Management Information Systems, Sixth Edition

1
Management Information Systems, Sixth Edition

• Chapter 1
• Business Information Systems
• An Overview

2
Objectives

• Explain why information technology matters
• Define digital information and explain why
  digital systems are so powerful and useful
• Explain why information systems are essential to
  business
• Describe how computers process data into useful
  information for problem solving and decision
  making
• Identify the functions of different types of
  information systems in business

3
Objectives (continued)

• Describe careers in information technology
• Identify major ethical and societal concerns
  created by widespread use of information
  technology

4
Does Information Technology Matter?

• Hackett Group study Does IT Matter? Hackett
  Concludes the Answer is Yes
• Worlds best performing companies spent 7 more
  per employee on IT than typical companies
• They recouped the investment fivefold in lower
  operational costs
• Todays business professionals must know how to
  develop and use IT

5
The Power of Digital Systems

• Binary counting system uses only two digits
  0 and 1
• Digital systems
• Computers and devices that use the binary system
• Can represent any information as a combination of
  zeros and ones
• Information can be represented, stored,
  communicated, and processed digitally

6
The Power of Digital Systems (continued)

• Digital information is stored and communicated by
  means of electromagnetic signals
• Extremely fast
• Digital copy is an exact copy of the original
• Accuracy and speed make digital systems powerful,
  useful, and important

7
The Purpose of Information Systems

• Businesses use information systems
• To make sound decisions
• To solve problems
• Problem any undesirable situation
• Decision arises when more than one solution to
  problem exists
• Both problem solving and decision making require
  information

8
The Purpose of Information Systems (continued)

• Keys to success in business
• Gathering correct information efficiently
• Storing information
• Using information
• Purpose of information systems is to support
  these activities

9
Data, Information, and Information Systems

• Data, information, and system are commonly
  used terms
• Important to understand their similarities and
  differences

10
Data vs. Information

• Data a given or fact
• Can be number, statement, or picture
• Is the raw material in the production of
  information
• Information facts or conclusions that have
  meaning within context
• Composed of data that has been manipulated

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Data Manipulation

• Data is manipulated to make useful information
• New information can be generated from data, such
  as averages, trends, etc.
• Survey is common method of collecting data
• Raw data is hard to read
• Information is more useful to business than data

12
Generating Information

• Process the manipulation of data
• Usually produces information
• May produce more data
• A piece of information (output of a process) in
  one context may be considered data (input to a
  process) in another context

13
Generating Information (continued)
14
Information in Context

• Not all information is useful
• To be useful, information must be
• Relevant
• Complete
• Accurate
• In business, information must also be
• Current
• Obtained in a cost-effective manner

15
Information in Context (continued)
16
What Is a System?

• System array of components that work together to
  achieve goal or goals
• System
• Accepts input
• Processes input
• Produces output

17
What is a System? (continued)

• System may have multiple goals
• System may contain subsystems
• Subsystem component of a larger system
• Subsystems have subgoals that contribute to main
  goal
• Subsystems can receive input from and transfer
  output to other subsystems

18
What is a System? (continued)
19
What is a System? (continued)

• Closed system has no connections with other
  systems
• Open system interfaces and interacts with other
  systems
• Often a subsystem of a bigger system
• Subsystems by definition are always open
• Information system (IS) components that work
  together to process data and produce information

20
Information and Managers

• Systems thinking thinking of an organization in
  terms of subsystems
• Powerful management approach that creates a
  framework for problem solving and decision making
• Helps keep managers focused on overall goals
• Database collection of electronic records
• Information systems automate exchange of
  information among subsystems

21
Information and Managers (continued)

• Information map description of data and
  information flow within an organization
• Shows a network of information subsystems that
  exchange information with each other and with the
  outside world
• Information technology technologies that
  facilitate construction and maintenance of
  information systems

