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Management Information Systems, Sixth Edition

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

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  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 • 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 • 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 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. 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

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

  14. 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

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

  16. 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

  17. 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

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

  19. 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

  20. 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

  21. 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

  22. 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

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

  24. 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

  25. 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

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

  27. 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

  28. 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

  29. 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

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

  31. 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

  32. 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

  33. 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

  34. 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

  35. 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

  36. 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

  37. 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

  38. 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

  39. Geographic Information Systems (continued) Management Information Systems, Sixth Edition

  40. 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

  41. 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

  42. 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

  43. 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

  44. 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

  45. 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

  46. 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

  47. 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

  48. 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

  49. 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

  50. Network Administrator • Network administrator: acquires, implements, manages, maintains, and troubleshoots networks • Implements security • Firewalls • Access codes Management Information Systems, Sixth Edition

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