BME305
Management Information Systems
B. Sc. Business Administration (External) Degree
University of Sri Jayewardenepura
1.1
© 2007 by Prentice Hall
Information Systems
in Global Business
Today
The Role of Information Systems in Business Today
Perspectives on Information Systems – what , composition
Contemporary Approaches to Information Systems
1.2
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
The Role of Information Systems in Business Today
• How information systems are transforming business
•
•
•
•
Increased technology investments (10% – 15%)
Increased responsiveness to customer demands
Shifts in media and advertising (through email, blogs, google ads)
New laws – cyber laws
• Globalization opportunities
• Internet has drastically reduced costs of operating on global scale
 Reduced global operational cost
 World wide market place (customer / supplier)
 Finding low cost suppliers , managing production faculty in
other countries
1.3
© 2007 by Prentice Hall
Management Information Systems
Chapter 1 Information Systems in Global Business Today
The Role of Information Systems in Business Today
• In the emerging, fully digital firm
– Significant business relationships are digitally enabled
and mediated
– Core business processes are accomplished through
digital networks
– Key corporate assets are managed digitally
• Digital firms offer greater flexibility in
organization and management
– Time shifting, space shifting
1.4
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
The Role of Information Systems in Business Today
•
Growing interdependence
between ability to use information technology
and
ability to implement corporate strategies and achieve corporate goals
• Business firms invest heavily in information systems to achieve
six strategic business objectives:
–
Operational excellence
use as tool to achieve higher efficiency and productivity
–
New products, services, and business models
Music industry – new products and new model
–
- eg. me.lk, ebay
Customer and supplier intimacy / familiarity
hotels keep customer information, amerzon customer tracking
–
Improved decision making Best guesses v right decision
–
–
1.5
- through right info @ right time
Competitive advantage – doing the things better than others
Survival – IT is necessary item to survive , eg Banks
© 2007 by Prentice Hall
Management Information Systems
Chapter 1 Information Systems in Global Business Today
The Role of Information Systems in Business Today
The Interdependence Between Organizations and
Information Technology
There is a growing interdependence between a firm’s information systems and its business
capabilities. Changes in strategy, rules, and business processes increasingly require
changes in hardware, software, databases, and telecommunications. Often, what the
organization would like to do depends on what its systems will permit it to do.
Figure 1-2
1.6
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1.7
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Functions of an Information System
An information system contains information about an organization and its surrounding environment. Three basic activities—input,
processing, and output—produce the information organizations need. Feedback is output returned to appropriate people or activities in the
organization to evaluate and refine the input. Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory
agencies, interact with the organization and its information systems.
Figure 1-4
1.8
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Information Systems Are More Than Computers
Using information systems effectively requires an understanding of the organization,
management, and information technology shaping the systems. An information system
creates value for the firm as an organizational and management solution to challenges posed
by the environment.
Figure 1-5
1.9
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
• Organizational dimension of IS
– Hierarchy of authority, responsibility
•
•
•
•
•
•
Senior management
Middle management
Operational management
Knowledge workers
Data workers
Production or service workers
– Separation of business functions
•
•
•
•
Sales and marketing
Human resources
Finance and accounting
Production and manufacturing)
– Unique business processes
– Unique business culture
– Organizational politics
1.10
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
•
Management dimension of
information system
– Managers set organizational strategy for
responding to business challenges
– In addition, managers must act creatively:
•
•
1.11
Creation of new products and services
Occasionally re-creating the organization
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
• Technology dimension of information
systems
– Computer hardware and software
– Data management technology
– Networking and telecommunications
technology
• Networks, the Internet, intranets and extranets,
World Wide Web
– IT infrastructure: provides platform that
system is built on
1.12
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
• Dimensions of UPS tracking system
– Organizational:
• Procedures for tracking packages and managing
inventory and provide information
– Management:
• Monitor service levels and costs
– Technology:
• Handheld computers, bar-code scanners, networks,
desktop computers, etc.
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1.14
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Contemporary Approaches to Information Systems
The study of information systems deals with issues and insights contributed from technical
and behavioral disciplines.
