Management information systems sixth edition
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Management Information Systems, Sixth Edition. Chapter 1 Business Information Systems: An Overview. Objectives. Explain why information technology matters Define digital information and explain why digital systems are so powerful and useful

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Management information systems sixth edition

Management Information Systems, Sixth Edition

Chapter 1

Business Information Systems:

An Overview


Objectives

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

Management Information Systems, Sixth Edition


Objectives continued

Objectives (continued)

Describe careers in information technology

Identify major ethical and societal concerns created by widespread use of information technology

Management Information Systems, Sixth Edition


Does information technology matter

Does Information Technology Matter?

  • Hackett Group study: “Does IT Matter? Hackett Concludes the Answer is Yes”

    • World’s best performing companies spent 7% more per employee on IT than typical companies

    • They recouped the investment fivefold in lower operational costs

  • Today’s business professionals must know how to develop and use IT

Management Information Systems, Sixth Edition


The power of digital systems

The Power of Digital Systems

  • Binary counting system uses only two digits: 0 and 1

  • Digital systems:

    • Computers and devices that use the binary system

    • Can represent any information as a combination of zeros and ones

  • Information can be represented, stored, communicated, and processed digitally

Management Information Systems, Sixth Edition


The power of digital systems continued

The Power of Digital Systems (continued)

  • Digital information is stored and communicated by means of electromagnetic signals

    • Extremely fast

    • Digital copy is an exact copy of the original

  • Accuracy and speed make digital systems powerful, useful, and important

Management Information Systems, Sixth Edition


The purpose of information systems

The Purpose of Information Systems

  • Businesses use information systems

    • To make sound decisions

    • To solve problems

  • Problem: any undesirable situation

  • Decision: arises when more than one solution to problem exists

  • Both problem solving and decision making require information

Management Information Systems, Sixth Edition


The purpose of information systems continued

The Purpose of Information Systems (continued)

  • Keys to success in business:

    • Gathering correct information efficiently

    • Storing information

    • Using information

  • Purpose of information systems is to support these activities

Management Information Systems, Sixth Edition


Data information and information systems

Data, Information, and Information Systems

  • “Data,” “information,” and “system” are commonly used terms

  • Important to understand their similarities and differences

Management Information Systems, Sixth Edition


Data vs information

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

Management Information Systems, Sixth Edition


Data manipulation

Data Manipulation

  • Data is manipulated to make useful information

    • New information can be generated from data, such as averages, trends, etc.

  • Survey is common method of collecting data

  • Raw data is hard to read

  • Information is more useful to business than data

Management Information Systems, Sixth Edition


Generating information

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

Management Information Systems, Sixth Edition


Generating information continued

Generating Information (continued)

Management Information Systems, Sixth Edition


Information in context

Information in Context

  • Not all information is useful

  • To be useful, information must be:

    • Relevant

    • Complete

    • Accurate

  • In business, information must also be:

    • Current

    • Obtained in a cost-effective manner

Management Information Systems, Sixth Edition


Information in context continued

Information in Context (continued)

Management Information Systems, Sixth Edition


What is a system

What Is a System?

  • System: array of components that work together to achieve goal or goals

  • System

    • Accepts input

    • Processes input

    • Produces output

Management Information Systems, Sixth Edition


What is a system continued

What is a System? (continued)

  • System may have multiple goals

  • System may contain subsystems

  • Subsystem: component of a larger system

  • Subsystems have subgoals that contribute to main goal

  • Subsystems can receive input from and transfer output to other subsystems

Management Information Systems, Sixth Edition


What is a system continued1

What is a System? (continued)

Management Information Systems, Sixth Edition


What is a system continued2

What is a System? (continued)

  • 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): components that work together to process data and produce information

Management Information Systems, Sixth Edition


Information and managers

Information and Managers

  • Systems thinking: thinking of 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 exchange of information among subsystems

Management Information Systems, Sixth Edition


Information and managers continued

Information and Managers (continued)

