Organizational Information Systems Why Are Computers the Heavy Artillery in Business? Chapter 14

©2003 The McGraw-Hill Companies Student Learning Outcomes 1.Describe the typical structure of an organization and the nature of information technology and information within it 2.Define the types of IT systems that help an organization track information 3.Discuss how management information systems and executive information systems support the needs of managers

©2003 The McGraw-Hill Companies Student Learning Outcomes 4.Describe how various technologies support organizational logistics 5.Define how technology can help an organization spread out nationally and around the globe

©2003 The McGraw-Hill Companies Introduction In this chapter, we’ll first look at the broad picture, including the nature and structure of an organization, decentralized computing and shared information, and characteristics of information. Your focus starts with a look internally at organizations and then expands to businesses spreading out nationally and around the globe.

©2003 The McGraw-Hill Companies Businesses: Computers and Technology Businesses use computers and technology as tools to gather, store, manage, and manipulate vitally important information. Information includes: Transactions with customers and other businesses Knowledge about the competition and other external forces Knowledge about how the business works internally

©2003 The McGraw-Hill Companies Broad View of Organizations, Business & Information p Fig. 14.1

©2003 The McGraw-Hill Companies 14.1 Organizations, Technology, and Information To manage an organization using technology: –Know nature of and structure of the business –Know the information requirements of employees –Know how technology supports the business

©2003 The McGraw-Hill Companies The Nature and Structure of the Organization Strategic management provides overall direction and guidance Tactical management develops goals and strategies outlined by strategic management Operational management directs day-to-day operations and implementation of the goals and strategies Nonmanagement employees perform productive daily activities

©2003 The McGraw-Hill Companies An Organization Structured According to Product Line p Fig. 14.2

©2003 The McGraw-Hill Companies Technology and Information How do organizations get technology and information into the hands of their employees? Decentralized computing Shared information

©2003 The McGraw-Hill Companies Decentralized Computing Empower employees through the use of technology Train employees to use technology in the most efficient and optimal way

©2003 The McGraw-Hill Companies Shared Information Concept that employees should have access to information –Information to perform job –Can obtain information when it is needed Data stored in large central and smaller departmentalized databases

©2003 The McGraw-Hill Companies Decentralized Computing and Shared Information p Fig. 14.3

©2003 The McGraw-Hill Companies Differing Information Needs Information Granularity People have different information needs according to their responsibilities –People at the highest level need more general information –Nonmanagement need the finest level of granularity p Fig. 14.4

©2003 The McGraw-Hill Companies Differing Information Needs Internal Information External Information Objective Information Subjective Information Information Attributes

©2003 The McGraw-Hill Companies Differing Information Needs The Flows of Information Information in organizations flows in various directions –Upward flow –Downward flow –Horizontal flow People with different responsibilities have different needs p Fig. 14.5

©2003 The McGraw-Hill Companies 14.2 Tracking Everything in Business Daily transactions are at the very heart of a business Systems are primary interface to customers Two primary computer systems for tracking daily transactions: –Transaction processing system –Computer-integrated system

©2003 The McGraw-Hill Companies Transaction Processing System p Fig. 14.6

©2003 The McGraw-Hill Companies Customer-Integrated System (CIS) Places technology in the hands of the customers Allows customers to process their own transactions Decentralizes computing power by putting power in the hands of the customer Also responsible for communicating information Example: ATMs

©2003 The McGraw-Hill Companies Customer-Integrated System p Fig. 14.7

©2003 The McGraw-Hill Companies 14.3 What Managers Need to Know Managers have many responsibilities –Identify and solve problems –Identify and take advantage of opportunities Must constantly monitor surroundings Computer systems for managerial responsibilities: –Management information systems –Executive information systems

©2003 The McGraw-Hill Companies Computer Systems Used by Managers Management Information Systems Executive Information Systems

©2003 The McGraw-Hill Companies Management Information System MIS a system that provides periodic and predetermined reports that summarize information Processes and creates new information Also called management alerting systems p Fig. 14.8

©2003 The McGraw-Hill Companies Types of Management Information System Reports Exception Report Summarized Report Periodic Report Comparative Report

©2003 The McGraw-Hill Companies Executive Information System EIS a highly interactive MIS –Helps managers solve problems & identify opportunities Creates new information and presents it to user Can perform "What if?" analysis p Fig

©2003 The McGraw-Hill Companies Executive Information System Allows you to "drill down" through information Can better determine causes of problems Can better determine how to take advantage of opportunities What is meant by "drill down"?

