Management Information Systems, Sixth Edition

1. Management Information Systems, Sixth Edition Chapter 1 Business Information Systems: An Overview

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 Management Information Systems, Sixth Edition

3. 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

4. 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

5. 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

6. The Power of Digital Systems (continued) • Digital information is stored and communicated by means of electromagnetic signals in three ways: • Using Electricity (e.g. RAM) • Using Magnetism (e.g. Hard Disk) • Using Light (e.g. CD/DVD) • Why Digital Information? • 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

7. 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 (e.g. improve sales, increase enrollment) • Both problem solving and decision making require information Management Information Systems, Sixth Edition

8. 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

9. 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

10. 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 (e.g. summarized, computation, statistical analysis) Management Information Systems, Sixth Edition

11. 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

12. Data vs. Information • Data: 2455, 2758, 2699, 2913, 2744 • Information: Management Information Systems, Sixth Edition

13. Generating Information • Process: the manipulation of data • Goal is to 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

14. Generating Information (continued) Management Information Systems, Sixth Edition

15. Generating Information (continued) INPUT (Data) PROCESS OUTPUT (Information) Management Information Systems, Sixth Edition

16. Generating Information (continued) Student List considered Information by Instructors But the higher management like IRPO, VPIA and the President himself considers above as Data not Information. So, for something to be information depends on context or who uses the information/data. Management Information Systems, Sixth Edition

17. 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

18. Information in Context (continued) Management Information Systems, Sixth Edition

19. Activity No. 2 • On Gardener+ case study on Pages 1-3, help Amanda who is tasked to developed the Information System to identify what are the possible data to be gathered from customers. And then what possible information could be generated out of the gathered data via the system that she is going to develop. (20 pts) • On the Information generated by the system identified above give an example of at least one characteristic that would qualify it as real information. (see Page 11). (10 points) Management Information Systems, Sixth Edition

20. What Is a System? • System: array of components that work together to achieve goal or goals Simplified Enrollment System for COM Financial Aid Business Office Pay Student Tuition Bill Check Financial Status Bill Students Admission Admit Students Management Information Systems, Sixth Edition

21. What Is a System? • A System • Accepts input • Processes input • Produces output Management Information Systems, Sixth Edition

22. 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

23. What is a System? (continued) COM Goal : Provide quality adult education MITC Financial Aid Goal : Provide books and other resources like multi-media to enhance student learning Goal : Provide Financial Aid to Students Admission Maintenance Goal : Admit qualified students to the college and keep student academic records Goal : Maintain properties including classrooms as a viable environment for student learning Management Information Systems, Sixth Edition

24. What is a System? (continued) Management Information Systems, Sixth Edition

25. 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

26. 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

27. Without Systems Thinking Sales Department Create a website for Online Customer Orders to automate manual system Manufacturing could not keep up the Demand Management Information Systems, Sixth Edition

28. With Systems Thinking Shared Database Sales Department Create a website for Online Customer Orders to automate manual system Shipping Dept use record to expedite Shipping and Packaging Manufacturing could use Order records for planning laborers and inventory Management Information Systems, Sixth Edition

29. 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

30. 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

31. The Benefits of Human-Computer Synergy (continued) Management Information Systems, Sixth Edition

32. 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

33. 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

34. Information Systems in Organizations (continued) Management Information Systems, Sixth Edition

35. Information Systems in Organizations (IS Components View) Information Systems Management Information Systems, Sixth Edition

36. Information Systems in Organizations (Organizational View – another way of viewing IS) Organization Management Information Systems, Sixth Edition

37. The Four Stages of Processing • Input: collect and introduce data to system • Transaction: a business event, usually entered as input (e.g. deposit or withdraw in a bank) • 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

38. 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

39. The Four Stages of Processing (Model View) Management Information Systems, Sixth Edition

40. 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

41. Computer Equipment for Information Systems (continued) Management Information Systems, Sixth Edition

42. 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. • It is normally used to produce reports for managers to make routine-decisions (e.g. Daily Sales Report). Management Information Systems, Sixth Edition

43. 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

44. Transaction Processing Systems ATM POS (Point-Of-Sale) Management Information Systems, Sixth Edition

45. 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

46. Supply Chain Management Systems Management Information Systems, Sixth Edition

47. 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

48. 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

49. 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

50. 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