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Management Information Systems, Sixth Edition


Management Information Systems, Sixth Edition Chapter 1 Business Information Systems: An Overview * * MIS extracts data from a database to compile reports, such as ... – PowerPoint PPT presentation

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Title: Management Information Systems, Sixth Edition

Management Information Systems, Sixth Edition
  • Chapter 1
  • Business Information Systems
  • An Overview

  • 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
  • Describe how computers process data into useful
    information for problem solving and decision
  • Identify the functions of different types of
    information systems in business

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

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

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

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

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

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

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

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

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

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

Generating Information (continued)
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

Information in Context (continued)
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)

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

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
  • Subsystems can receive input from and transfer
    output to other subsystems

What is a System? (continued)
What is a System? (continued)
  • Closed system has no connections with other
  • Open system interfaces and interacts with other
  • 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

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

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

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

The Benefits of Human-Computer Synergy
Information Systems in Organizations
  • Information system consists of data, hardware,
    software, telecommunications, people, and
  • 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

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
  • Available, reliable, affordable, and fast
    communications links to the Internet
  • Growth of the Internet
  • Increasing computer literacy of the workforce

Information Systems in Organizations (continued)
Information Systems in Organizations (IS
Components View)
Information Systems
Information Systems in Organizations
(Organizational View another way of viewing IS)
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

The Four Stages of Processing (continued)
  • Output what is produced by the information
  • Output devices include printers and speakers
  • Storage maintaining vast amounts of data
  • Storage devices include optical discs

The Four Stages of Processing (Model View)
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

Computer Equipment for Information Systems
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).

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

Transaction Processing Systems
POS (Point-Of-Sale)
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

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

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

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

Decision Support and Expert Systems
  • Decision support system (DSS) supports decision
  • 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

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

Geographic Information Systems (continued)
Exercise No. 2
  • The links below are for Information Systems type
    of software
  • 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

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

  • 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

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

  • 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
  • Web provides opportunity to collect marketing
    data as well as promote products and services

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

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

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

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

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

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
  • Responsible for securing the database

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

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

  • 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

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)

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

Chief Information Officer and
Chief Technology Officer (continued)
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
  • 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

  • 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

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

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