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Management

Information Systems
By Effy Oz & Andy Jones

Chapter 1: Business Information
Systems: An Overview
www.cengage.co.uk/oz

Use with Management Information Systems 1e
By Effy Oz & Andy Jones ISBN 9781844807581
© 2008 Cengage 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 in business

Use with Management Information Systems 1e
By Effy Oz & Andy Jones ISBN 9781844807581
© 2008 Cengage Learning

Objectives (continued)
• Describe careers in information technology
• Identify major ethical and societal concerns
created by widespread use of information
technology

Use with Management Information Systems 1e
By Effy Oz & Andy Jones ISBN 9781844807581
© 2008 Cengage Learning

The Purpose of Information
Systems
• Businesses use information systems
– To make sound decisions
– To solve problems
• Problem is any undesirable situation
• Decision arises when more than one
solution to problem exists

Use with Management Information Systems 1e
By Effy Oz & Andy Jones ISBN 9781844807581
© 2008 Cengage Learning

The Purpose of Information
Systems (continued)
• Problem solving and decision making
require information
• Keys to success in business are
– Gathering correct information
– Storing information
– Using information

Use with Management Information Systems 1e
By Effy Oz & Andy Jones ISBN 9781844807581
© 2008 Cengage Learning

Information. and Information Systems • “Data”. “information” and “system” are commonly used terms • Important to understand their similarities and differences Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . Data.

or picture • Information: facts or conclusions that have meaning within context – Composed of data that is manipulated Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . statement. Data vs. Information • Data: a given or fact – Can be number.

Data Manipulation • Data is manipulated to make useful information • Survey is common method of collecting data • Raw data is hard to read • Information is more useful to business than data Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Generating Information • A process is manipulation of data • Process usually produces information • Process may produce more data • A piece of information in one context may be considered data in another context Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Generating Information (continued) Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Information in Context • Not all information is useful • Useful information is – Relevant – Complete – Accurate Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Information in Context (continued) • Useful information is – Current – Obtained economically (in business) Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Information in Context (continued) Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

What Is a System? • System: array of components that work together to achieve goal or goals • System – Accepts input – Processes input – Produces output Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

What is a system? (continued) • System may have multiple goals • System may contain subsystems • Subsystems have sub-goals that meet main goal • Subsystems transfer output to other subsystems Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

What is a system? (continued) • Closed system: has no connections with other systems • Open system: interfaces and interacts with other systems – Often a subsystem of a bigger system • Information system: processes data and produces information Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Information and Managers • Systems thinking: thinking of an organization in terms of subsystems • Database: collection of electronic records • Information systems automate exchange among subsystems • Information map: network of information systems • Information technology: technologies that facilitate construction and maintenance of information systems Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

The Benefits of Human- Computer Synergy • Humans are relatively slow and make mistakes • Computers cannot make decisions • Synergy: combining resources to produce greater output Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

The Benefits of Human- Computer Synergy (Continued) Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Information Systems in Organisations • Computer-based Information system: system with computer at centre • Certain trends have made information systems important in business • Organisations lag behind if they do not use information systems Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Components of information systems Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

usually entered as input • Data processing: perform calculations on input • Output: what is produced by the information system • Storage: vast amounts of data stored on (for example) optical discs Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . The Four Stages of Processing • Input: collect and introduce data to system – Transaction: a business event.

Computer Equipment for Information Systems • Input devices: receive input • Computer: process data • Output: displays information • Storage devices: store data • Network devices: transfer data Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Computer Equipment for Information Systems (continued) Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

From Recording Transactions to Providing Expertise: Types of Information Systems • Many types of information systems • Capabilities of applications have been combined and merged • Management Information System: supports planning. control. and making decisions Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

ATMs and purchase order systems Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . Transaction Processing Systems • Most widely used type of system • Records data collected at point where organisation interacts with other parties • Encompasses cash registers.

billing. manufacturing. Supply Chain Management Systems • Supply chain: sequence of activities involved in producing and delivering products – Activities include marketing. purchasing raw materials. and after-sale services • Also known as enterprise resource planning (ERP) systems Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . shipping. collection.

