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

Management Information Systems, 4 th Edition 2 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, 4 th Edition 3 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, 4 th Edition 4 Information Systems Why Do People Need Information? –Individuals: Entertainment and enlightenment –Businesses: Decision making and problem solving Gathering Storing Manipulating

Management Information Systems, 4 th Edition 5 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 Raw data or data that have been manipulated

Management Information Systems, 4 th Edition 6 Raw data –Time-consuming to read –Difficult to understand Manipulated Data –Provides useful information Data Manipulation

Management Information Systems, 4 th Edition 7 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, 4 th Edition 8 Information: Important Resource Information must be useful –Relevant –Complete –Accurate –Current –Cost effective in business

Management Information Systems, 4 th Edition 9 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 Open system: System that interfaces with other systems

Management Information Systems, 4 th Edition 10 Systems and Subsystems

Management Information Systems, 4 th Edition 11 Information and Managers Systems thinking: –Viewing organization in terms of suborganizations or subsystems –A framework for problem solving and decision making –Managers focus on overall goals and operations of business

Management Information Systems, 4 th Edition 12 Information and Managers (Cont.) Systems thinking (Cont.) –Information Map: data and information flow within an organization –Information Technology: all technologies that facilitate construction and maintenance of information systems

Management Information Systems, 4 th Edition 13 The Benefits of Human-Computer Synergy 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, 4 th Edition 14 Information Systems in Organizations Data Hardware Software People Procedures

Management Information Systems, 4 th Edition 15 Trends Power of computers increasing; prices dropping 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, 4 th Edition 16 Components of an Information System

Management Information Systems, 4 th Edition 17 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

Management Information Systems, 4 th Edition 18 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, 4 th Edition 19 Input-process-output-storage devices

Management Information Systems, 4 th Edition 20 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

Management Information Systems, 4 th Edition 21 Types of MISs Decision Support Systems (DSS) –Contain models, or formulas, that manipulate data into information –Often answer “what if?” questions Group Decision Support Systems (GDSS) –Generate ideas, establish priorities, and reach decisions in group environment

Management Information Systems, 4 th Edition 22 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 Expert Systems (ES) –Programmed with human expertise –Can help solve problems of unstructured nature

Management Information Systems, 4 th Edition 23 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

Management Information Systems, 4 th Edition 24 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, 4 th Edition 25 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

Management Information Systems, 4 th Edition 26 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, 4 th Edition 27 ISs in Different Business Sectors (Cont.) Service –ISs are often the backbone of service organizations 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

Management Information Systems, 4 th Edition 28 ISs in Different Business Sectors (Cont.) New Businesses –ISs have made new products and services possible, such as credit reports and shipment tracking Government –Tax authorities, national insurance and welfare agencies, defense departments, economic organizations, immigration authorities

Management Information Systems, 4 th Edition 29 Shared Data Resources Effective way to operate: different systems share same data from same pool Company’s database: one of the most powerful resources Categorized and structured data can be manipulated to produce useful information

Management Information Systems, 4 th Edition 30 Shared Data Resources (Cont.)

Management Information Systems, 4 th Edition 31 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, 4 th Edition 32 Why Study IS? Knowledge Workers –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, 4 th Edition 33 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, 4 th Edition 34 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, 4 th Edition 35 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

Management Information Systems, 4 th Edition 36 Business Information Systems: An Overview Information Systems Data, Information, and Systems ISs: From Recording Transactions to Providing Expertise Information Systems in Business Shared Data Resources E-Commerce Why Study IS? Ethical and Societal Issues The Not-So-Bright Side

Management Information Systems, 4 th Edition 37 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