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Chapter 1 Business Information Systems: An Overview

Management Information Systems, 4th Edition

Learning Objectives
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 Describe how different information systems serve different levels within an organization
Management Information Systems, 4th Edition

Learning Objectives (Cont.)


Evaluate how telecommunications and database technology can help implement the goals of information systems Recognize the role of information technology in e-commerce List major factors to consider when evaluating information systems and their roles in organizations Identify major ethical and societal conflicts created by widespread use of information systems
Management Information Systems, 4th Edition

Information Systems
Why Do People Need Information?
Individuals: Entertainment and enlightenment Businesses: Decision making and problem solving
Gathering Storing

Manipulating

Management Information Systems, 4th Edition

Data, Information, and Systems


Data vs. Information
Data
A given or fact: a number, a statement, or a picture The raw materials in the production of information

Information
Data that have meaning within a context Raw data or data that have been manipulated

Management Information Systems, 4th Edition

Data Manipulation
Raw data
Time-consuming to read Difficult to understand

Manipulated Data
Provides useful information

Management Information Systems, 4th Edition

Generating Information
Raw data are processed in an IS to create final useful information
Process: Manipulation of data Computer-based ISs: process data to produce information
Management Information Systems, 4th Edition

Information: Important Resource


Information must be useful
Relevant Complete Accurate Current Cost effective in business
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Management Information Systems, 4th Edition

What Is a System?
System: A set of components that work together to achieve a common goal
Subsystem: One part of a system where the products of more than one system are combined to reach an ultimate goal Closed system: Stand-alone system that has no contact with other systems

Open system: System that interfaces with other systems


Management Information Systems, 4th Edition

Systems and Subsystems

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Information and Managers


Systems thinking:
Viewing organization in terms of suborganizations or subsystems

A framework for problem solving and decision making


Managers focus on overall goals and operations of business
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Information and Managers (Cont.)


Systems thinking (Cont.)
Information Map: data and information flow within an organization

Information Technology: all technologies that facilitate construction and maintenance of information systems

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The Benefits of Human-Computer Synergy


Synergy: combined resources produce output exceeding the sum of the outputs of the same resources employed separately Translates human thought into efficient processing of large amounts of data
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Information Systems in Organizations


Data
Hardware Software People Procedures
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Trends
Power of computers increasing; prices dropping
Increase in programming variety and ingenuity Internet access faster and more reliable Internet growth resulting in opportunities Increasing ratio of computer-literate workforce
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Components of an Information System

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The Four Stages of Data Processing


Input: Data are collected and entered into computer
Data processing: Data are manipulated into information using mathematical, statistical, and other tools Output: Information is displayed or presented Storage: Data and information are maintained for later use
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Computer Equipment for Information System


Input devices: introduce data into the IS Processor: manipulates data through the IS Output devices: display information Storage devices: store data and information

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Input-process-output-storage devices

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ISs: From Recording Transactions to Providing Expertise


Transaction Processing Systems (TPS)
Record data and perform basic processing
Cash registers and ATMs

Management Information Systems (MIS)


Recorded transactions and other data produce information for problem solving and decision making
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Types of MISs
Decision Support Systems (DSS)
Contain models, or formulas, that manipulate data into information

Often answer what if? questions

Group Decision Support Systems (GDSS)


Generate ideas, establish priorities, and reach decisions in group environment
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Types of MISs (Cont.)


Executive Information Systems (EIS)
Can gather information from vast amounts of data for high-level executives Highly useful in control and planning

Expert Systems (ES)


Programmed with human expertise Can help solve problems of unstructured nature
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Types of MISs (Cont.)


Geographic Information Systems (GIS)
Represents local conditions or features Allows planning, decision-making, and monitoring of local conditions or activities

On-demand Output
Managers can obtain reports tailored to their needs at any time
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ISs in Functional Business Areas


Accounting
Record business transactions, produce periodic financial statements, and create reports required by law

Finance
Organize budgets, manage the flow of cash, analyze investments, and make decisions that could reduce interest payments and increase revenues
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ISs in Functional Business Areas (Cont.)


Marketing
Analyze demand for various products in different regions and population groups

Human Resources
Help with record keeping and employee evaluation

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ISs in Different Business Sectors


Manufacturing
Allocate resources such as personnel, raw material, and time

Control inventory, process customer orders, prepare production schedules, perform quality assurance, and prepare shipping documents

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ISs in Different Business Sectors (Cont.)


Service
ISs are often the backbone of service organizations

Retail
Some retail stores (e.g., Wal-Mart, Sears) are now linked to communication networks by satellite
Management can determine which items move quickly and which do not

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ISs in Different Business Sectors (Cont.)


New Businesses
ISs have made new products and services possible, such as credit reports and shipment tracking

Government
Tax authorities, national insurance and welfare agencies, defense departments, economic organizations, immigration authorities

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Shared Data Resources


Effective way to operate: different systems share same data from same pool
Companys database: one of the most powerful resources Categorized and structured data can be manipulated to produce useful information

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Shared Data Resources (Cont.)

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E-Commerce
Business-to-business and business-to-consumer transactions done electronically via networks
Database management online makes information cheaper to distribute E-commerce is now synonymous with doing business on the Internet

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Why Study IS?


Knowledge Workers
Employers seek computer-literate professionals who know how to use information technology

Degrees in IS
Computer Science and Management Information Systems

Information Systems Careers


Systems analyst, specialist in enterprise resource planning (ERP), database administrator, telecommunications specialist, consulting, etc.
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Ethical and Societal Issues The Not-So-Bright Side


Consumer Privacy
Organizations collect (and sometimes sell) huge amounts of data on individuals

Employee Privacy
IT supports remote monitoring of employees, violating privacy and creating stress
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Ethical and Societal Issues The Not-So-Bright Side


Freedom of Speech
Opportunities increase for pornography, hate speech, intellectual property crime, and other intrusions Prevention may abridge free speech

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Ethical and Societal Issues The Not-So-Bright Side


IT Professionalism
No mandatory or enforced code of ethics for IT professionals--unlike other professions

Social Inequality
Less than 20% of the worlds population have ever used a PC; less than 3% have Internet access

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Business Information Systems: An Overview


Information Systems Data, Information, and Systems ISs: From Recording Transactions to Providing Expertise Information Systems in Business
Management Information Systems, 4th Edition

Shared Data Resources E-Commerce Why Study IS? Ethical and Societal Issues The Not-So-Bright Side
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Summary
Information Systems are essential to business Data is processed into useful information for problem solving and decision making Information systems provide information for different levels within an organization There are major factors to consider when evaluating information systems

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