Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Chapter 18 Management Information Systems

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 2 Two Perspectives This chapter looks at information from two perspectives:  How the firm’s information systems and information technology are part of management.  How management information systems are used by managers.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 3 Information Related to MIS Management information systems provide access to important information used in  Planning process (chapter 5)  Decision making (chapter 6)  Human resource management (chapter 10)  Communication (chapter 15)  Control (chapter 16)  Operations management (chapter 17)

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 4 Data and Information Data—raw facts, such as the number of items sold or the number of hours worked in a department. Information—data that have been gathered and converted into a meaningful context. Useful information is:  High quality  Timely  Relevant  Comprehensive

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 5 Data and Information (continued) Databases—computer programs that assign multiple characteristics to data and allow users to sort the data by characteristic. Data warehouses—massive databases that contain almost all of the information about a firm’s operations. Data mining—the process of determining the relevant factors in the accumulated data to extract the data that are important to the user.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 6 Information Technology Technology is the means of transforming inputs into products. A firm’s information technology may incorporate its operations technology. Six Functions of Information Technology:  Captures data, Transmits data, Stores information, Retrieves information, Manipulates information, Displays information

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 7 The 6 Functions of IT CaptureObtain a representation of information in a form permitting it to be transmitted or stored TransmitMove information from one place to another StoreMove information to a specific place for later retrieval RetrieveFind the specific information that is currently needed ManipulateCreate new information from existing information through summarizing, sorting, rearranging, reformatting, or other types of calculations DisplayShow information to a person

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 8 Equipment Local area networks (LAN) link computers in a firm so users can share information Servers store information for users linked to them Wireless equipment—computers no longer require a physical connection, instead satellites or central locations create links

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 9 Computer Networks LAN The Internet is a network of networks. It provides:   Telnet connections with computers  File transfer protocols (FTP) to move files  World Wide Web provides access to protocols for text, documents, and images Extranets (wide area networks) link a company's employees, suppliers, customers, and other key business partners Intranets are internal networks that are private or semiprivate, access is limited to a firm's employees or certain employees

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 10 Types of Software Operating system software tells the computer hardware how to run Applications software is developed for a specific task Artificial intelligence performs tasks such as searching through data and Speech recognition software allows customers to speak numbers when placing orders over the phone

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 11 Enterprise Resource Planning (ERP) Software Combines all of a firm’s computerized functions into a single, integrated software program that runs off a single database. This allows various departments to easily share information and communicate with each other.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 12 ERP Implementation Reasons To integrate financial data by providing one set of numbers for the company’s finance department, sales department, and individual business units. To standardize manufacturing processes, so that a firm with multiple business units can save time, increase productivity, and reduce staff. To standardize human resources information about employees and communicating information about benefits and services.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 13 Information Ethics and Security Computer Ethics—The analysis of the nature and social impact of computer technology and the development of policies for its appropriate use. Security—Controlling access to and transmission of data and information contained in the firm’s network.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 14 Reasons for Computer Ethics Computer-generated errors are unlike human error Computers are able to communicated over the great distances at low cost Computers can store, copy, erase, retrieve, transmit, and manipulate huge amounts of information quickly and cheaply Computers can depersonalize originators, users, and subjects of programs and data Computers can use data created for one purpose for another purpose for long periods of time

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 15 Ten Commandments for Computer Ethics 1.Thou shalt not use a computer to harm other people. 2.Thou shalt not interfere with other people’s computer work. 3.Thou shalt not snoop around in other people’s files. 4.Thou shalt not use a computer to steal. 5.Thou shalt not use a computer to bear false witness.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 16 Ten Commandments for Computer Ethics (continued) 6.Thou shalt not use or copy software for which you have not paid. 7.Thou shalt not use other people’s computer resources without authorization. 8.Thou shalt not appropriate other people’s intellectual output. 9.Thou shalt think about the social consequences of the program you write. 10.Thou shalt use a computer in ways that show consideration and respect.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 17 Ways to Implement Security User names and passwords Encryption – use of software that scrambles data Firewalls – a combination of hardware and software that controls access to and transmission of data and information contained in a network

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 18 Information Systems Information systems combine computers, other hardware, software, and human resources to manipulate data into useable information. Operations information systems:  Process control systems  Office automation systems  Transaction-processing systems Expert systems

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 19 Management Information Systems Management information system (MIS): an information system that provides information to managers to use in making decisions. Types of MIS used by businesses:  Information reporting systems  Decision support systems  Group decision support systems  Executive information systems  Human resource information systems

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 20 MIS and Organizational Structure Flatter management hierarchies. Horizontal information flows now viable. Reduction in time to make management decisions. Reduction in the number of employees needed to perform many organizational activities. Elimination of barriers between departments.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 21 MIS and Competitive Advantage Improved decision making Increased organizational efficiency Greater responsiveness to customers:  Personalized customer service  Improved product support Enhanced entry to new markets Greater ability to enter joint ventures, partnerships, and strategic alliances The addition of e-commerce

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 22 Implementing MIS Consider the organization’s principle goals and information needs Evaluate current MIS for accuracy, reliability, timeliness, and relevance of information Create employee support for the change by showing how it will help employees Make the technology user-friendly Consider the human element

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Slide 23 Factors for Successful MIS Implementation User involvement Management support Time and cost evaluations Phased implementation Thorough testing Careful training and documentation System backup during the transition