Information Systems in Organizations

1. Section A Organizational Structure CHAPTER 12 Information Systems in Organizations Page 534

2. Section A Organizational Structure Chapter 12 SectionPREVIEW Section D Section A You will be able to: • Describe the activities that take place in a typical business • Provide examples of the computer’s role in TQM, employee empowerment, rightsizing, BPR, and e-commerce Page 534

3. Section A Organizational Structure Chapter 12 Section A • An informationsystem collects, maintains, and provides information to people. • An organization is a group of people working together to accomplish a goal. • Many organizations use computers to operate more effectively, gather information, and accomplish tasks. Page 536

4. Types of Organizations What’s the difference between an organization and a business? Chapter 12 Section A • An organization is a group of people working together toward a goal. • A business is an organization that seeks profit by providing goods and services. • The written expression of an organization’s mission is called a missionstatement. • describes goals • way goals will be accomplished Page 536

5. Types of Organizations What’s the difference between an organization and a business? Chapter 12 Section A • Mission statements are published in corporate reports and on the Web. Course Technology’s mission statement Page 536

6. Organizational Activities Are there activities that most organizations have in common? Chapter 12 Section A • Most organizational activities can be classified into four functional groups as shown below. Financial Management Operations Human Resources Management Sales and Marketing Page 537

7. Organizational Activities Are there activities that most organizations have in common? Chapter 12 Section A • The primary activities of an organization are called production or operations. • Tracking the flow of money through an organization is referred to as accounting or financialmanagement. • Advertising and promoting an organization are the jobs of salesandmarketing or publicrelations. • Keeping track of employees is referred to humanresourcesmanagement. Page 537

8. Trends and Challenges Could an organization function without computers? Chapter 12 Section A • Computers are an important aspect of organizational activities. • Organizations exist in a competitive environment where opportunities and threats abound. • In response to threats, an organization can: • become better at what it does • change the structure of an industry • create a new product or service Page 538

9. Trends and Challenges Could an organization function without computers? Chapter 12 Section A • Automation is the use of electrical or mechanical devices to improve manufacturing or other processes. • Computerization - implementing a computer system in an organization • TQM (total quality management) is a strategy in which an organization makes a commitment to analyzing and improving the quality of its products and services. Page 538

10. Trends and Challenges Could an organization function without computers? Chapter 12 Section A • Employee empowerment means giving employees the authority to make business decisions. • Rightsize means to find the most effective configuration for human and computer resources. • Businessprocessredesign requires radical changes to existing business practices to achieve improvements in performance. • Just-in-timeinventorymanagement - a way to reduce inventory costs Page 539

12. Section B People, Decisions and Information CHAPTER 12 Information Systems inOrganizations Page 540

13. Section B People, Decisions and Information Chapter 12 SectionPREVIEW Section D Section B You will be able to: • Describe the information needs of executives, managers, and workers Page 540

14. Section B People, Decisions and Information Chapter 12 Section B Section B • Every organization requires people. • Workers are the people who carry out the organization’s mission. • Managers determine organizational goals and plan what steps to take to achieve those goals. • both need to make decisions Page 540

15. Workers Do workers use information systems? Chapter 12 Section B Section B • A high percentage of workers use information systems and other computer or communications technologies. • Informationworkers - produce and manipulate information • Serviceworkers - deliver services to customers • Goodsworkers - create and manipulate physical objects Page 541

16. Workers Do workers use information systems? Chapter 12 Section B Section B Worker classification in the organizational pyramid Page 541

17. Managers What managerial tasks are enhanced by information systems? Chapter 12 Section B Section B • Executivemanagers - set long range goals for organization called strategicplanning • Middle managers - design ways to achieve plans laid out by executive managers, known as tacticalplanning • Supervisors - deal primarily with day-to-day operations, known as operationalplanning Page 543

18. Problems and Decisions How do workers and managers use information systems? Chapter 12 Section B Section B • To solve a problem, a worker must: • recognize the problem • devise possible solutions • select an action or solution • Problems • structured (every day, routine) • semi-structured (less routine, uncertain) • unstructured (require human intuition) Page 544

19. Problems and Decisions How do workers and managers use information systems? Chapter 12 Section B Section B • Computer information systems help people solve structured, semi-structured, and unstructured problems. Page 544

20. Information Analysis Tools Where do computers get information that they supply to workers and managers? Chapter 12 Section B Section B • Organizations generate internalinformation : • inventory • cash flow • personnel • stored in an information system • Externalinformation is collected from outside sources. • not permanently stored in information system Page 545

21. Information Analysis Tools Where do computers get information that they supply to workers and managers? Chapter 12 Section B Section B • It is easy to collect external information using Internet resources and other communications capabilities. Zacks Web site provides information about businesses Page 545

22. Information Analysis Tools Where do computers get information that they supply to workers and managers? Chapter 12 Section B Section B • Most information systems produce a fixed set of reports (daily cash receipts). • Information analysis tools help people model problems then find a solution or decision. Page 546