©2003 The McGraw-Hill Companies With EIS, you can "drill down" through information Obtaining Information p Fig

©2003 The McGraw-Hill Companies 14.4 Support for Organizational Logistics Businesses need to distribute information Computer systems help businesses to operate without regard to…  SimNet Concepts Support CD: “CAD Applications” and “Financial Management Applications” Location of Suppliers Location of Customers Location of Employees

©2003 The McGraw-Hill Companies Intranet Internal (private) organizational Internet Guarded against outside access by special security called a firewall p Fig

©2003 The McGraw-Hill Companies Letting Your Suppliers and Customers Inside Your Intranet Extranet –Extension of an intranet –Allows other people and other organizations to access information and application software on an internal intranet Common application for businesses that have other organizations as customers

©2003 The McGraw-Hill Companies Web, Extranet and Intranet Working Together Intranets and extranets will become commonplace as more businesses move to e-commerce p Fig  SimNet Concepts Support CD: “Intranets and Extranets”

©2003 The McGraw-Hill Companies Supporting Teams with Groupware Workgroup support system (WSS) –Improves the performance of teams –Supports the sharing and flow of information Team members can be in the same office or spread out around the globe Supports organizational logistics Foundation of WSS is groupware (software component that supports team efforts)

©2003 The McGraw-Hill Companies Popular Workgroup Support Systems Lotus Notes/Domino Novell Groupwise Microsoft Exchange NetSys WebWare

©2003 The McGraw-Hill Companies Supporting Teams with Groupware p Fig

©2003 The McGraw-Hill Companies Team Dynamics Electronic bulletin board Group scheduling software Electronic meeting software Videoconferencing software Whiteboard software p Fig

©2003 The McGraw-Hill Companies Document Management Document management is critical Group document database: –Powerful storage facility for organizing and managing all documents related to specific teams –Organizationwide group document database may include documents from many different teams – some of which may be shared among many of the teams –Supports many levels of security to control access to documents

©2003 The McGraw-Hill Companies Group Document Database p Fig

©2003 The McGraw-Hill Companies Applications Development Groupware suites have software development tools that make building applications quick Tools come in the form of prewritten applications and actual programming tools and languages

©2003 The McGraw-Hill Companies 14.5 Spreading Out Nationally and Around the Globe Very few businesses are local May have national and international… Competition Suppliers Employees Customers Affect Local Business

©2003 The McGraw-Hill Companies Telecommuting Business innovation supported by technology Use of various technologies to allow employees to work in a place other than a central location Telecommuters Telecommuting is big business and expected to grow rapidly

©2003 The McGraw-Hill Companies Industries Planning to Implement Telecommuting p Fig

©2003 The McGraw-Hill Companies Five Questions to Answer Before Implementing Telecommuting WhyWhoWhat How Wher e

©2003 The McGraw-Hill Companies When considering telecommuting in your organization, ask yourself these five questions: p Fig Telecommuting

©2003 The McGraw-Hill Companies Transnational Firms Produces and sells products and services all over the world Difficult to know firm's home country Faces cultural challenges

©2003 The McGraw-Hill Companies Business Benefits to Operating Internationally Gain access to a larger market of customers Utilize a larger workforce that may be cheaper than in the home country Tap into the intellectual expertise of a workforce in a given country

©2003 The McGraw-Hill Companies Transborder Data Flows Transnational firms must consider their information and technology assets as they operate around the world Transborder data flows deal with data and the technology that supports the movement of information As organizations move information around the globe they must: –Must consider political and legal barriers –Consider the quality and type of technology

©2003 The McGraw-Hill Companies

14.6 Key Terms Customer-integrated system (CIS) Decentralized computing Executive information system (EIS) External information Extranet Groupware Internal information Intranet Management information system (MIS) Objective information Operational management

©2003 The McGraw-Hill Companies 14.6 Key Terms Shared information Subjective information Tactical management Telecommuter Telecommuting Transaction processing system (TPS) Transnational firm Workgroup support system (WWS)

©2003 The McGraw-Hill Companies Review of Concepts 1.Identifying Responsibilities of IT Systems  What’s primary and what’s secondary? 2.Identifying Information Types for a Convenience Store 3.Identifying Report Features within a Management Information System  Summarized, periodic, exception, and comparative

©2003 The McGraw-Hill Companies Hands On Projects E-Commerce 1.Doing Business with the Federal Government 2.Reading Books Online 3.Putting Your Book on the Web  Are you an aspiring writer?

©2003 The McGraw-Hill Companies Hands On Projects Ethics, Security & Privacy 1.Do Organizations Really Trust You to Provide Accurate Information?  Do you count your change? 2.The Ethics of Business Process Reengineering  Do businesses have responsibilities to displaced employees?

©2003 The McGraw-Hill Companies Hands On Projects on the Web 1.Researching Groupware 2.Researching Your School’s Education Delivery Tool 3.Learning about Quality Awards 4.Illustrating Executive Information Systems “Drilling Down”

©2003 The McGraw-Hill Companies Hands On Projects Group Activities 1.Comparing Self-Scanning Systems at a Grocery Store and ATMs  Which is easier to use? Why? 2.Building Management Information Systems Reports 3.Types of Information for Setting Interest Rates