  • 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

Management Information Systems, Sixth Edition


The benefits of human computer synergy

The Benefits of Human-Computer Synergy

  • Humans are relatively slow and make mistakes

  • Computers cannot make decisions unless programmed to do so

  • Synergy: combining resources to produce output that exceeds the sum of outputs of the separate resources by themselves

  • Human-computer combination allows human thought to be translated into efficient processing of data

Management Information Systems, Sixth Edition


The benefits of human computer synergy continued

The Benefits of Human-Computer Synergy (continued)

Management Information Systems, Sixth Edition


Information systems in organizations

Information Systems in Organizations

  • Information system consists of data, hardware, software, telecommunications, people, and procedures

  • Computer-based Information system: system with one or more computers at center

  • Organizations lag behind and lose competitiveness if they do not use information systems

Management Information Systems, Sixth Edition


Information systems in organizations continued

Information Systems in Organizations (continued)

  • Trends that have made information systems important in business:

    • Growing power and decreasing cost of computers

    • Growing capacity and decreasing costs of data storage devices

    • Increasing variety and ingenuity of computer programs

    • Available, reliable, affordable, and fast communications links to the Internet

    • Growth of the Internet

    • Increasing computer literacy of the workforce

Management Information Systems, Sixth Edition


Information systems in organizations continued1

Information Systems in Organizations (continued)

Management Information Systems, Sixth Edition


The four stages of processing

The Four Stages of Processing

  • Input: collect and introduce data to system

    • 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, touch screens

  • Data processing: perform calculations on input

Management Information Systems, Sixth Edition


The four stages of processing continued

The Four Stages of Processing (continued)

  • Output: what is produced by the information system

    • Output devices include printers and speakers

  • Storage: maintaining vast amounts of data

    • Storage devices include optical discs

Management Information Systems, Sixth Edition


Computer equipment for information systems

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: transfer data

  • Telecommunications: communication that takes place between computers over great distances

Management Information Systems, Sixth Edition


Computer equipment for information systems continued

Computer Equipment for Information Systems (continued)

Management Information Systems, Sixth Edition


From recording transactions to providing expertise types of information systems

From Recording Transactions to Providing Expertise: Types of Information Systems

  • Different types of information systems serve different functions

  • Capabilities of applications have been combined and merged

  • Management Information System: a system that supports planning, control, and making decisions

Management Information Systems, Sixth Edition


Transaction processing systems

Transaction Processing Systems

  • Transaction processing system (TPS): most widely used type of system

    • Records data collected at point where organization transacts business with other parties

  • Point-of-sale machines: record sales

    • Include cash registers, ATMs, and purchase order systems

Management Information Systems, Sixth Edition


Supply chain management systems

Supply Chain Management 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

Management Information Systems, Sixth Edition


Supply chain management systems continued

Supply Chain Management Systems (continued)

Supply chain management (SCM) systems: systems that support these activities

Also known as enterprise resource planning systems

SCM systems eliminate the need to reenter data that was captured elsewhere in the organization

An SCM is an enterprise application

Management Information Systems, Sixth Edition


Customer relationship management systems

Customer Relationship Management Systems

  • Customer relationship management (CRM) systems: systems for managing 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

Management Information Systems, Sixth Edition


Business intelligence systems

Business Intelligence Systems

  • Business intelligence (BI) systems: systems that 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 store transactional records

Management Information Systems, Sixth Edition


Decision support and expert systems

Decision Support and Expert Systems

  • Decision support system (DSS): supports decision making

    • Relies on models to produce tables

    • Extrapolates data to predict outcomes

    • Helps answer “What if?” questions

  • Expert system (ES): supports knowledge-intensive decision making

    • Uses artificial intelligence techniques

    • Can preserve the knowledge of retiring experts

Management Information Systems, Sixth Edition


Geographic information systems

Geographic Information Systems

  • Geographic information system (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

Management Information Systems, Sixth Edition


Geographic information systems continued

Geographic Information Systems (continued)

Management Information Systems, Sixth Edition


Information systems in business functions

Information Systems in Business Functions

  • Functional business area: services within a company that support main business

    • Includes accounting, finance, marketing, and human resources

    • Part of a larger enterprise system

Management Information Systems, Sixth Edition


Accounting

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

Management Information Systems, Sixth Edition


Finance

Finance

  • Finance systems:

    • Facilitate financial planning and business transactions

  • Tasks include organizing budgets, managing cash flow, analyzing investments, and making decisions

Management Information Systems, Sixth Edition


Marketing

Marketing

  • Marketing’s purpose is to pinpoint likely customers and promote products

  • Marketing information systems:

    • Analyze demand for products in regions and demographic groups

    • Identify trends in demand for products/services

    • Help analyze how advertising campaigns affect profit

  • Web provides opportunity to collect marketing data as well as promote products and services

Management Information Systems, Sixth Edition


Human resources

Human Resources

  • Human resource management systems aid record-keeping

    • Must keep accurate records

    • Aids recruiting, selection, placement, benefits analysis, requirement projections

  • Performance evaluation systems provide grading utilities

Management Information Systems, Sixth Edition


Web empowered enterprises

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

    • An emerging advertising medium

    • A place to conduct e-commerce

Management Information Systems, Sixth Edition


Careers in information systems

Careers in Information Systems

  • Information technology professionals are increasingly in demand

  • Network administrator, system administrator, system analyst, software engineering, data communications analyst, and database administrator jobs are increasing in demand

Management Information Systems, Sixth Edition


Help desk technician

Help Desk Technician

  • Help desk technician:

    • Supports end users in their daily use of IT

    • Often provides help via telephone

    • May use software that gives them control of the user’s PC

    • May need to have knowledge of a wide variety of PC applications

Management Information Systems, Sixth Edition


Systems analyst

Systems Analyst

  • Systems analyst:

    • Researches, plans, and recommends software and systems choices

    • Responsible for developing cost analyses, design considerations, implementation timelines, and feasibility studies

  • Involves analyzing system requirements, documenting development efforts, and providing specifications for programmers

  • Requires communication and presentation skills

Management Information Systems, Sixth Edition


Database administrator

Database Administrator

  • Database administrator (DBA): responsible for databases and data warehouses

    • Develops and acquires database applications

    • Must adhere to federal, state, and corporate regulations to protect privacy of customers and employees

    • Responsible for securing the database

Management Information Systems, Sixth Edition


Network administrator

Network Administrator

  • Network administrator: acquires, implements, manages, maintains, and troubleshoots networks

  • Implements security

    • Firewalls

    • Access codes

Management Information Systems, Sixth Edition


System administrator

System Administrator

  • System administrator: manages an organization’s computer operating systems

    • Must ensure that operating systems work together, support business requirements, and function properly

    • Responsible for backup and recovery, adding and deleting user accounts, performing system upgrades

Management Information Systems, Sixth Edition


Webmaster

Webmaster

  • Webmaster: creates and maintains Web site

    • Must be familiar with Web transaction software, payment-processing software, security software

    • Manages both the intranet and extranet

  • Demand for Webmasters grows as more businesses use Web

Management Information Systems, Sixth Edition


Chief security officer

Chief Security Officer

  • Chief security officer (CSO): supervises security of information system

  • Position exists due to growing threat to information security

  • Usually reports to chief information officer (CIO)

Management Information Systems, Sixth Edition


Chief information officer and chief technology officer

Chief Information Officer and Chief Technology Officer

  • Chief information officer (CIO): responsible for all aspects of information system

    • Often a corporate vice president

    • Must have technical understanding of information technologies as well as business knowledge

  • Chief technology officer (CTO): has similar duties as CIO

Management Information Systems, Sixth Edition


Chief information officer and chief technology officer continued

Chief Information Officer and Chief Technology Officer (continued)

Management Information Systems, Sixth Edition


Summary

Summary

  • 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

  • Data processing has four stages

Management Information Systems, Sixth Edition


Summary continued

Summary (continued)

  • Any IS that helps in management is a management information system (MIS)

  • Many different types of MIS

  • 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

Management Information Systems, Sixth Edition


Summary continued1

Summary (continued)

  • The job prospects for IT professionals are bright

  • IT has created societal concerns regarding privacy, identity theft, spam, and Web annoyances

Management Information Systems, Sixth Edition


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