Management Information Systems week 1 and week 2
patricio11
ch01.pdf
Kenneth J. Sousa Effy Oz
MANAGEMENT
INFORMATION
SYSTEMS Seventh 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
• 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
2
Objectives (cont’d.)
• Describe careers in information technology
• 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:
0 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
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Figure 1.1 Input-process-output
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
17
Figure 1.3 Several subsystems make up this corporate accounting system
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
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22
Figure 1.4 Components of an information system
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
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Figure 1.5 Input, process, output, storage and networking devices
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
42
Careers in Information Systems
• Information technology professionals are
increasingly in demand
• U.S. Bureau of Labor Statistics estimates a 22
percent increase in demand for computer and
information technology specialists for the
decade 2010–2020
43
Systems Analyst
• Systems analyst:
– Starts career as programmer or
programmer/analyst
– Researches, plans, and recommends software
and systems choices
– Responsible for developing cost analyses, design
considerations, implementation timelines, and
feasibility studies
• Requires excellent communication and
presentation skills
44
Database Administrator (DBA)
• DBA is 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
45
Network Administrator
• Network administrator: acquires, implements,
manages, maintains, and troubleshoots
networks
• Implements security
– Firewalls
– Access codes
46
System Administrator
• System administrator (“sys admin”): 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, and performing system
upgrades
47
Mobile Applications Developer
• Mobile applications developer skills
– Technical expertise: software development tools
for mobile devices and programming languages
– Ability to determine users’ needs
• Communication and system design skills
48
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
• Involved in creatively representing the
organization on the web
49
Chief Security Officer (CSO)
• CSO: supervises security of information system
– Also called chief information security officer
(CISO)
• Position exists due to growing threat to
information security
• Usually reports to chief information officer (CIO)
50
Chief Information Officer (CIO) and
Chief Technology Officer (CTO)
• 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
• CTO: has similar duties as CIO
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Figure 1.6 Traits of a successful CIO
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
53
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
54
Summary (cont’d.)
• The job prospects for IT professionals are bright
• IT has created societal concerns regarding
privacy, identity theft, spam, and Web
annoyances
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