Business IS

Management Information Systems, 4th Edition 1

Chapter 1Business Information Systems:

An Overview


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


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


Information Systems

• Why Do People Need Information?

– Individuals: Entertainment and enlightenment

– Businesses: Decision making and problem solving

• Gathering

• Storing

• Manipulating


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


• Raw data

– Time-consuming to read

– Difficult to understand

• Manipulated Data

– Provides useful information

Data Manipulation


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


Information: Important Resource

• Information must be useful– Relevant– Complete– Accurate– Current– Cost

effective in business


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


Systems and Subsystems


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


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


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


Information Systems in Organizations

• Data

• Hardware

• Software

• People

• Procedures


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


Components of an Information System


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


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


Input-process-output-storage devices


ISs: From Recording Transactionsto 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


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


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


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


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


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


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


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


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


Shared Data Resources

• Effective way to operate: different systems share same data from same pool

• Company’s database: one of the most powerful resources

• Categorized and structured data can be manipulated to produce useful information


Shared Data Resources (Cont.)


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”


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.


Ethical and Societal IssuesThe 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



• Freedom of Speech

– Opportunities increase for pornography, hate speech, intellectual property crime, and other intrusions

– Prevention may abridge free speech



• IT Professionalism

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

• Social Inequality

– Less than 20% of the world’s population have ever used a PC; less than 3% have Internet access


Business Information Systems: An Overview

• Information Systems• Data, Information, and

Systems• ISs: From Recording

Transactionsto Providing Expertise

• Information Systems in Business

• Shared Data Resources

• E-Commerce• Why Study IS?• Ethical and Societal

IssuesThe Not-So-Bright Side


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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