1. Management Information Systems
Faculty of Business, Finance, and Hospitality
Prepared by: Teo Siew
Copyright© 2017 MAHSA UNIVERSITY

2. Objectives Explain why information technology matters
Define digital information and explain why digital systems are so powerful and useful
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 in business
Identify major ethical and societal concerns created by widespread use of information technology

3. Does Information Technology Matter?
Examples of IT applied by businesses
Social media for engaging customers
Mobile banking
Today’s business professionals must know how to develop and use IT

4. The Power of Digital Systems
Binary counting system uses only two digits: and 1
Digital systems: computers and devices that use the binary system
Can represent any information as a combination of zeroes and ones
Information can be represented, stored, communicated, and processed digitally

5. The Power of Digital Systems (cont’d.)
Digital information is stored and communicated by means of electromagnetic signals
Extremely fast
Exact copy of the original is possible
Accuracy and speed make digital systems powerful, useful, and important

6. The Purpose of Information Systems
Businesses use information systems to:
Make sound decisions
Solve problems
Problem: any undesirable situation
Decision: arises when more than one solution to problem exists
Both problem solving and decision making require information

7. The Purpose of Information Systems (cont’d.)
Keys to success in business
Gathering correct information efficiently
Storing information
Using information
Information systems support daily operations

8. Data, Information, and Information Systems
Commonly used terms
Data
Information
System
Important to understand similarities and differences among terms

9. Data vs. Information Data: a given or fact
Can be number, statement, or picture
Is the raw material in the production of information
Information: facts or conclusions that have meaning within context
Composed of data that has been manipulated

10. Data Manipulation Survey is common method of collecting data
Reading data can be extremely time consuming
Manipulating the data may provide valuable information
Examples: categorizing and producing statistics
May be applied to marketing and manufacturing practices

11. Generating Information
Process: the manipulation of data
Usually produces information
May produce more data
A piece of information (output of a process) in one context may be considered data (input to a process) in another context

12. Figure 1.1 Input-process-output © Cengage Learning 2015

13. Information in Context
Not all information is useful
Characteristics of useful information
Relevant
Complete
Accurate
Current
Economical

14. What Is a System?
System: array of components that work together to achieve goal or goals
A system:
Accepts input
Processes input
Produces output

15. What is a System? (cont’d.)
Characteristics of a system:
May have multiple goals
May contain subsystems
Subsystem: component of a larger system
Has subgoal that contributes to main goal
Can receive input from and transfer output to other subsystems

16. Figure 1.3 Several subsystems make up this corporate accounting system © Cengage Learning 2015

17. What is a System? (cont’d.)
Closed system: has no connections with other systems
Open system: interfaces and interacts with other systems
Often a subsystem of a bigger system
Subsystems by definition are always open
Information system (IS): all components that work together to process data and produce information

18. Information and Managers
Systems thinking: considering an organization in terms of subsystems
Powerful management approach that creates a framework for problem solving and decision making
Helps keep managers focused on overall goals
Database: collection of electronic records
Information systems automate information exchange among subsystems

19. Information and Managers (cont'd.)
Information map: description of data and information flow within an organization
Shows a network of information subsystems that exchange information with each other and with the outside world
Information technology: technologies that facilitate construction and maintenance of information systems

20. Information Systems in Organizations
Consist of data, hardware, software, telecommunications, people, and procedures
Computer-based information system includes one or more computers at its center
Computers collect, store, and process data into information
People give instructions via computer programs

21. Figure 1.4 Components of an information system © Cengage Learning 2015

22. Information Systems in Organizations (cont’d.)
Trends that have made information systems (ISs) important in business
Growing capacity and decreasing costs of data storage devices
Increasing variety and ingenuity of computer programs
Cloud computing capabilities

23. Information Systems in Organizations (cont'd.)
Trends that have made ISs important in business (cont’d.)
Affordable Software as a Service (SaaS) applications due to
Quick, reliable communication lines
Internet and web access
Growth of the Internet
Increasing computer literacy of the workforce
Organizations must continuously upgrade IS features and employee skills

24. The Four Stages of Processing
Input: enter data into the IS
Transaction: a business event, usually entered as input
Transaction processing system (TPS): a system that records transactions
Input devices include keyboards, bar code readers, voice recognition systems, and touch screens
Processing: changing and manipulating the data

25. The Four Stages of Processing (cont’d.)
Output: get information out of the IS
Output devices include printers and speakers
Storage: maintaining vast amounts of data and information
Storage devices include optical discs

