software
• Communication networks
• Data resources
• Policies and procedures
That stores, retrieves, transforms or processes, and disseminates information to end-users
throughout an organization in a controlled manner
Business Applications
,Definition system: ‘… to realize a set of common objectives’
Use of IS within organizations:
• At a more abstract level than “storing, retrieving, …” (see previous slide)
• Increase the efficiency and effectiveness of:
o Business processes
o Management decision making
o Collaboration
• In support of both:
o Product development,
o Customer support,
o … in principle any business function
• Additionally: strategic role, innovation, competitive advantage
Remark:
• Support business processes
• Support management decision making
Hence a need for:
• Process modeling
• Data modeling
Development of IS
In this course we focus on the development of information systems
Main research question:
How do we develop information systems that meet the user requirements by supporting
business processes and decision making by providing the required information to end-users
… from a managerial, non-technical perspective!
We focus on what the solution should look like, rather than how to implement it.
Why should we bother?
Society runs on information!
• Uses of IS in organizations:
o In today’s complex economical society organizations have to rely on
(quantitative, but also qualitative) information to make daily decisions in a
rational and optimal manner
▪ Facts versus intuition: management science
▪ Making better decisisons
o Support business processes and improve efficiency and effectiveness
o Information technology as innovation
, Information
What is data?
• Information is everything that can be captured and stored as a sequence of zeros and
ones, and as such everything that may be represented as a bit-sequence
What is information?
• Information is everything that can be captured and stored as a sequence of zeros and
ones, and as such everything that may be represented as a bit-sequence … and which
has utility (use or value) to the consumer, receiver, or end-user
• Information = data with utility (use or value) to the receiver
What is the difference between information and data?
What is the difference between information and knowledge?
What is the difference between knowledge and wisdom?
Subjective!
• Meaning: depending on the subject
Typically dependent on or determined by the involved level of:
• Aggregation
• Transformation or processing
• Understanding
• Utility for the information consumer
Model
General definition of a model: a model is a simplified and/or idealized representation of
(part of) reality
• Business model: Dell
• Physical model: prototype
• Graphical model:
• Mathematical or computer model:
o Set of equations or formulas
o Credit risk modeling
o Linear regression model: 𝑦 = 𝛽! + 𝛽"𝑥" + 𝛽#𝑥#
Modeled (part of) reality: system
A model is some description of a system. It might be a drawing, such as the plans for a
house. It might be a description, like the estate’ agent’s details of a house. It might be a
prototype of some kind, …