22
The Benefits of Human-Computer Synergy

• Humans are relatively slow and make mistakes
• Computers cannot make decisions unless programmed
  to do so
• Synergy combining resources to produce output
  that exceeds the sum of outputs of the separate
  resources by themselves
• Human-computer combination allows human thought
  to be translated into efficient processing of data

23
The Benefits of Human-Computer Synergy
(continued)
24
Information Systems in Organizations

• Information system consists of data, hardware,
  software, telecommunications, people, and
  procedures
• Computer-based Information system system with
  one or more computers at center
• Organizations lag behind and lose competitiveness
  if they do not use information systems

25
Information Systems in Organizations (continued)

• Trends that have made information systems
  important in business
• Growing power and decreasing cost of computers
• Growing capacity and decreasing costs of data
  storage devices
• Increasing variety and ingenuity of computer
  programs
• Available, reliable, affordable, and fast
  communications links to the Internet
• Growth of the Internet
• Increasing computer literacy of the workforce

26
Information Systems in Organizations (continued)
27
The Four Stages of Processing

• Input collect and introduce data to system
• Transaction a business event, usually entered as
  input
• Transaction processing system (TPS) a system
  that records transactions
• Input devices include keyboards, bar code
  readers, voice recognition systems, touch screens
• Data processing perform calculations on input

28
The Four Stages of Processing (continued)

• Output what is produced by the information
  system
• Output devices include printers and speakers
• Storage maintaining vast amounts of data
• Storage devices include optical discs

29
Computer Equipment for Information Systems

• Different technologies are used to support the
  four data processing functions
• Input devices receive input
• Computers process data
• Output devices display information
• Storage devices store data
• Network devices transfer data
• Telecommunications communication that takes
  place between computers over great distances

30
Computer Equipment for Information Systems
(continued)
31
From Recording Transactions to Providing
Expertise Types of
Information Systems

• Different types of information systems serve
  different functions
• Capabilities of applications have been combined
  and merged
• Management Information System a system that
  supports planning, control, and making decisions

32
Transaction Processing Systems

• Transaction processing system (TPS) most widely
  used type of system
• Records data collected at point where
  organization transacts business with other
  parties
• Point-of-sale machines record sales
• Include cash registers, ATMs, and purchase order
  systems

33
Supply Chain Management Systems

• Supply chain sequence of activities involved in
  producing and selling products or services
• For products, activities include marketing,
  purchasing raw materials, manufacturing and
  assembly, packing and shipping, billing,
  collection, and after-sale services
• For services, activities include marketing,
  document management, and monitoring customer
  portfolios

34
Supply Chain Management Systems (continued)

• Supply chain management (SCM) systems systems
  that support these activities
• Also known as enterprise resource planning
  systems
• SCM systems eliminate the need to reenter data
  that was captured elsewhere in the organization
• An SCM is an enterprise application

35
Customer Relationship
Management Systems

• Customer relationship management (CRM) systems
  systems for managing relations with customers
• Used in combination with telephones to provide
  customer service
• Often linked to Web applications that track
  online transactions
• Retaining loyal customers is less expensive than
  acquiring new ones

36
Business Intelligence Systems

• Business intelligence (BI) systems systems that
  glean relationships and trends from raw data to
  help organization compete
• Often contain statistical models
• Access large pools of data
• Data warehouse large database that usually store
  transactional records

37
Decision Support and Expert Systems

• Decision support system (DSS) supports decision
  making
• Relies on models to produce tables
• Extrapolates data to predict outcomes
• Helps answer What if? questions
• Expert system (ES) supports knowledge-intensive
  decision making
• Uses artificial intelligence techniques
• Can preserve the knowledge of retiring experts

38
Geographic Information Systems

• Geographic information system (GIS) ties data to
  physical locations
• Represents data on a map in different formats
• May reflect demographic information in addition
  to geographic information
• May use information from global positioning
  system (GPS) satellites
• Examples Google Earth, Mapquest

39
Geographic Information Systems (continued)
40
Information Systems in Business Functions

• Functional business area services within a
  company that support main business
• Includes accounting, finance, marketing, and
  human resources
• Part of a larger enterprise system

