Chapter 1 Business Information Systems: An Overview Management Information Systems, 4th Edition

Learning Objectives 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 Describe how different information systems serve different levels within an organization Management Information Systems, 4th Edition

Learning Objectives (Cont.) Evaluate how telecommunications and database technology can help implement the goals of information systems Recognize the role of information technology in e-commerce List major factors to consider when evaluating information systems and their roles in organizations Identify major ethical and societal conflicts created by widespread use of information systems Management Information Systems, 4th Edition

Information Systems Why Do People Need Information? Individuals: Entertainment and enlightenment Businesses: Decision making and problem solving Gathering Storing Manipulating Management Information Systems, 4th Edition 2

Data, Information, and Systems Data vs. Information Data A “given” or fact: a number, a statement, or a picture The raw materials in the production of information Information Data that have meaning within a context (a specific time & space) Raw data or data that have been manipulated Management Information Systems, 4th Edition

Data Manipulation Raw data Manipulated Data Time-consuming to read Difficult to understand Manipulated Data Provides useful information Management Information Systems, 4th Edition

Generating Information Raw data are processed in an IS to create final useful information Process: Manipulation of data Computer-based ISs: process data to produce information Management Information Systems, 4th Edition

Information: Important Resource Information must be useful Relevant Complete Accurate Current Cost effective in business Management Information Systems, 4th Edition

What Is a System? System: A set of components that work together to achieve a common goal Subsystem: One part of a system where the products of more than one system are combined to reach an ultimate goal Closed system: Stand-alone system that has no contact with other systems; no flow-ins or flow-outs Open system: System that interfaces with other systems Management Information Systems, 4th Edition

Systems and Subsystems Management Information Systems, 4th Edition

Information and Managers Systems thinking: Viewing organization in terms of suborganizations or subsystems – decomposition A framework for problem solving and decision making—conquering Managers focus on overall goals and operations of business—synthesizing Management Information Systems, 4th Edition

Information and Managers (Cont.) Systems thinking (Cont.) Information Map: data and information flow within an organization (工欲善其事) (key corporate resources: M.I.T.) Information Technology: all technologies that facilitate construction and maintenance of information systems (必先利其器) Management Information Systems, 4th Edition

The Benefits of Human-Computer Synergy Prerequisites? Synergy: combined resources produce output exceeding the sum of the outputs of the same resources employed separately Translates human thought into efficient processing of large amounts of data Management Information Systems, 4th Edition

Trends of information systems Power of computers increasing; prices dropping Increasing p/p (performance/price) ratio Increase in programming variety and ingenuity Internet access faster and more reliable Internet growth resulting in opportunities Increasing ratio of computer-literate workforce Management Information Systems, 4th Edition

Components of an Information System Management Information Systems, 4th Edition

The Four Stages of Data Processing Input: Data are collected and entered into computer Data processing: Data are manipulated into information using mathematical, statistical, and other tools Output: Information is displayed or presented Storage: Data and information are maintained for later use (for the 1st or 2nd order feedback loop) Management Information Systems, 4th Edition

Computer Equipment for Information System Input devices: introduce data into the IS Processor: manipulates data through the IS Output devices: display information Storage devices: store data and information Management Information Systems, 4th Edition

Input-process-output-storage devices Management Information Systems, 4th Edition

ISs: From Recording Transactions to Providing Expertise Transaction Processing Systems (TPS) Record data and perform basic processing Cash registers and ATMs Management Information Systems (MIS) Recorded transactions and other data produce information for problem solving and decision making Customer purchasing power analysis Management Information Systems, 4th Edition

Types of MISs Decision Support Systems (DSS) Contain models, or formulas, that manipulate data into information Often answer “what if?” questions, Scenario simulation Group Decision Support Systems (GDSS) Generate ideas, establish priorities, and reach decisions in group environment A case of Delphi method Management Information Systems, 4th Edition

Types of MISs (Cont.) Executive Information Systems (EIS) Can gather information from vast amounts of data for high-level executives Highly useful in control and planning Summarized report with highlights Expert Systems (ES) Programmed with human expertise Can help solve problems of unstructured nature Multiple criteria planning & the heuristic method (with the 2nd order feedback loop) Management Information Systems, 4th Edition

Types of MISs (Cont.) Geographic Information Systems (GIS) Represents local conditions or features Allows planning, decision-making, and monitoring of local conditions or activities On-demand Output Managers can obtain reports tailored to their needs at any time, or even anywhere Management Information Systems, 4th Edition

ISs in Functional Business Areas Accounting Record business transactions, produce periodic financial statements, and create reports required by law Finance Organize budgets, manage the flow of cash, analyze investments, and make decisions that could reduce interest payments and increase revenues Management Information Systems, 4th Edition

ISs in Functional Business Areas (Cont.) Marketing Analyze demand for various products in different regions and population groups Human Resources Help with record keeping and employee evaluation, training, and dispatching Management Information Systems, 4th Edition

ISs in Different Business Sectors Manufacturing Allocate resources such as personnel, raw material, and time Control inventory, process customer orders, prepare production schedules, perform quality assurance, and prepare shipping documents Management Information Systems, 4th Edition

ISs in Different Business Sectors (Cont.) Service ISs are often the backbone of service organizations E.g., quick response, FAQs, complain trace, etc. Retail Some retail stores (e.g., Wal-Mart, Sears) are now linked to communication networks by satellite Management can determine which items move quickly and which do not Returns arrangement Management Information Systems, 4th Edition

ISs in Different Business Sectors (Cont.) New Businesses ISs have made new products and services possible, such as credit reports and shipment tracking Interactive new product designing activities across multiple divisions Government Tax authorities, national insurance and welfare agencies, defense departments, economic organizations, immigration authorities β-version prototyping Management Information Systems, 4th Edition

Shared Data Resources Effective way to operate: different systems share data from the same pool Company’s database: one of the most powerful resources, a corporate asset Categorized and structured data can be manipulated to produce useful information Management Information Systems, 4th Edition

Shared Data Resources (Cont.) Management Information Systems, 4th Edition

E-Commerce Business-to-business and business-to- consumer transactions done electronically via networks Database management online makes information cheaper to distribute E-commerce is now synonymous with “doing business on the Internet” Management Information Systems, 4th Edition

Why Study IS? Knowledge Workers Degrees in IS Employers seek computer-literate professionals who know how to use information technology Degrees in IS Computer Science and Management Information Systems Information Systems Careers Systems analyst, specialist in enterprise resource planning (ERP), database administrator, telecommunications specialist, consulting, etc. Management Information Systems, 4th Edition

Ethical and Societal Issues The Not-So-Bright Side Consumer Privacy Organizations collect (and sometimes sell) huge amounts of data on individuals Employee Privacy IT supports remote monitoring of employees, violating privacy and creating stress Management Information Systems, 4th Edition

Ethical and Societal Issues The Not-So-Bright Side Freedom of Speech Opportunities increase for pornography, hate speech, intellectual property crime, and other intrusions Prevention may abridge free speech Management Information Systems, 4th Edition

Ethical and Societal Issues The Not-So-Bright Side IT Professionalism No mandatory or enforced code of ethics for IT professionals--unlike other professions Social Inequality Less than 20% of the world’s population have ever used a PC; less than 3% have Internet access Increasing gap or not? Management Information Systems, 4th Edition

Summary Information Systems are essential to business Data is processed into useful information for problem solving and decision making Information systems provide information for different levels within an organization There are major factors to consider when evaluating information systems Management Information Systems, 4th Edition