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1. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

2. Chapter 18 Managing Information Systems McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

3. Learning ObjectivesAfter reading this chapter, you should be able to: • Understand the difference between data and information, and how firms use each to achieve organizational goals. • Integrate the components of a firm’s information technology. • Compare different types of networks, including local area networks, intranets, extranets, and the Internet. • Understand the role of software and how it changes business operations. • Discuss the ethical issues involved with the use of computer technology. • Understand how productivity, efficiency, and responsiveness to customers can be improved with information technology. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

4. 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. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

5. Management Skills for Information Systems Management • Analytical Skills—Managers need to be able to gather, synthesize, and compare data about their firms and about the options available to them. • Organizational Skills—Managers need to be able to make sense of information by organizing data to facilitate analysis and comparison. • Flexibility and Innovation Skills—Managers must be able to be flexible in adapting standard business practices to new information technologies. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

6. Information Related to MIS • Management information systems provide access to important information used in many other chapters: • Planning process (chapter 5) • Decision making (chapter 6) • Human resource management (chapter 10) • Communication (chapter 15) • Control (chapter 16) • Operations management (chapter 17) McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

7. 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

8. 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. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

9. Information Technology • Technology is the means of transforming inputs into products. • Technology has improved operations management, including productivity, efficiency, and customer responsiveness. • 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

10. 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

11. Computer Networks • LAN • The Internet is a network of networks. It provides: • E-mail • 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

12. 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 as such as searching through data and e-mail • Speech recognition software allows customers to speak numbers when placing orders over the phone McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

13. 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. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

14. 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

15. Computer Systems and Management Issues • 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. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

16. 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. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

17. Ten Commandments for Computer Ethics • Thou shalt not use a computer to harm other people. • Thou shalt not interfere with other people’s computer work. • Thou shalt not snoop around in other people’s files. • Thou shalt not use a computer to steal. • Thou shalt not use a computer to bear false witness. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

18. Ten Commandments for Computer Ethics(continued) • Thou shalt not use or copy software for which you have not paid. • Thou shalt not use other people’s computer resources without authorization. • Thou shalt not appropriate other people’s intellectual output. • Thou shalt think about the social consequences of the program you write. • Thou shalt use a computer in ways that show consideration and respect. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

19. 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

20. 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 • Neural network systems McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

21. 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

22. 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

23. 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

24. 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

25. 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 McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

26. Applications: Management is Everyone’s Business—For the Manager • Beware of outsourcing IT - in many cases, it results in dissatisfaction. • Managers should analyze very carefully the pros and cons of outsourcing before agreeing to enter an IT outsourcing relationship. • Be aware of trade-offs between owning the IT function or giving up control of it to an outside party. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

27. Applications: Management is Everyone’s Business—For Managing Teams • Groupware software supports collaborative efforts among group members, such as scheduling meetings, holding meetings, collaborating on projects, and sharing documents. • With Groupware, teams can be more productive with less downtime despite conflicting demands placed on each team member’s work schedule to work on other tasks. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

28. Applications: Management is Everyone’s Business—For Individuals • Individuals need constant updating of computer skills to master upgraded versions of software and to learn new software. • Cultivate a constructive relationship with the IT person in your department. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.