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
Data, 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 vs. Information
• Data: a given or fact
– Can be number, statement, 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
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 HumanComputer 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 HumanComputer 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
The Four Stages of Processing
• Input: collect and introduce data to system
– Transaction: a business event, 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
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
Transaction Processing Systems
• Most widely used type of system
• Records data collected at point where
organisation interacts with other parties
• Encompasses cash registers, ATMs and
purchase order systems
Use with Management Information Systems 1e
By Effy Oz & Andy Jones ISBN 9781844807581
© 2008 Cengage Learning
Supply Chain Management
Systems
• Supply chain: sequence of activities
involved in producing and delivering
products
– Activities include marketing, purchasing raw
materials, manufacturing, shipping, billing,
collection, 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
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 knowledgeintensive 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
Information Systems in Business
Functions
• Functional business area: services within a
company that support main business
– Includes accounting, finance, marketing, 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
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
Finance
• Finance systems facilitate financial
planning and business transactions
• Tasks include organising budgets, managing
cash flow, analysing investments, and
making decisions
Use with Management Information Systems 1e
By Effy Oz & Andy Jones ISBN 9781844807581
© 2008 Cengage Learning
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
Human Resources
• Human resource management systems aid
record-keeping
– Must keep accurate records
– Aids recruiting, selection, placement, 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
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
Careers in Information Systems
• Information technology professionals are
increasingly in demand
• Networking, system analyst, software
engineering, and database administrator
jobs are increasing in demand
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, 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
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
Network Administrator
• Network administrator: acquires,
implements, manages, maintains,
troubleshoots networks
• Implements security
– Firewalls
– Access codes
Use with Management Information Systems 1e
By Effy Oz & Andy Jones ISBN 9781844807581
© 2008 Cengage Learning
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
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, finance,
marketing, 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