Figure 1-9
1.15
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Contemporary Approaches to Information Systems
• Technical approach
• Emphasizes mathematically based models
• Computer science, management science,
operations research
• Behavioral approach
• Behavioral issues (strategic business
integration, implementation, how IS effects
on groups, individuals and org etc.) eg.
Freedom, Power
• Psychology, economics, sociology
1.16
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Contemporary Approaches to Information Systems
• Sociotechnical view
• Optimal organizational performance
achieved by jointly optimizing both
social and technical systems used in
production
• Helps avoid purely technological
approach
1.17
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Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
A Sociotechnical Perspective on Information Systems
How do we do
?
In a sociotechnical perspective, the performance of a system is optimized when both the
technology and the organization mutually adjust to one another until a satisfactory fit is
obtained.
Figure 1-10
1.18
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1.19
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Global E-Business:
How Businesses
Use Information
Systems
Business Processes and Information Systems
Types of Business Information Systems
1.20
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Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
• Business processes:
• Workflows of material, information, knowledge
• Sets of activities, steps
• May be tied to functional area or be crossfunctional
• Businesses: Can be seen as collection of
business processes
• Business processes may be assets or liabilities
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Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
• Examples of functional business processes
– Manufacturing and production
• Assembling the product
– Sales and marketing
• Identifying customers
– Finance and accounting
• Creating financial statements
– Human resources
• Hiring employees
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Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
The Order Fulfillment Process
Fulfilling a customer order involves a complex set of steps that requires the close
coordination of the sales, accounting, and manufacturing functions.
Figure 2-1
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Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
• Information technology enhances
business processes in two main ways:
• Increasing efficiency of existing processes
• Automating steps that were manual (POS Terminals)
• Enabling entirely new processes that are
capable of transforming the businesses
• Change flow of information
• Replace sequential steps with parallel steps
• Eliminate delays in decision making
Flexible organizations, internal memo, BPO
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Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
• System types:
– Transaction processing systems: supporting
operational level employees
– Management information systems and
decision-support systems: supporting
managers
– Decision support systems (Business
Intelligence Systems)
– Executive support systems: supporting
executives
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Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Interrelationships Among Systems
The various types of systems in the organization have interdependencies. TPS are major producers of information
that is required by many other systems in the firm, which, in turn, produce information for other systems. These
different types of systems are loosely coupled in most business firms, but increasingly firms are using new
technologies to integrate information that resides in many different systems.
Figure 2-10
1.26
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Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
• Enterprise applications
• Span functional areas
• Execute business processes across firm
• Include all levels of management
• Four major applications:
•
•
•
•
1.27
Enterprise systems
Supply chain management systems
Customer relationship management systems
Knowledge management systems
© 2007 by Prentice Hall
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Enterprise Application Architecture
Enterprise applications automate processes
that span multiple business functions and
organizational levels and may extend outside
the organization.
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Figure 2-11
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More detail available on given slides
1.29
© 2007 by Prentice Hall
Information Systems,
Organizations, and
Strategy
Organizations / Information Systems and relationship
How Information Systems Impact Organizations and Business Firms
Using Information Systems to Achieve Competitive Advantage
Using Systems for Competitive Advantage: Management Issues
1.35
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
• Information technology and organizations
influence one another
• Complex relationship influenced by organization’s
structure, business processes, politics, culture,
environment, and management decisions
1.36
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
The Two-Way Relationship Between Organizations
and Information Technology
Eg; Decide (what) systems, (How) implementation
This complex two-way relationship is
mediated by many factors, not the least
of which are the decisions made—or
not made—by managers. Other factors
mediating the relationship include the
organizational culture, structure,
politics, business processes, and
environment.
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Eg; Internal Communication – Message, emails
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
• What is an organization?
• Technical definition:
• Stable, formal social structure that takes resources
from environment and processes to produce outputs.
• A formal legal entity with internal rules and
procedures, as well as a social structure
• Behavioral definition:
• A collection of rights, privileges, obligations, and
responsibilities that is delicately balanced over a
period of time through conflict and conflict resolution
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
The Technical Microeconomic
Definition of the Organization
In the microeconomic definition of organizations, capital and
labor (the primary production factors provided by the
environment) are transformed by the firm through the
production process into products and services (outputs to
the environment). The products and services are consumed
by the environment, which supplies additional capital and
labor as inputs in the feedback loop.
