Part 5 Control Challenges in the 21st Century

Chapter
17
Information
Technology
and Control

PowerPoint Presentation by Charlie Cook

The University of West Alabama
© 2007 Thomson/South-Western. All rights reserved.
 The Changing Business Environment

Increasing Shifting
Globalization Economies

The Business
Environment
Emerging
Flattening
Technology-Driven
Organizations
Innovations

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 Information Systems Defined
• Information System
 A set of interrelated components that collects (or
retrieves), processes, stores and distributes
information to support the activities of an
organization.
 Transforms inputs into outputs:
 At the input point, raw data are collected.
 At the processing point, the raw input is converted
into a more meaningful form.
 At the output point, the information is transferred to
the user or to organizational activities.

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 Figure 17.4 General Information Systems

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 Types of Information Systems

Operational- Knowledge-
Level Level

Types of
Information
Systems
Strategic- Management-
Level Level

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 Figure 17.1 Decision Specialties within an Organizational Hierarchy

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 Operational-Level Information
Systems
• Transaction processing systems (TPS)
 Information systems that support workers at the
operational level of an organization:
 Sales/marketing systems
 Manufacturing/production systems
 Finance/accounting systems
 Human resource systems
 Industry specific systems

© 2007 Thomson/South-Western. All rights reserved. 17–7

 Knowledge-Level Information Systems
• Knowledge Management Systems (KMSs)
 Help workers create, organize and make available
important business information throughout the
organization.
• Office Automation Systems (OASs)
 IT applications designed to increase the productivity
of data workers.
 Computer-based systems that assist the
organization in the processing, storage, collection
and transmission of electronic documents and
messages among individuals, work groups and
organizations.
© 2007 Thomson/South-Western. All rights reserved. 17–8
 Figure 17.2 Components of Office Automation Systems

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 Management-Level Information
Systems
• Management Information Systems (MIS)
 Provide managers with periodic reports that
summarize the organization's performance.
• Decision Support Systems (DSS)
 Are designed to help decision makers formulate high-
quality decisions about ad hoc, semi-structured
problems—situations in which procedures can be only
partially specified in advance.

© 2007 Thomson/South-Western. All rights reserved. 17–10

 Enterprise Resource Planning (ERP)
• ERP
 A management system that integrates all facets of the
organization's business so that they can be more
closely coordinated by sharing information.
 However, integrating many different systems is very
time consuming, extremely costly, and can become
technologically difficult.

© 2007 Thomson/South-Western. All rights reserved. 17–11

 Computer-Based Information System
Components
• Inputs
• The processing or transformation area
• Outputs
• Hardware
• Software
• Database
• Procedures for providing feedback to the system
• A means of controlling the system

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 Information Versus Data
• Data
 Raw facts or details that represent some type of
transaction or activity within an organization.
• Information
 The result of the process of transforming data into
meaningful facts useful for a specific purpose.

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 Figure 17.5 Characteristics of Useful Information

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 Figure 17.6 Steps in the Design of Information Systems

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 Successful Information Systems
• System feasibility
 A system’s ability to meet the needs and
expectations of its users.

Organizational Economic
Feasibility Feasibility

System
Feasibility

Operational Technical
Feasibility Feasibility

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 Ability to Meet Needs of Diverse Users
• There are many reasons why an information
system might fail to meet the needs and
expectations of its users.
 Time and cost can put pressure on designers to take
shortcuts that may lead to an inferior or flawed
system.
 Users have difficulty describing their information
needs adequately.
 As users become more familiar with the system, their
demands and expectations may increase.
 Users may resist the new system.

© 2007 Thomson/South-Western. All rights reserved. 17–17

 Telecommunications and Networking
• The transmission of information in any form from
one location to another using electronic or
optical means.
 Local-area network (LAN)
 Information
system that connects users in a small
area, such as a building, an office, or a
manufacturing plant.
 Wide-area network (WAN)
 Information system that extends over a broad
geographic area, such as cities, regions, countries,
or the world.

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 Telecommunication Activities (cont’d)
• Electronic Data Interchange (EDI)
 Electronic transmission of transaction data using
telecommunications.
• Electronic Funds Transfer (EFT)
 Electronic manipulation of financial transactions.
• Telecommuting
 The practice of working at a remote site by using a
computer linked to a central office or other
employment location.

© 2007 Thomson/South-Western. All rights reserved. 17–19

 Telecommunication Activities (cont’d)
• E-mail
 A computer-based system that allows individuals to
exchange and store messages through computerized
text-processing and communication networks.
• Electronic Commerce
 The process of buying and selling goods and services
electronically with computerized business
transactions.

© 2007 Thomson/South-Western. All rights reserved. 17–20

 Telecommunication Activities
(cont’d)
• Artificial Intelligence (AI)
 Expert system
A
computer-based system that contains and can
use knowledge about a specific, relatively narrow,
complex application.
 Robotics
 Use of machines with humanlike characteristics,
such as dexterity, movement, vision, and strength.

© 2007 Thomson/South-Western. All rights reserved. 17–21