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Business Information Systems: An Overview. Management Information Systems, Fifth Edition by Effy Oz. Objectives. Explain why information systems are essential to business Describe how computers process data into useful information for problem solving and decision making

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Business Information Systems: An Overview

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Business information systems an overview

Business Information Systems: An Overview

Management Information Systems, Fifth Edition by Effy Oz



  • 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

  • Describe careers in information technology

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

The purpose of information systems

The Purpose of Information Systems

  • Businesses use information systems

    • To make sound decisions

    • To solve problems

  • Problem is any undesirable situation

  • Decision arises when more than one solution to problem exists

The purpose of information systems continued

The Purpose of Information Systems (continued)

  • Problem solving and decision making require information

  • Keys to success in business are

    • Gathering correct information

    • Storing information

    • Using information

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

Data vs information

Data vs. Information

  • Data: a given or fact

    • Can be number, statement, or picture

  • Information: facts or conclusions that have meaning within context

    • Composed of data that is manipulated

Data manipulation

Data Manipulation

  • Data is manipulated to make useful information

  • Survey is common method of collecting data

  • Raw data is hard to read

  • Information is more useful to business than data

Generating information

Generating Information

  • A process is manipulation of data

  • Process usually produces information

  • Process may produce more data

  • A piece of information in one context may be considered data in another context

Generating information continued

Generating Information (continued)

Figure 1.1: Input-process-output

Information in context

Information in Context

  • Not all information is useful

  • Useful information is

    • Relevant

    • Complete

    • Accurate

Information in context continued

Information in Context (continued)

  • Useful information is

    • Current

    • Obtained economically (in business)

Information in context continued1

Information in Context (continued)

Figure 1.2: Characteristics of useful information

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

What is a system continued

What is a system? (continued)

  • System may have multiple goals

  • System may contain subsystems

  • Subsystems have sub-goals that meet main goal

  • Subsystems transfer output to other subsystems

What is a system continued1

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

  • Information system: processes data and produces information

Information and managers

Information and Managers

  • Systems thinking: thinking of an organization in terms of subsystems

  • Database: collection of electronic records

  • Information systems automate exchange among subsystems

  • Information map: network of information systems

  • Information technology: technologies that facilitate construction and maintenance of information systems

The benefits of human computer synergy

The Benefits of Human-Computer Synergy

  • Humans are relatively slow and make mistakes

  • Computers cannot make decisions

  • Synergy: combining resources to produce greater output

The benefits of human computer synergy continued

The Benefits of Human-Computer Synergy (Continued)

Figure 1.4: Qualities of humans and computers that contribute to synergy

Information systems in organizations

Information Systems in Organizations

  • Computer-based Information system: system with computer at center

  • Certain trends have made information systems important in business

  • Organizations lag behind if they do not use information systems

Components of information systems

Components of information systems

Figure 1.5: Components of an information system

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

  • Data processing: perform calculations on input

  • Output: what is produced by the information system

  • Storage: vast amounts of data stored on optical discs

Computer equipment for information systems

Computer Equipment for Information Systems

  • Input devices: receive input

  • Computer: process data

  • Output: displays information

  • Storage devices: store data

  • Network devices: transfer data

Computer equipment for information systems continued

Computer Equipment for Information Systems (continued)

Figure 1.6: Input, process, output, storage, and networking devices

From recording transactions to providing expertise types of information systems

From Recording Transactions to Providing Expertise: Types of Information Systems

  • Many types of information systems

  • Capabilities of applications have been combined and merged

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

Transaction processing systems

Transaction Processing Systems

  • Most widely used type of system

  • Records data collected at point where organization interacts with other parties

  • Encompasses cash registers, ATMs and purchase order systems

Supply chain management systems

Supply Chain Management Systems

  • Supply chain: sequence of activities involved in producing products

    • Activities include marketing, purchasing raw materials, manufacturing, shipping, billing, collection, and after-sale services

Customer relationship management systems

Customer Relationship Management Systems

  • Customer relationship management: managing relations with customers

    • Used in combination with telephones to provide customer service

    • Often linked to Web applications that track online transactions

Business intelligence systems

Business Intelligence Systems

  • Business Intelligence: gather data to help organization compete

    • Often contains statistical models

    • Access large pools of data

  • Data warehouse: large database that usually store transactional records

Decision support and expert systems

Decision Support and Expert Systems

  • Decision support system: supports decision-making

    • Relies on models to produce tables

    • Extrapolates data to predict outcomes

  • Expert system: supports knowledge-intensive decision-making

    • Uses artificial intelligence

Geographic information systems

Geographic Information Systems

  • Geographic information system: ties data to physical locations

  • Represents data on a map in different formats

  • May reflect demographic information in addition to geographic

  • May use information from GPS satellites

Geographic information systems continued

Geographic Information Systems (continued)

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



  • Information systems help record transactions

  • Produce periodic statements

  • Create required reports for law

  • Create supplemental reports for managers



  • Finance systems facilitate financial planning and business transactions

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



  • 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

  • Web provides opportunity to collect marketing data

Human resources

Human Resources

  • Human resource management systems aid record-keeping

    • Must keep accurate records

    • Aids recruiting, selection, placement, and reward analysis

  • Performance evaluation systems provide grading utilities

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

Careers in information systems

Careers in Information Systems

  • Information technology professionals are increasingly in demand

  • Networking, system analyst, software engineering, and database administrator jobs are increasing in demand

Systems analyst

Systems Analyst

  • System analyst: designs and updates information systems

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

  • Requires communication and presentation skills

Database administrator

Database Administrator

  • Database administrator: responsible for databases

    • Develops and acquires database applications

    • Must protect privacy of customers and employees

    • Responsible for securing the database

Network administrator

Network Administrator

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

  • Implements security

    • Firewalls

    • Access codes



  • Webmaster: creates and maintains Web site

  • Designs and codes the page

  • Demand for Webmasters grows as more businesses use Web

Chief security officer

Chief Security Officer

  • Chief security officer: supervises security of information system

  • Position exists due to growing threat to information security

  • Reports to chief information officer

Chief information officer and chief technology officer

Chief Information Officer and Chief Technology Officer

  • Chief information officer: responsible for all aspects of information system

    • Often the vice president

  • Chief technology officer: has similar duties as CIO

Chief information officer and chief technology officer continued

Chief Information Officer and Chief Technology Officer (continued)

Figure 1.7: Traits of a successful CIO



  • 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

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 accounting, finance, marketing, and human resources

Summary continued1

Summary (continued)

  • The job prospects for IT professionals are bright

  • IT has created societal concerns

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