1.39
Figure 3-2
© 2007 by Prentice Hall
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
The Behavioral View of Organizations
The behavioral view of organizations emphasizes group
relationships, values, and structures.
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Figure 3-3
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Organizations
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Organizations
Understanding the
organizations
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Design successful
systems
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
• Features of organizations
• All modern organizations share some characteristics, such as:
• Use of hierarchical structure
• Accountability, authority in system of impartial decision-making
• Adherence to principle of efficiency
• Other features include:
• Routines (standard operating procedures) and business
processes (Collections of routines)
• organizational politics
• culture
• Environments
• Structures
1.43
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More detail available on given slides
1.44
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
• Economic impacts
• IT changes relative costs of capital and the costs of
information
• Information systems technology is a factor of
production, like capital and labor – cyber shops
• IT affects the cost and quality of information and
changes economics of information
• Information technology helps firms contract in size
because it can reduce transaction costs (the cost of
participating in markets). Outsourcing expands
1.53
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
• Transaction cost theory
• Firms seek to economize on cost of
participating in market (transaction costs)
• IT lowers market transaction costs for firm,
making it worthwhile for firms to transact with
other firms rather than grow the number of
employees
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
The Transaction Cost Theory of the Impact of
Information Technology on the Organization
Firms traditionally grew in size to
reduce transaction costs. IT
potentially reduces the costs for a
given size, shifting the transaction
cost curve inward, opening up the
possibility of revenue growth
without increasing size, or even
revenue growth accompanied by
shrinking size.
Figure 3-6
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
• Agency theory:
• Firm is nexus of contracts among selfinterested parties requiring supervision
• Firms experience agency costs (the cost of
managing and supervising) which rise as firm
grows
• IT can reduce agency costs, making it possible
for firms to grow without adding to the costs of
supervising, and without adding employees
1.56
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
The Agency Cost Theory of the Impact of
Information Technology on the Organization
As firms grow in size and
complexity, traditionally
they experience rising
agency costs. IT shifts the
agency cost curve down
and to the right, enabling
firms to increase size
while lowering agency
costs.
Figure 3-7
1.57
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
• Organizational and behavioral impacts
• IT flattens organizations
• Decision-making pushed to lower levels
• Fewer managers needed (IT enables faster decisionmaking and increases span of control)
• Post-industrial organizations
• Organizations flatten because in post-industrial
societies, authority increasingly relies on knowledge
and competence rather than formal positions
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
• Organizational resistance to change
• Information systems become bound up in
organizational politics because they influence access to
a key resource -- information
• Information systems potentially change an
organization’s structure, culture, politics, and work
• Most common reason for failure of large projects is due
to organizational & political resistance to change
1.59
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
• The Internet and organizations
• The Internet increases the accessibility, storage, and
distribution of information and knowledge for
organizations
• The Internet can greatly lower transaction and agency
costs
• E.g. online help, electronic manual, network based
problem solving (remote login)
1.60
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
• Central organizational factors to consider when
planning a new system:
• Environment
• Structure
• Hierarchy, specialization, routines, business processes
• Culture and politics
• Type of organization and style of leadership
• Main interest groups affected by system; attitudes of
end users
• Tasks, decisions, and business processes the system
will assist
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Business value chain model
• Views firm as series of activities that add value to
products or services
• Highlights activities where competitive strategies can
best be applied
• Primary activities vs. secondary activities
• At each stage, determine how information systems
can improve operational efficiency and improve
customer and supplier intimacy
• Utilize benchmarking, industry best practices
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
The Value Chain Model
This figure provides
examples of systems for
both primary and support
activities of a firm and of its
value partners that can add
a margin of value to a firm’s
products or services.
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Figure 3-11
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Michael Porter’s competitive forces model
• Provides general view of firm, its competitors, and
environment
• Five competitive forces shape fate of firm
•
•
•
•
•
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Traditional competitors
New market entrants
Substitute products and services
Customers
Suppliers
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Porter’s Competitive Forces Model
In Porter’s competitive forces model, the strategic position of the firm and its strategies are determined not only by
competition with its traditional direct competitors but also by four forces in the industry’s environment: new market
entrants, substitute products, customers, and suppliers.
