1

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 2

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 3

Management Information Systems

(MIS) is the study of people, technology,
organizations and the relationships among them.
MIS professionals help firms realize maximum
benefit from investment in personnel, equipment,
and business processes. MIS is a people-oriented
field with an emphasis on service through
technology.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 4

management information system

  (MIS) provides information that organizations require
to manage themselves efficiently and
effectively. Management information systems are
typically computer systems used for managing. The five
primary components of an MIS are:
 1. Hardware

 2. Software

 3. Data (information for decision making),

 4. Procedures (design, development and documentation),

 5. People (individuals, groups, or organizations).

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 5

Information system
A combination of hardware,
software, infrastructure and trained
personnel organized to facilitate
Planning, Controlling,
Coordination, and decision making
in an organization.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 6

Information
Data that is
1.Accurate and timely

2.Specific and organized for purpose.

3.Presented within a context or circumstance

that gives it meaning and relevance or
important and
4.can lead to an increase in understanding and
decrease in uncertainty.
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 7

Information
Information is knowledge gained through study,
Communication, research, instruction, factual
data and etc. Information is valuable because it
can affect behavior, a decision, or an outcome for
example, if a manger is told his/her company's
net profit decreased in the past month he/she
may use this information as a reason to cut
financial spending for the next month. a piece of
information is considered valueless if after
receiving it. things remain unchanged.
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 8

system
 Following are considered as the elements of a system in
terms of information systems.
1. Input

2. Output

3. Processor

4. Control: Control involves monitoring and evaluating

5. feedback

6. Boundary; and interface

7. Environment

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 9

Chapter
1
Foundations of Information
Systems in Business

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 10

Learning Objectives
Explain why knowledge of information
systems is important for business professionals
and identify five key areas of information
systems knowledge.
Give examples to illustrate how the business

applications of information systems can

support a firm’s business processes,
managerial decision making, and strategies for
competitive advantage.
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 11

Learning Objectives (Continued)

Provide examples of the components of real

world information systems.
Provide examples of several major types of

information systems.
Identify several challenges that a business

manager might face in managing the

successful and ethical development and use of
information technology in a business.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 12

Section I

Foundation Concepts:
Information Systems and Technologies

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 13

Information Systems Framework

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 14
WHY INFORMATION SYSTEMS ARE
IMPORTANT 
An understanding of the effective and responsible use
and management of information systems is important
for managers and other business knowledge workers in
today’s global information society.  Information
systems and technologies have become a vital
component of successful businesses and
organizations.  Information systems constitute an
essential field of study in business administration and
management, as they are considered a major functional
area in business operations.


McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 15

What is an Information System? 

An information system (IS) can be any

organized combination of people, hardware,
software, communications networks, and
data resources that collect, transforms, and
disseminate information in an organization.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 16

Information Systems Concepts (Continued)

Business Applications
The major uses of information systems for
operations, management, and competitive
advantage.
Development Processes

How business professionals and information

specialists plan, develop, and implement
information systems.
Management Challenges

The challenge of managing ethically and

effectively.
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 17

What IS a system?
A group of interrelated or interacting elements
forming a unified whole, OR
A group of interrelated components working

together toward a common goal by accepting

inputs and producing outputs in an organized
transformation process (dynamic system).
Three basic interacting components:

 Input

 Processing (transformation process)

 Output
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 18

Information Systems Concepts (Continued)

Foundation Concepts
Fundamental concepts about the

components and roles of information

systems.
Information Technologies

Major concepts, developments, and

management issues in information

technology.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 19

Other System Characteristics

A system exists and functions in an
environment containing other systems.
Subsystem – a component of a larger system.