26. Computer Equipment for Information Systems
Different technologies are used to support the four data processing functions
Input devices: receive input
Computers: process data
Output devices: display information
Storage devices: store data
Network devices and communication lines: transfer data
Telecommunications: communication that occurs between computers over distances

27. Figure 1. 5 Input, process, output, storage and networking devices
Figure 1.5 Input, process, output, storage and networking devices © Cengage Learning 2015

28. From Recording Transactions to Providing Expertise
Different types of information systems serve different functions
Capabilities of applications have been combined and merged
Management Information Systems (MISs) support management activities
Planning, controlling, and making decisions

29. Transaction Processing Systems
Transaction processing system (TPS): most widely used ISs
Records data collected at point where organization transacts business with other parties
Point-of-sale (POS) machines: record sales
Include cash registers, ATMs, and purchase order systems

30. Supply Chain Management (SCM) Systems
Supply chain: sequence of activities involved in producing and selling products or services
For products, activities include:
Marketing, purchasing raw materials, manufacturing and assembly, packing and shipping, billing, collection, and after-sale services
For services, activities include:
Marketing, document management, and monitoring customer portfolios

31. SCM Systems (cont’d.) SCM systems support supply chain activities
Also known as enterprise resource planning systems
SCM systems eliminate the need to reenter data captured elsewhere in the organization
Enterprise application: separate business process subsystems connected to form one large IS

32. Customer Relationship Management (CRM) Systems
CRM systems help manage relations with customers
Used in combination with telephones to provide customer service
Often linked to Web applications that track online transactions
Retaining loyal customers is less expensive than acquiring new ones

33. Business Intelligence (BI) Systems
BI systems glean relationships and trends from raw data to help organization compete
Often contain statistical models
Access large pools of data
Data warehouse: large database that usually stores transactional records

34. Decision Support Systems (DSSs) and Expert Systems (ESs)
DSS: supports decision making
Relies on models to produce tables
Extrapolates data to predict outcomes
Helps answer “What if?” questions
ES: supports knowledge-intensive decision making
Uses artificial intelligence techniques
Can preserve the knowledge of retiring experts

35. Geographic Information Systems (GIS)
GIS: ties data to physical locations
Represents data on a map in different formats
May reflect demographic information in addition to geographic information
May use information from global positioning system (GPS) satellites
Examples: Google Earth, Mapquest

36. Information Systems in Business Functions
Functional business area: services within a company that support main business
Includes accounting, finance, marketing, human resources, etc.
Part of a larger enterprise system

37. Accounting Accounting information systems: Help record transactions
Produce periodic statements
Create required reports for law
Create supplemental reports for managers
Contain controls to guarantee adherence to standards

38. Finance Finance systems:
Facilitate financial planning and business transactions
Tasks include organizing budgets, managing cash flow, analyzing investments, and making decisions

39. Marketing
Marketing’s purpose is to pinpoint likely customers and promote products
Marketing information systems help:
Analyze demand for products in regions and demographic groups
Identify trends in demand for products/services
Determine how advertising campaigns affect profit
Web provides opportunity to collect marketing data as well as promote products and services

40. Human Resources Human resource (HR) management systems assist in:
Record-keeping
Employee evaluation
Employee benefits

41. Web-Empowered Enterprises
E-commerce: buying and selling goods and services through Internet
Internet is a vast network of computers connected globally
Web has a profound impact on information systems
A place to conduct e-commerce
An emerging advertising medium
© Cengage Learning 2015

42. Figure 1.6 Traits of a successful CIO © Cengage Learning 2015

43. Summary
Business professionals are expected to know how to develop and use IT
Computer-based information systems pervade almost every aspect of our lives
A system is a set of components that work together to achieve a common goal
Subsystem: a system performs a limited task that produces an end result, which must be combined with other products from other systems to reach an ultimate goal

44. Summary (cont’d.) Data processing has four stages
Any IS that helps in management is a management information system (MIS)
Many different types of ISs
Enterprise application systems (SCM or ERP) tie together different functional areas of a business
ISs are used in many business functions, including accounting, finance, marketing, and human resources

45. Summary (cont’d.)
IT has created societal concerns regarding privacy, identity theft, spam, and Web annoyances

46. Reference:
Kenneth J. Sousa & Effy Oz, (2015) Management Information Systems. 7th Edition. Cengage Learning