Figure 3-10
1.67
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Traditional competitors
• All firms share market space with competitors who
are continuously devising new products, services,
efficiencies, switching costs
• New market entrants
• Some industries have high barriers to entry, e.g.
computer chip business
• New companies have new equipment, younger
workers, but little brand recognition
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Substitute products and services
• Substitutes customers might use if your prices
become too high, e.g. iTunes substitutes for CDs
• Customers
• Can customers easily switch to competitor’s
products? Can they force businesses to compete on
price alone in transparent marketplace?
• Suppliers
• Market power of suppliers when firm cannot raise
prices as fast as suppliers
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Four generic strategies for dealing with
competitive forces, enabled by using IT
• Low-cost leadership
• Product differentiation
• Focus on market niche
• Strengthen customer and supplier intimacy
1.70
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Low-cost leadership
• produce products and services at a lower price than
competitors while enhancing quality and level of
service.
• E.g. reducing stocks through JIT, automated the process
• Product differentiation
• Enable new products or services, greatly change
customer convenience and experience
• E.g. adding new feature through IT. Banking, mobile, Apple
iPhone, Google
• Personalized products – PC, Cars
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Focus on market niche
• Use information systems to enable a focused strategy on a
single market niche; specialize.
• IS support to analyze buying patterns, taste, preference closely.
• E.g. Hilton Hotels
• Strengthen customer and supplier intimacy’
• Use information systems to develop strong ties and loyalty with
customers and suppliers; increase switching costs
• E.g. Chrysler, Amazon
• Customization and personalization techniques (for e solutions)
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• The Internet’s impact on competitive advantage
• Transformation, destruction, threat to some industries
• E.g. travel agency, printed encyclopedia, newspaper
• Competitive forces still at work, but rivalry more intense
• Universal standards allow new rivals, entrants to market
• New opportunities for building brands and loyal customer
bases
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Strategic advantage at industry level:
• Use IT to develop industry-wide standards for exchanging
information or transactions electronically, to increase efficiency,
make product substitution less likely, and perhaps raise entry
costs
• Value web:
• Collection of independent firms using highly synchronized IT to
coordinate value chains to produce product or service
collectively
• More customer driven, less linear operation than traditional
value chain
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
The Value Web
The value web is a networked
system that can synchronize the
value chains of business partners
within an industry to respond
rapidly to changes in supply and
demand.
1.76
Figure 3-12
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Information systems can improve overall
performance of business units by
promoting synergies and core
competencies
• Synergies
• When output of some units used as inputs to
others, or organizations pool markets and
expertise
• E.g. Merger of Google and Mobitel
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Core competencies
• Activity for which firm is world-class leader
• Relies on knowledge, experience, and sharing this
across business units
• E.g. IS to create central core competencies
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Network-based strategies
• Take advantage of firm’s abilities to network
with each other
• Include use of:
• Network economics
• Virtual company model
• Business ecosystems
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Network economics
• Traditional economics: Law of diminishing returns
• The more any given resource is applied to production, the
lower the marginal gain in output, until a point is reached
where the additional inputs produce no additional outputs
• Network economics:
• Business model based on networks. Marginal cost of adding
new participant almost zero, with much greater marginal
gain
• Value of community grows with size (eBay)
• Value of software grows as installed customer base grows –
continue with product and more user support
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Virtual company strategy
• Virtual company uses networks to ally with other
companies to create and distribute products without
being limited by traditional organizational boundaries
or physical locations
• E.g. Li Fung manages production, shipment of
garments for major fashion companies, outsourcing
all work to over 7,500 suppliers
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
• Business ecosystems
• Industry sets of firms providing related services and products
• Microsoft platform used by thousands of firms for their own
products
• Wal-Mart’s order entry and inventory management system
• Keystone firms: Dominate ecosystem and create platform
used by other firms
• Niche firms: Rely on platform developed by keystone firm
• Individual firms can consider how IT will enable them to
become profitable niche players in larger ecosystems
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Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Systems for Competitive Advantage: Management Issues
• Sustaining competitive advantage
• Because competitors can retaliate and copy strategic systems,
competitive advantage is not always sustainable; systems
may become tools for survival
• Performing strategic systems analysis
• What is structure of industry? – competitive forces
• What are value chains for this firm?