Systems that share the same environment may

be connected to one another through a shared

boundary, or interface.
Open versus closed system.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 20

Components of an INFORMATION System

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 21

Components of an Information System (Continued)

People Resources
End Users

IS Specialists

Hardware Resources

Computer systems

Peripherals

Software Resources

System software

Application software

Procedures
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 22

Components of an Information System (Continued)

DataResources
Data versus Information

Network Resources

Communication media

Network support

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 23

Data Versus Information

Monthly Sales Report

for West Region

0 ann Sales Rep: Charles Mann

10 rles M
00 ha oe s Emp No. 79154
12 t C S h Item Qty Sold Price
s M
We 54 T TM Shoes 1200 $100
791

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 24

Logical Data Elements

Name
Field

Payroll
Record

Payroll
File

Personnel
Database

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 25

Information Products
Focus is on the end-user.
They are the result of IS activities…

Input

Processing

Output

Storage

Control

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 26

Section II

Foundation Concepts: Business Applications,

Development, and Management

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 27

Major Roles of IS

Support
Competitive
Advantage

Support
Business
Decision Making

Support of
Business Processes and Operations

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 28

Major Roles of IS (continued)

Support Business Processes

Support Decision Making

Support Competitive Advantage

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 29

The Present and the Future

E-Business

The use of Internet technologies to

internetwork and empower…
Business processes

Electronic commerce, and

Enterprise communication &

collaboration
Within a company & with its customers,

suppliers, & other business stakeholders.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 30

IS in the E-Business Enterprise

Every business competes globally (whether
they realize it or not)
IS supports business operations through the

use of:
Intranets

Extranets

Internet

Other information technologies

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 31

Intranets and extranets

Are two distinctly different things, and both can
be highly beneficial to businesses in practically
any industry. understanding the differences
between extranets and intranets isn’t as difficult
as many people think and requires little more
than a brief background on each, the better you
can grasp these concepts, the more likely it is that
you will benefit from putting them to use.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 32

What is an Extranet?
To better understand how an extranet works, it
can be helpful to break the word itself down
slighlty. “Extra” for example, can be viewed as
referring to anything that is crucial to your
business, yet exists outside of it, clients, vendors
and suppliers, for example.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 33

Cont…………………………………..
An extranet, then, is basically a private network
designed specifically to allow these individuals to
communicate with you and your employees in a
closed virtual space. Extranets serve an extremely
important role, especially in marketing and tech
industries but have been playing a major role in
many different spaces.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 34

What is the intranet?

The major difference between the two, however, is
that an intranet is typically used internally. While
an extranet allows businesses to communicate
with clients and vendors, an intranet allows
employees and colleagues to work with one
another in a virtual space — no outside parties
are involved.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 35

IS in the E-Business Enterprise (continued)

Enterprise Collaboration Systems

Support communication, coordination, &

collaboration.
Virtual teams

Electronic Commerce

Buying & selling, and marketing & servicing

of products, services, & information.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 36

Trends in Information Systems

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 37

Types of Information Systems

Operations Support Systems
Transaction processing systems

Batch – transaction data accumulate over

time, processed periodically.

Real-time – data processed immediately

after a transaction occurs.

Process Control Systems – monitor &

control physical processes.

Enterprise Collaboration Systems
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 38

Types of Information Systems (continued)

Management Support Systems

Management Information Systems – pre-

specified reports & displays to support

decision-making.
Executive Information Systems – critical

information tailored to the information

needs of executives.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 39

Types of Information Systems (continued)

Other Classifications
Expert systems – expert advice

Knowledge management systems – support

the creation, organization, & dissemination

of business knowledge
Functional business systems – support the

basic business functions

Strategic information systems – strategic

advantage
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 40

Developing IS Solutions to Business Challenges

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 41

In Summary, the IS Function…

Is a major functional area of business.
Is an important contributor to operational

efficiency, employee productivity and morale,

and customer service & satisfaction.
Is a major source of information and support

for decision making.

Provides a strategic advantage in developing

competitive products & services.

