Business Information Systems: An Overview

1. Business Information Systems: An Overview Management Information Systems, Fifth Edition by Effy Oz

2. 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 • Describe careers in information technology • Identify major ethical and societal concerns created by widespread use of information technology

3. 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

4. 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

5. Data, Information, and Information Systems • “Data”, “information” and “system” are commonly used terms • Important to understand their similarities and differences

6. 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

7. 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

8. 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

9. Generating Information (continued) Figure 1.1: Input-process-output

10. Information in Context • Not all information is useful • Useful information is • Relevant • Complete • Accurate

11. Information in Context (continued) • Useful information is • Current • Obtained economically (in business)

12. Information in Context (continued) Figure 1.2: Characteristics of useful information

13. What Is a System? • System: array of components that work together to achieve goal or goals • System • Accepts input • Processes input • Produces output

14. 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

15. 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

16. 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

17. The Benefits of Human-Computer Synergy • Humans are relatively slow and make mistakes • Computers cannot make decisions • Synergy: combining resources to produce greater output

18. The Benefits of Human-Computer Synergy (Continued) Figure 1.4: Qualities of humans and computers that contribute to synergy

19. Information Systems in Organizations • Computer-based Information system: system with computer at center • Certain trends have made information systems important in business • Organizations lag behind if they do not use information systems

20. Components of information systems Figure 1.5: Components of an information system

21. 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 optical discs

22. Computer Equipment for Information Systems • Input devices: receive input • Computer: process data • Output: displays information • Storage devices: store data • Network devices: transfer data

23. Computer Equipment for Information Systems (continued) Figure 1.6: Input, process, output, storage, and networking devices

24. 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

25. Transaction Processing Systems • Most widely used type of system • Records data collected at point where organization interacts with other parties • Encompasses cash registers, ATMs and purchase order systems

26. Supply Chain Management Systems • Supply chain: sequence of activities involved in producing products • Activities include marketing, purchasing raw materials, manufacturing, shipping, billing, collection, and after-sale services

27. 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

28. Business Intelligence Systems • Business Intelligence: gather data to help organization compete • Often contains statistical models • Access large pools of data • Data warehouse: large database that usually store transactional records

29. Decision Support and Expert Systems • Decision support system: supports decision-making • Relies on models to produce tables • Extrapolates data to predict outcomes • Expert system: supports knowledge-intensive decision-making • Uses artificial intelligence

30. 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

31. Geographic Information Systems (continued)

32. 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

33. Accounting • Information systems help record transactions • Produce periodic statements • Create required reports for law • Create supplemental reports for managers

34. Finance • Finance systems facilitate financial planning and business transactions • Tasks include organizing budgets, managing cash flow, analyzing investments, and making decisions

35. Marketing • Pinpoint likely customers and promote products • Marketing information systems analyze demand for products in regions and demographic groups • Identify trends in demand for products/services • Web provides opportunity to collect marketing data

36. 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

37. 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

38. Careers in Information Systems • Information technology professionals are increasingly in demand • Networking, system analyst, software engineering, and database administrator jobs are increasing in demand

39. Systems Analyst • System analyst: designs and updates information systems • Involves analyzing system requirements, documenting development efforts, and providing specifications for programmers • Requires communication and presentation skills

40. Database Administrator • Database administrator: responsible for databases • Develops and acquires database applications • Must protect privacy of customers and employees • Responsible for securing the database

41. Network Administrator • Network administrator: acquires, implements, manages, maintains, troubleshoots networks • Implements security • Firewalls • Access codes

42. Webmaster • Webmaster: creates and maintains Web site • Designs and codes the page • Demand for Webmasters grows as more businesses use Web

43. 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

44. Chief Information Officer and Chief Technology Officer • Chief information officer: responsible for all aspects of information system • Often the vice president • Chief technology officer: has similar duties as CIO

45. Chief Information Officer and Chief Technology Officer (continued) Figure 1.7: Traits of a successful CIO

46. 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

47. 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

48. Summary (continued) • The job prospects for IT professionals are bright • IT has created societal concerns