• Managing strategic transitions
• Adopting strategic systems requires changes in business
goals, relationships with customers and suppliers, and
business processes
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Ethical and Social
Issues in Information
Systems
1.85
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Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems
Understanding Ethical and Social Issues Related to Systems
• A model for thinking about ethical, social, and political
issues
• Five moral dimensions of the information age
•
•
•
•
•
Information rights and obligations
Property rights and obligations
Accountability and control
System quality
Quality of life
• Key technology trends that raise ethical issues
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Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems
The Moral Dimensions of Information Systems
•
•
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Information rights: Privacy and freedom in the
Internet Age
•
The European directive on data protection
•
Internet challenges to privacy
•
Technical solutions
Property rights: Intellectual property
•
Trade secrets
•
Copyright
•
Patents
•
Challenges to intellectual property rights
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Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems
The Moral Dimensions of Information Systems
• Accountability, liability, and control
• Computer-related liability problems
• System quality: Data quality and system errors
• Quality of life: Equity, access, and boundaries
• Balancing power: Center versus distributed
• Rapidity of change: global rapid change wiped-out business and
your job quickly
• Maintaining boundaries: do anything any where - Family, work,
and leisure
• Dependence and vulnerability – what happen if system fails
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Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems
The Moral Dimensions of Information Systems
• Quality of life: Equity, access, and boundaries (cont’d)
• Computer crime and abuse
• Employment: Trickle-down technology and reengineering
job loss
• Equity and access: does everyone have equal opportunity
to participate digital age? Increasing racial and social
class cleavages
• Health risks: RSI, CVS, and Technostress
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Enhancing
Decision Making
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Management Information Systems
Chapter 12 Enhancing Decision Making
Decision Making and Information Systems
• Business value of improved decision making
Decide the gain / lose (what is the key source)
• Types of decisions
Unstructured / semi structured/ structured
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Management Information Systems
Chapter 12 Enhancing Decision Making
Decision Making and Information Systems
Stages in Decision Making
The decision-making process can be
broken down into four stages.
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Figure 12-2
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Management Information Systems
Chapter 12 Enhancing Decision Making
Decision Making and Information Systems
• Managers and decision making in the real world
• Managerial roles
•
Interpersonal role- figurehead for the org. (symbolic duties)
•
Informational role – information dissemination (receiving up-to-date
information and re distribute)
•
Decision role- make decisions
• Real-world decision making
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•
IS are not helpful to all managerial roles
•
Result depends on
•
Information quality – high quality decision need high quality info
•
Management filters – biases, less attention make bad decisions
•
Organizational culture – decisions for balance interest groups
rather than best solution
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Management Information Systems
Chapter 12 Enhancing Decision Making
Systems for Decision Support
• Management information systems (MIS)
• Decision-support systems (DSS)
• Business value of executive support systems
• Data visualization and geographic information
systems (GIS)
• Web-based customer decision-support systems
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Building Systems
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Management Information Systems
Chapter 13 Building Systems
Systems as Planned Organizational Change
Organizational Change Carries Risks and Rewards
The most common forms of organizational change are automation and rationalization. These
relatively slow-moving and slow-changing strategies present modest returns but little risk. Faster
and more comprehensive change—such as reengineering and paradigm shifts—carries high
rewards but offers substantial chances of failure.
Figure 13-1
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Management Information Systems
Chapter 13 Building Systems
Overview of Systems Development
• Systems analysis
• Establishing information requirements
• Systems design
• The role of end users
• Completing the systems development process
• Programming
• Testing
• Conversion
• Production and Maintenance
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Management Information Systems
Chapter 13 Building Systems
Overview of Systems Development
The Systems Development Process
Building a system can be broken down into six core activities.