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 42

Discussion Questions
How can information technology support a
company’s business processes and decision
making, and give it a competitive advantage?
How does the use of the Internet, intranets,

and extranets by an e-business enterprise

support their e-commerce activities?
Why do big companies still fail in their use of

information technology? What should they be

doing differently?
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 43

Discussion Questions (continued)

How can a manager demonstrate that he or

she is a responsible end user of information
systems?
What are some of the toughest management
challenges in developing IT solutions to solve
business problems and meet new e-business
opportunities?
Why are there so many conceptual
classifications of information systems? Why
are they typically integrated in information
systems found in the real world?
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 44

Discussion Questions (continued)

In what major ways have the roles of

information systems applications in business
expanded during the last 40 years? What is
one major change you think will happen in the
next 10 years?
Can the business use of Internet technologies

help a company gain a competitive advantage?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 45

Real World Case 1 – BellSouth Corporation

We understand that ROI is a key component

of business decision-making.
We also understand the importance of

choosing projects that help us achieve business

goals.
How is BellSouth Corporation measuring ROI

for technology projects?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 46

BellSouth (continued)

How well is IT supporting the business goals

of BellSouth?
How has IT improved efficiency and

effectiveness of BellSouth’s business

processes?
How has IT helped BellSouth improve

managerial decision-making?
How has IT helped BellSouth improve

workgroup collaboration?
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 47

BellSouth (continued)

What resources were used?

What activities were performed?

What information products were produced?

Explain BellSouth’s “technology transfer

roadmap.”
What is it?

What function does it serve?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 48

BellSouth (continued)

Is BellSouth’s technology transfer map a good

way to determine IT investment priorities?
Why or why not?
What are the strengths of this approach?

What are the possible drawbacks to this

approach?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 49

BellSouth (continued)

What else might BellSouth do to guarantee the

strategic business value of potential IT
investment projects?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 50

Real World Case 2 – Royal Caribbean International

What problems did Tom Murphy encounter?

Why did the IT group at Royal Caribbean

have such poor performance and business
status in the company?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 51

Royal Caribbean (continued)

What did Murphy do to resolve the IT

problems?

What do you see as the top three factors in

Murphy’s turnaround of the IT function?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 52

Royal Caribbean (continued)

What does Murphy see as the foundation for

change in a diverse workgroup?

What are Murphy’s four keys to managing a

diverse workforce?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 53

Real World Case 3 – Clariant International

How has the focus of business managers

toward IT projects changed according to this
case?

What factors drove that change in focus?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 54

Clariant (continued)

How does the change in focus impact the near-

term future of IT?

What types of challenges did Clariant

encounter?

How did they resolve those challenges?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 55

Clariant (continued)

Are Web-enabling business processes a cost

effective strategy? Always?

What role did management play in Clariant’s

IT success?

Had management not been involved, would

you have expected the same level of success?
Why or why not?
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 56

Real World Case 4 – Hershey Foods Corp.

How could Hershey have avoided the failure of

its first implementation of their major new IT
system?

Did timing contribute to the problem?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 57

Hershey Foods (continued)

Do you see the failure of the first

implementation to be a software issue or a
project management issue? Why?

Why did Hershey’s major upgrade of that

system succeed?

Was it a matter of learning from past

mistakes?
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 58

Hershey Foods (continued)

What did Hershey do differently with the

upgrade?

Why do failures in major business/IT projects

continue to occur to large companies with so
much IT expertise and financial resources?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 59

Hershey Foods (continued)

What business pressures contribute to those

failures?
Internal

External

How might end-user involvement have helped

with the implementation process?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 60

Real World Case 5 – WH Smith PLC

Why did WH Smith need a new retail

management system?

What were their goals?

How does the system work?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 61

WH Smith (continued)

How well does WH Smith’s new CRM system

support its business goals?

How has the staff been included in the

process?

Do you believe that including the staff is

important? Why?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
 62

WH Smith (continued)

In what other ways could IT help WH Smith

support its retail managers, marketers, and
customers?

McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.