management information systems, 4 th edition 1 chapter 1 business information systems: an overview
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Management Information Systems, 4th Edition 1
Chapter 1Business Information
Systems: An Overview
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Management Information Systems, 4th Edition 2
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
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Management Information Systems, 4th Edition 3
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
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Management Information Systems, 4th Edition 4
Information Systems
• Why Do People Need Information?
– Individuals: Entertainment and enlightenment
– Businesses: Decision making and problem solving
• Gathering
• Storing
• Manipulating
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Management Information Systems, 4th Edition 5
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 (a specific
time & space)
• Raw data or data that have been manipulated
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• Raw data
– Time-consuming to read
– Difficult to understand
• Manipulated Data
– Provides useful information
Data Manipulation
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Management Information Systems, 4th Edition 7
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
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Management Information Systems, 4th Edition 8
Information: Important Resource
• Information must be useful– Relevant– Complete– Accurate– Current– Cost
effective in business
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Management Information Systems, 4th Edition 9
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; no flow-ins or flow-outs
• Open system: System that interfaces with other systems
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Management Information Systems, 4th Edition 10
Systems and Subsystems
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Information and Managers• Systems thinking:
– Viewing organization in terms of suborganizations or subsystems –decomposition
– A framework for problem solving and decision making—conquering
– Managers focus on overall goals and operations of business—synthesizing
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Management Information Systems, 4th Edition 12
Information and Managers (Cont.)
• Systems thinking (Cont.)
– Information Map: data and information flow within an organization
• (工欲善其事 )
• (key corporate resources: M.I.T.)
– Information Technology: all technologies that facilitate construction and maintenance of information systems
• (必先利其器 )
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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
Prerequisites?
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Trends of information systems
• Power of computers increasing; prices dropping
– Increasing p/p (performance/price) ratio
• 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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Management Information Systems, 4th Edition 15
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 (for the 1st or 2nd order feedback loop)
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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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Management Information Systems, 4th Edition 19
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
• Customer purchasing power analysis
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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,
– Scenario simulation
• Group Decision Support Systems (GDSS)
– Generate ideas, establish priorities, and reach decisions in group environment
• A case of Delphi method
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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
• Summarized report with highlights
• Expert Systems (ES)
– Programmed with human expertise
– Can help solve problems of unstructured nature
• Multiple criteria planning & the heuristic method (with the 2nd order feedback loop)
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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, or even anywhere
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Management Information Systems, 4th Edition 23
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, training, and dispatching
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Management Information Systems, 4th Edition 25
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
• E.g., quick response, FAQs, complain trace, etc.
• 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
– Returns arrangement
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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
– Interactive new product designing activities across multiple divisions
• Government
– Tax authorities, national insurance and welfare agencies, defense departments, economic organizations, immigration authorities
β-version prototyping
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Shared Data Resources
• Effective way to operate: different systems share data from the same pool
• Company’s database: one of the most powerful resources, a corporate asset
• 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 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
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Ethical and Societal IssuesThe 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 IssuesThe 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 world’s population have ever used a PC; less than 3% have Internet access
– Increasing gap or not?
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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