Figure 13-3
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Management Information Systems
Chapter 13 Building Systems
Alternative Systems-Building Approaches
• Traditional systems life cycle
• Prototyping
• Steps in prototyping
• Advantages and disadvantages of prototyping
• End-user development – developed by end user with little
help with expert
• Application software packages and outsourcing
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Management Information Systems
Chapter 13 Building Systems
Application Development for the Digital Firm
• Rapid application development (RAD)
• Component-based development and Web services
• Web services and service-oriented computing
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Introduction to the
Computers
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What Is a Computer and What Does It Do?
• Computer: A programmable, electronic device that
accepts data, performs operations on that data, and
stores the data or results as needed
– Computers follow instructions, called programs, which
determine the tasks the computer will perform
• Basic operations
– Input: Entering data into the computer
– Processing: Performing operations on the data
– Output: Presenting the results
– Storage: Saving data, programs, or output for future use
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– Communications: Sending or receiving data
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Hardware
• Hardware: The physical parts of a computer
– Internal hardware
• Located inside the main box (system unit) of the
computer
– External hardware
• Located outside the system unit and plug into ports
located on the exterior of the system unit
– Hardware associated with all five computer
operations
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Hardware
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Hardware
• Input devices
– Used to input data into the computer
– Keyboards, mice, scanners, cameras, microphones,
joysticks, etc.
• Processing devices
– Perform calculations and control computer’s operation
– Central processing unit (CPU) and memory
• Output devices
– Present results to the user
– Monitors, printers, speakers, projectors, etc.
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Hardware
• Storage devices
– Used to store data on or access data from
storage media
– Hard drives, DVD disks and drives, USB flash
drives, etc.
• Communications devices
– Allow users to communicate with others and to
electronically access information
– Modems, network adapters, etc.
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Software
• Software: The programs or instructions used
to tell the computer hardware what to do
– System software: Operating system allows a
computer to operate
– Application software: Performs specific tasks
or applications
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Computers to Fit Every Need
• Six basic categories of computers
– Embedded computers
– Mobile devices
– Personal computers
– Midrange servers
– Mainframe computers
– Supercomputers
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Computer Networks and the Internet
• Computer network: A collection of hardware and other
devices that are connected together.
– Users can share hardware, software, and data
– Users can communicate with each other
• Network servers: Manage resources on a network
• Clients: Access resources through the network server
• Computer networks exist in many sizes and types
– Home networks
– School and small business networks
– Large corporate
– Public wireless networks
– The Internet
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What Are the Internet and the
World Wide Web?
• Internet: The largest and most well-known
computer network in the world
• Individuals connect to the Internet using an
Internet service provider (ISP)
• World Wide Web: One resource (a vast collection
of Web pages) available through the Internet
– Web sites contain Web pages stored on Web servers
– Web pages viewed using a Web browser (Internet
Explorer, Safari, Firefox, Opera, etc.
• A wide variety of information is available through
the Web
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IP Addresses and Domain Names
• IP addresses are numeric and unique
• Domain Names: Correspond to IP addresses
– Top-level domains (TLDs)
identifies type of organization
or its location
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Uniform Resource Locators (URLs)
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E-Mail Addresses
• E-mail addresses consist of:
– Username: A persons’ identifying name for a
particular domain
– The @ symbol
– Domain name for the computer that will be
handling the person’s e-mail (mail server)
• Pronouncing Internet addresses
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Computers and Society
• The vast improvements in technology over the past decade
have had a distinct impact on daily life, both at home and
at work
• Many benefits of a computer-oriented society
• Also risks
– Computer viruses
– Identity theft and phishing
– Privacy issues
• Differences in online communications
• The anonymity factor
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• Information integrity (not all information on the Internet is
accurate)
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Foundations of
Business Intelligence:
Databases and
Information
Management
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
Organizing Data in a Traditional File Environment
• File organization concepts
• Computer system uses hierarchies
•
•
•
•
Field: Group of characters
Record: Group of related fields
File: Group of records of same type
Database: Group of related files
• Record: Describes an entity
• Entity: Person, place, thing on which we store
information
• Attribute: Each characteristic, or quality, describing entity
• E.g. Attributes Date or Grade belong to entity COURSE
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
Organizing Data in a Traditional File Environment
The Data Hierarchy
A computer system
organizes data in a
hierarchy that starts
with the bit, which
represents either a 0
or a 1. Bits can be
grouped to form a byte
to represent one
character, number, or
symbol. Bytes can be
grouped to form a field,
and related fields can
be grouped to form a
record. Related
records can be
collected to form a file,
and related files can
be organized into a
database.
