Chapter 1 Business Information Systems: An Overview

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 (a specific

time & space)

• 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; no flow-ins or flow-outs

• Open system: System that interfaces with other systems


Systems and Subsystems


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


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 )


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?


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


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 (for the 1st or 2nd order feedback loop)


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 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


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


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)


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


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, training, and dispatching


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

• 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


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


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


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

– Increasing gap or not?


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

Chapter 1 Business Information Systems: An Overview

Documents

information flow

information systemthe

information map

different information

business information

role of information

computers process data

standalone system