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

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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

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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

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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

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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

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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

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Information in Context (continued)
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Exercise No. 1

• Give your own example on the difference between
  data vs information. Take an example from the
  different businesses here in Pohnpei like banks,
  retail/wholesale stores, gas stations etc. You
  could also use as an example our very own
  departments/groupings here in the college like
  the library, Business Office, Financial Aid etc.
  (10 pts)
• Give your own examples of at least two of the
  characteristics that makes up a useful
  information that is not on the textbook (see Page
  11). (10 points)

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What Is a System?

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

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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

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What is a System? (continued)
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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

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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

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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

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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

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The Benefits of Human-Computer Synergy
(continued)
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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

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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

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Information Systems in Organizations (continued)
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Information Systems in Organizations (IS
Components View)
Information Systems
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Information Systems in Organizations
(Organizational View another way of viewing IS)
Organization
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The Four Stages of Processing

• Input collect and introduce data to system
• Transaction a business event, usually entered as
  input (e.g. deposit or withdraw in a bank)
• 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

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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

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The Four Stages of Processing (Model View)
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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

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Computer Equipment for Information Systems
(continued)
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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.
• It is normally used to produce reports for
  managers to make routine-decisions (e.g. Daily
  Sales Report).

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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

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Transaction Processing Systems
ATM
POS (Point-Of-Sale)
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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

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Supply Chain Management Systems
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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

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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

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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

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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

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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

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Geographic Information Systems (continued)
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Exercise No. 2

• The links below are for Information Systems type
  of software
• www.xtuple.com
• www.openbravo.com
• www.opensis.com
• Answer the following questions on the IS software
  assigned to you.
• What are the main functions or capabilities of
  the system?
• What type of companies/institution could benefit
  their system?
• Based on what we learn thus far on the different
  types of IS, on what particular type of IS would
  you categorize their system?
• Could this system fit to our own need here in the
  college? How?
• This is worth 20 points

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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

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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

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Finance

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

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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

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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

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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

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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

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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

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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

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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

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Network Administrator

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

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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

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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

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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)

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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

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Chief Information Officer and
Chief Technology Officer (continued)
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Exercise No. 3 TEAM Activity

• Form a team with two other students. And each
  team member should play a role of any the
  following positions here in College of
  Micronesia
• VP for Instructional Affairs (VPIA)
• HR Director
• IT Director
• Comptroller or Chief Finance Officer (CFO)
• OAR Director
• MITC Director
• Financial Aid Director
• Divisions Chairperson
• Each student role-player should enumerate
  information he or she needs to perform his
  functions. Now list information that two or more
  functions must share (e.g. List of salary rate of
  all employees is used by HR Director as well as
  by the CFO for payroll) and the data produced by
  one function that another function uses (e.g.
  Total number of enrollees each semester produced
  by OAR director is useful to VPIA)
• Criteria Individual Participation 20pts and
  Group Output 20pts

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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

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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

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Summary (continued)

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