Figure 6-1
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
Organizing Data in a Traditional File Environment
• Problems with the traditional file processing (files
maintained separately by different departments)
• Data redundancy and inconsistency
• Data redundancy: Presence of duplicate data in multiple files
• Data inconsistency: Same attribute has different values
• Program-data dependence:
• When changes in program requires changes to data accessed by
program
• Lack of flexibility
• Poor security
• Lack of data sharing and availability
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
Organizing Data in a Traditional File Environment
Traditional File Processing
The use of a traditional approach to file processing encourages each functional area in
a corporation to develop specialized applications and files. Each application requires a
unique data file that is likely to be a subset of the master file. These subsets of the
master file lead to data redundancy and inconsistency, processing inflexibility, and
wasted storage resources.
Figure 6-2
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
The Database Approach to Data Management
• Database:
• Collection of data organized to serve many applications by
centralizing data and controlling redundant data
• Database management system:
• Interfaces between application programs and physical data files
• Separates logical and physical views of data
• Solves problems of traditional file environment
• Controls redundancy
• Eliminated inconsistency
• Uncouples programs and data
• Enables central management and security
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
The Database Approach to Data Management
• Hierarchical and Network DBMS: Older
systems
• Hierarchical DBMS: Models one-to-many
relationships
• Network DBMS: Models many-to-many
relationships
• Both less flexible than relational DBMS and do not
support ad hoc, natural language
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
The Database Approach to Data Management
• Object-Oriented DBMS (OODBMS)
• Stores data and procedures as objects
• Capable of managing graphics, multimedia, Java
applets
• Relatively slow compared with relational DBMS for
processing large numbers of transactions
• Hybrid object-relational DBMS: Provide capabilities
of both OODBMS and relational DBMS
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
The Database Approach to Data Management
• Capabilities of Database Management Systems
• Data definition capability: Specifies structure of database
content, used to create tables and define characteristics of fields
• Data dictionary: Automated or manual file storing definitions of
data elements and their characteristics
• Data manipulation language: Used to add, change, delete,
retrieve data from database
• Structured Query Language (SQL)
• Microsoft Access user tools for generation SQL
• Also: Many DBMS have report generation capabilities for
creating polished reports (Crystal Reports)
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
Using Databases to Improve Business Performance and Decision Making
• Database warehouses
• Data warehouse:
• Stores current and historical data from many core operational
transaction systems
• Consolidates and standardizes information for use across enterprise,
but data cannot be altered
• Data warehouse system will provide query, analysis, and reporting
tools
• Data marts:
• Subset of data warehouse with summarized or highly focused portion
of firm’s data for use by specific population of users
• Typically focuses on single subject or line of business
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
Using Databases to Improve Business Performance and Decision Making
• Business Intelligence:
• Tools for consolidating, analyzing, and providing access
to vast amounts of data to help users make better
business decisions
• E.g. Harrah’s Entertainment analyzes customers to
develop gambling profiles and identify most profitable
customers
• Principle tools include:
• Software for database query and reporting
• Online analytical processing (OLAP)
• Data mining
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
Using Databases to Improve Business Performance and Decision Making
Business Intelligence
A series of analytical
tools works with data
stored in databases
to find patterns and
insights for helping
managers and
employees make
better decisions to
improve
organizational
performance.
Figure 6-14
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Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases
and Information Management
Using Databases to Improve Business Performance and Decision Making
• Data mining:
• More discovery driven than OLAP
• Finds hidden patterns, relationships in large databases
• Infers rules to predict future behavior
• The patterns and rules are used to guide decision making
and forecast the effect of those decisions
• Popularly used to provide detailed analyses of patterns in
customer data for one-to-one marketing campaigns or to
identify profitable customers.
• Less well known: used to trace calls from specific
neighborhoods that use stolen cell phones and phone
accounts
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