Customer Relationship Management Systems • Customer relationship management: managing relations with customers – Used in combination with telephones to provide customer service – Often linked to Web applications that track online transactions Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Business Intelligence Systems • Business Intelligence: gather data to help organisation compete – Often contains statistical models – Access large pools of data • Data warehouse: large database that usually store transactional records Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Decision Support and Expert Systems • Decision support system: supports decision-making – Relies on models to produce tables – Extrapolates data to predict outcomes • Expert system: supports knowledge- intensive decision-making – Uses artificial intelligence Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Geographic Information Systems • Geographic information system: ties data to physical locations • Represents data on a map in different formats • May reflect demographic information in addition to geographic • May use information from GPS satellites Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Geographic Information Systems (continued) Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

and human resources – Part of a larger enterprise system Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .Information Systems in Business Functions • Functional business area: services within a company that support main business – Includes accounting. marketing. finance.

Accounting • Information systems help record transactions • Produce periodic statements • Create required reports for legal compliance • Create supplemental reports for managers Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

and making decisions Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . Finance • Finance systems facilitate financial planning and business transactions • Tasks include organising budgets. managing cash flow. analysing investments.

Marketing • Pinpoint likely customers and promote products • Marketing information systems analyse demand for products in regions and demographic groups – Identify trends in demand for products/services • Web provides opportunity to collect marketing data Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

and reward analysis • Performance evaluation systems provide grading utilities Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . Human Resources • Human resource management systems aid record-keeping – Must keep accurate records – Aids recruiting. selection. placement.

Web Empowered Enterprises • E-commerce: Buying and selling goods and services through Internet • Internet is a vast network of computers connected globally • Web has a profound impact on information systems Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

and database administrator jobs are increasing in demand Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . software engineering. Careers in Information Systems • Information technology professionals are increasingly in demand • Networking. system analyst.

and providing specifications for programmers • Requires communication and presentation skills Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . Systems Analyst • System analyst: designs and updates information systems • Involves analysing system requirements. documenting development efforts.

Database Administrator • Database administrator: responsible for databases – Develops and acquires database applications – Must protect privacy of customers and employees – Responsible for securing the database Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Data Administrator • Data administrator: responsible for strategic use of databases – Ensuring senior management are able to make full use of internal data – Ensuring appropriate external data is collected and filtered – Enabling the use of this internal and external data to gain competitive advantage Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

maintains. Network Administrator • Network administrator: acquires. manages. troubleshoots networks • Implements security – Firewalls – Access codes Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning . implements.

Webmaster • Webmaster: creates and maintains Web site • Designs and codes the page • Demand for Webmasters grows as more businesses use Web Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Chief Security Officer • Chief security officer: supervises security of information system • Position exists due to growing threat to information security • Reports to chief information officer Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Chief Information Officer and Chief Technology Officer • Chief information officer: responsible for all aspects of information system – Highest ranking IS officer – Responsible for IS as a strategic resource • Chief technology officer: has similar duties as CIO – High level corporate officer – In charge of all IT needs of the organisation • Sometimes the two positions are incorporated into one Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Chief Information Officer and Chief Technology Officer (continued) Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Summary • Computer-based information systems pervade almost every aspect of our lives • A system is a set of components that work together to achieve a common goal • Subsystem: a system performs a limited task that produces an end result. which must be combined with other products from other systems to reach an ultimate goal • Data processing has four stages Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

finance. marketing. Summary (continued) • Any IS that helps in management is a management information system (MIS) • Many different types of MIS • Enterprise application systems (SCM or ERP) tie together different functional areas of a business • ISs are used in accounting. and human resources Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .

Summary (continued) • The job prospects for IT professionals are bright • IT has created societal concerns Use with Management Information Systems 1e By Effy Oz & Andy Jones ISBN 9781844807581 © 2008 Cengage Learning .