23. Information Analysis Tools Where do computers get information that they supply to workers and managers? Chapter 12 Section B Section B Criterium DecisionPlus software Page 546

25. Section C Information Systems CHAPTER 12 Information Systems inOrganizations Page 547

26. Section C Information Systems Chapter 12 SectionPREVIEW Section D Section C You will be able to: • Provide examples of office automation that make significant improvements in ways that organizations operate • Describe the transaction processing systems that are typically used in businesses • Differentiate between an MIS and a DSS • Explain how an expert system works Page 547

27. Section C Information Systems Chapter 12 Section C • An information system must have one or more of the following components: • office automation system • transaction processing system • management information system Page 547

28. Office Automation Can an information system automate routine office tasks? Chapter 12 Section C • An office automation system “automates” or computerizes, routine office tasks. • word processing software • spreadsheet software • scheduling software • e-mail software Page 547

29. Transaction Processing How does an organization collect information on production or operations? Chapter 12 Section C • In an information system context, a transaction is an event that requires a manual or computer-based activity. • A transactionprocessingsystem (TPS) keeps track of the transactions for an organization by providing a way to collect, store, display, modify, or cancel transactions. Page 547

30. Transaction Processing How does an organization collect information on production or operations? Chapter 12 Section C • Examples of transaction processing systems: • pointofsalesystem records items purchased at each cash register • order-entry/invoicesystem provides a way to input, view, modify, and delete orders • generalaccountingsystem records financial status of business • e-commercesystem - collects online orders and processes credit card payments Page 547

31. Transaction Processing How does an organization collect information on production or operations? Chapter 12 Section C • Data that is used by a transaction processing system is stored in files or databases Transaction processing system Page 548

32. Management Information Systems Can data collected by transaction be presented in a format conducive to decision making? Chapter 12 Section C • Managers need sophisticated reports to help them understand and analyze data. • created by a management information system • Management information system can be a synonym for the term “information system” or refer to a type of information system. • characterized by production of routine reports that managers use for structured and routine tasks Page 550

33. Management Information Systems Can data collected by transaction be presented in a format conducive to decision making? Chapter 12 Section C • One of the major goals of an MIS is to increase the efficiency of managerial activity. • A managerial information system produces several types of reports. • Detailreport - organized list • Summaryreport - combines or groups data • Exceptionreport - show information outside normal or acceptable ranges Page 551

34. Decision Support Systems Can managers get information about unanticipated problems? Chapter 12 Section C • A decision report system (DSS) allows users to: • manipulate data directly • incorporate data from external sources • create data models and “what if” scenarios • designed to make non-routine decisions Page 552

35. Decision Support Systems Can managers get information about unanticipated problems? Chapter 12 Section C • A decision model is a numerical representation of a realistic situation. • A decisionquery is a question or set of instructions describing the data that needs to be gathered to make a decision. • A decision support system “supports” the decision maker but does not make the decision. Page 552

36. Expert Systems and Neural Networks Do information systems ever make decisions? Chapter 12 Section C • Information systems do not make decisions. The manager analyzes the data and reaches a decision. • An expert system, sometimes referred to as a “knowledge-based system”, is a computer system designed to analyze data and produce a recommendation or decision. • uses a set of facts or rules Page 553

37. Expert Systems and Neural Networks Do information systems ever make decisions? Chapter 12 Section C Expert system Page 553

38. Expert Systems and Neural Networks Do information systems ever make decisions? Chapter 12 Section C • Knowledgebase - set of facts and rules, stored in a computer file • manipulated by inferenceengine software • An expert system is not a general-purpose problem solver or decision maker. • An expertsystemshell is a software tool that helps in developing expert system applications. • contains an inference engine • expert system without rules Page 554

39. Expert Systems and Neural Networks Do information systems ever make decisions? Chapter 12 Section C • Expert systems are designed to deal with imprecise data or problems that have more than one solution. • Using a technique called fuzzy logic, an expert system can deal with imprecise data by asking for a level of confidence. • A neuralnetwork uses computer circuitry to simulate the way in which a brain might process information. Page 555

41. User Focus Expert System Facts and Rules CHAPTER 12 Information Systems inOrganizations Page 556

42. User Focus Expert System Facts and Rules Chapter 12 User Focus An expert system has the ability to make inferences based on the rules and data in a knowledge base. An expert system can “think for itself” to draw conclusions from a set of facts. Page 556

43. Facts How do I write the facts for a knowledge base? Chapter 12 User Focus • A fact is a basic building block of a knowledge base. • Once facts are in a knowledge base, you can search through facts to produce an answer. • The way you write facts for a knowledge base depends on the development tool you use. • Predicate logic is a shorthand notation system used to construct your expert system. Page 557

44. Rules Can I use predicate logic for rules? Chapter 12 User Focus • The way that you enter facts depends on the development tool you use. • most do not allow free-form English • too ambiguous • A development tool requires you to use IF...THEN format or predicate logic to write rule. • When creating an expert system, the goal is to hide all of the details of a decision from the user. Page 558