Chapter 15: Information Management Systems © 2008 Thomson/South-Western All rights reserved.

Learning Objectives After reading and studying this chapter, you should be able to: Describe the seven characteristics of useful information Describe the three functions of an effective information system (IS) Describe the five guidelines for establishing an information system (IS) Describe the basic functions of a computerized information system (CIS) Describe the two basic data-processing modes

Learning Objectives (Cont.) After reading and studying this chapter, you should be able to: Discuss the various methods used for linking computer systems Explain the purposes of decision support systems (DSSs) Discuss the four challenges that must be met by managers of an information system

Information Management Systems Technology Manual and electronic means for creating and handling intellectual capital and facilitating organizational communication Information System An organizational subsystem enabling an organization to share intellectual capital and create and maintain a working environment in which employees can exploit it

Information and the Manager Data Unprocessed facts and figures Information Data that have been deliberately selected, processed, and organized to be useful to an individual manager Digital Data Data expressed as a string of 0’s and 1’s and transmitted or stored with electronic technology, usually computers and the Internet

Figure 15.1 Characteristics of useful information Understandable Reliable Relevant Complete Concise Timely Cost-effective

Management Information Systems 2 Management Information System (MIS) A subsystem within an organization’s IS designed to serve the specific information needs of all decision makers A formal collection of processes that provides managers with quality information to allow them to make decisions, solve problems, and carry out their functions and operations effectively and efficiently Functions of an Effective Information System (IS) 1 3 Assist organizations and their members in achieving their objectives 2 Facilitate information access. Facilitate information flow.

Figure 15.2 A simplified MIS for an oil company

Guidelines for Developing an Information System (IS) 3 Guidelines for establishing an IS Involve users in the system’s design Establish clear lines of authority and leadership for the IS personnel Establish clear procedures for gathering, sorting, interpreting, displaying, storing, and distributing data, and for interacting with the system. Where technical specialists are used, ensure that both they and the people they support fully understand each specialist’s function and role. Build an IS and MIS staff of sufficient quantity and with sufficient skills needed to adequately provide services.

Computerized Information Systems 4 Computerized Information System (CIS) An MIS built on computer hardware and software to collect and process data and store and disseminate the resulting information The Basic Function of a CIS Computer operations Application maintenance System programming Data management Data entry Communication management Application development End-user computing

Evolution of the Computer 1960s Used by banks to automate check processing 1970s/80s Used to send and receive purchase orders, invoices, and shipping notifications 1980s Enabled engineers to work on design specifications, drawings, etc. 1990s Made electronic commerce affordable. Enabled company communication networks

Figure 15.3 The basic function of a CIS 4 FUNCTION DESCRIPTION Computer Operations Runs the system; involves starting jobs, mounting the proper input and output volumes, and responding to problem conditions System Programming Installs and maintains the operating system and associated system software Data Entry Enters data in machine-readable form Application Program Development Writes new application systems Application Program Maintenance Corrects and updates existing application systems Data Management Assures data security, access, integrity, and usability Communications Management Configures and maintains the network End-User Computing Helps and educates users Source: From Managing an Information System by James R. Mensching and Dennis A. Adams, p. 56. © 1991 by Prentice Hall Inc. Reprinted by permission of Pearson Education Inc. Upper Saddle River, NJ, 97458.

Computerized Information Systems (cont’d) Data Center A unit of a decentralized CIS that operates to serve its unit’s members with their own sets of hardware, software, and specialists (machine operators and programmers) End-user Computing The use of information technology (IT) by people who are not controlled and directed by top management Office Automation System (OAS) A collection of technologies to operate offices efficiently Database A collection of computerized data arranged for ease and speed of retrieval; sometimes called a data bank

Computer Operations Operating System Application Program An extensive and complex set of instructions that manages the operation of a computer and the application programs that run on it Application Program A computer program designed to execute specific sets of tasks such as word processing

Transactional Processing Transaction Processing System (TPS) Data Processing Modes 5 Batch Processing A computer procedure in which data are collected over time and entered into databases according to prescribed policies and procedures Transactional Processing Data are received about a company’s ongoing operations and entered into data banks as each transaction occurs Transaction Processing System (TPS) A computer-based information system of a company’s routine business activities

Linking Computer Systems 6 Networking The electronic linking of two or more computers Protocols: SMTP E-Mail NNTP Usenet news groups FTP File transfer DNS Server exchange World Wide Web HTML and HTTP

Decision Support System CIS Management Tools 7 Decision Support System (DSS) A specialized variant of a CIS; an analytic model that joins a manager’s experience, judgment, and intuition with the computer’s data access, display, and calculation processes; allows managers to interact with linked programs and databases via the keyboard Expert System A specialized end-user decision support program that stores the knowledge of a group of authorities for access by nonexperts faced with the need to make topic-related decisions

CIS Management Tools (cont’d) 7 Artificial Intelligence (AI) The ability of a machine to perform those activities that are normally thought to require intelligence; giving machines the capability to learn, sense, and think for themselves Knowledge Management (KM) The merging of a company’s human and technical knowledge assets Group Decision Support System (GDSS) A variant decision support system that allows groups focusing on a problem to interact with one another and to exchange information, data, and ideas

Figure 15.4 Knowledge Management at Xerox

CIS Management Tools (cont’d) 7 Executive Information System (EIS) A decision support system custom designed to facilitate executive decision making; may include forecasting, strategic planning, and other elements Enterprise Resource Planning (ERP) System A broad-based software system that integrates multiple data sources and ties together the various processes of an enterprise to enable information to flow more smoothly

Figure 15.5 Information systems and users

Managing Information Systems 8 Challenges Deciding what operations to keep and what to outsource Evaluating the results of the system’s operations Enabling employees to use the system Overcoming resistance to new and different

Key Terms application program expert system artificial intelligence (AI) batch processing computerized information system (CIS) data data center database decision support system (DSS) digital end-user computing enterprise resource planning (ERP) system executive information system (EIS) expert system group decision support system (GDSS) information information system (IS) information technology (IT) knowledge management (KM) management information system (MIS) networking operating system transactional processing transaction processing system (TPS)