41
Accounting

• Accounting information systems
• Help record transactions
• Produce periodic statements
• Create required reports for law
• Create supplemental reports for managers
• Contain controls to guarantee adherence to
  standards

42
Finance

• Finance systems
• Facilitate financial planning and business
  transactions
• Tasks include organizing budgets, managing cash
  flow, analyzing investments, and making decisions

43
Marketing

• Marketings purpose is to pinpoint likely
  customers and promote products
• Marketing information systems
• Analyze demand for products in regions and
  demographic groups
• Identify trends in demand for products/services
• Help analyze how advertising campaigns affect
  profit
• Web provides opportunity to collect marketing
  data as well as promote products and services

44
Human Resources

• Human resource management systems aid
  record-keeping
• Must keep accurate records
• Aids recruiting, selection, placement, benefits
  analysis, requirement projections
• Performance evaluation systems provide grading
  utilities

45
Web-Empowered Enterprises

• E-commerce buying and selling goods and services
  through Internet
• Internet is a vast network of computers connected
  globally
• Web has a profound impact on information systems
• An emerging advertising medium
• A place to conduct e-commerce

46
Careers in Information Systems

• Information technology professionals are
  increasingly in demand
• Network administrator, system administrator,
  system analyst, software engineering, data
  communications analyst, and database
  administrator jobs are increasing in demand

47
Help Desk Technician

• Help desk technician
• Supports end users in their daily use of IT
• Often provides help via telephone
• May use software that gives them control of the
  users PC
• May need to have knowledge of a wide variety of
  PC applications

48
Systems Analyst

• Systems analyst
• Researches, plans, and recommends software and
  systems choices
• Responsible for developing cost analyses, design
  considerations, implementation timelines, and
  feasibility studies
• Involves analyzing system requirements,
  documenting development efforts, and providing
  specifications for programmers
• Requires communication and presentation skills

49
Database Administrator

• Database administrator (DBA) responsible for
  databases and data warehouses
• Develops and acquires database applications
• Must adhere to federal, state, and corporate
  regulations to protect privacy of customers and
  employees
• Responsible for securing the database

50
Network Administrator

• Network administrator acquires, implements,
  manages, maintains, and troubleshoots networks
• Implements security
• Firewalls
• Access codes

51
System Administrator

• System administrator manages an organizations
  computer operating systems
• Must ensure that operating systems work together,
  support business requirements, and function
  properly
• Responsible for backup and recovery, adding and
  deleting user accounts, performing system upgrades

52
Webmaster

• Webmaster creates and maintains Web site
• Must be familiar with Web transaction software,
  payment-processing software, security software
• Manages both the intranet and extranet
• Demand for Webmasters grows as more businesses
  use Web

53
Chief Security Officer

• Chief security officer (CSO) supervises security
  of information system
• Position exists due to growing threat to
  information security
• Usually reports to chief information officer (CIO)

54
Chief Information Officer and
Chief Technology Officer

• Chief information officer (CIO) responsible for
  all aspects of information system
• Often a corporate vice president
• Must have technical understanding of information
  technologies as well as business knowledge
• Chief technology officer (CTO) has similar
  duties as CIO

55
Chief Information Officer and
Chief Technology Officer (continued)
56
Summary

• Computer-based information systems pervade almost
  every aspect of our lives
• A system is a set of components that work
  together to achieve a common goal
• Subsystem a system performs a limited task that
  produces an end result, which must be combined
  with other products from other systems to reach
  an ultimate goal
• Data processing has four stages

57
Summary (continued)

• Any IS that helps in management is a management
  information system (MIS)
• Many different types of MIS
• Enterprise application systems (SCM or ERP) tie
  together different functional areas of a business
• ISs are used in many business functions,
  including accounting, finance, marketing, and
  human resources

58
Summary (continued)

• The job prospects for IT professionals are bright
• IT has created societal concerns regarding
  privacy, identity theft, spam, and Web annoyances