MIS 300 Chapter 1 2

Basic Themes

• Information • Information helps meet goals • Systems are artifacts • Organizations run on information • Systems provide careers

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Principles and Learning Objectives-1

• The value of information is directly linked to how it helps decision makers achieve the organization’s goals– Distinguish data from information and describe the

characteristics used to evaluate the quality of data

Information

Organization GOAL

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MIS 300 Chapter 1 4

Principles and Learning Objectives -2

• Knowing the potential impact of information systems and having the ability to put this knowledge to work can result in a successful personal career, organizations that reach their goals, and a society with a higher quality of life– Identify the basic types of business information

systems and discuss who uses them, how they are used, and what kinds of benefits they deliver

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MIS 300 Chapter 1 5

Principles and Learning Objectives-3

• System users, business managers, and information systems professionals must work together to build a successful information system– Identify the major steps of the systems development

process and state the goal of each

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MIS 300 Chapter 1 6

Principles and Learning Objectives-4

• The use of information systems to add value to the organization can also give an organization a competitive advantage– Identify the value-added processes in the supply

chain and describe the role of information systems within them

– Identify some of the strategies employed to lower costs or improve service

– Define the term competitive advantage and discuss how organizations are using information systems to gain such an advantageClick here

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MIS 300 Chapter 1 7

Principles and Learning Objectives-5

• Information systems personnel are the key to unlocking the potential of any new or modified system– Define the types of roles, functions, and careers

available in information systems– Can (and will) also include many users– Will (most certainly) include all workers

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MIS 300 Chapter 1 8

Introduction

• Information system (IS)– Set of interrelated components: collect, manipulate,

disseminate data and information– Provide feedback to meet an objective– Examples: ATMs, airline reservation systems, course

reservation systems

What is Information, really? Why have it?

MIS 300 Chapter 1 9

What Your Mother Taught You

Think Say DoSee

SomethingHappens

ResponseRequired

MIS 300 Chapter 1 10

What Herbert Simon Won the Nobel Prize For

Design Choice ExecutionIntelli-gence

SomethingHappens

MgmtDecisionRequired

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What’s Behind the Model of Rational Decision Making

Reflect against what is known

Optimize or

Satisfice?

Select one alternative course of action

Implement the decision

Intelli-gence

SomethingHappens

MgmtDecisionRequired

Gather information

about pertinent events

All activity depends on

requirements and resources available

MIS 300 Chapter 1 12

What ‘s Wrong with This Model?

Design Choice ExecuteIntelli-gence

SomethingHappens

MgmtDecisionRequired

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Information Concepts: Data Versus Information

• Data: raw facts– Alphanumeric, image, audio, and video

• Information– Organized collection of facts– Have value beyond the facts themselves

data or other information

components themselves

Recordings of machines’ experiences

Information is “information” only to the extent that it informs a user or consumer. That

means that the informationness of an experience depends on the observer and what

the observer has to do (intention)!

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Figure 1.1: Defining and Organizing Relationships Among Data Creates Information

Data Versus Information (continued)

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Figure 1.2: The Process of Transforming Data into Information

Data Versus Information (continued)

Selecting, organizing and manipulating, conditioned by existing models and subsequent need for action.

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The Characteristics of Valuable Information

Table 1.2: Characteristics of Valuable Information

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The Characteristics of Valuable Information (continued)

Table 1.2: Characteristics of Valuable Information (continued)

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What Is an Information System?

Figure 1.3: The Components of an Information System

This is only one view. A system is much more complex. A behavioral view will

keep in mind intentions, skills, judgments, and prior knowledge (theory)

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Computer-Based Information Systems

• Manual versus computerized information systems

• Computers are NOT necessary in information systems, but they have certain efficiencies

• Computer-based information system (CBIS)– Hardware, software, databases, telecommunications,

people, and procedures– Collect, manipulate, store, and process data into

information

MIS 300 Chapter 1 20

Computer-Based Information Systems (continued)

Figure 1.4: The Components of a Computer-Based Information System

What you ex-

perience (above)

The infrastructur

e (left)

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Business Information Systems

• Most common types of information systems used in business organizations:– Electronic and mobile commerce systems – Transaction processing systems – Management information systems – Decision support systems – Specialized business information systems These are detailed next.

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Electronic and Mobile Commerce

• E-commerce: any business transaction executed electronically between parties such as:– Companies (B2B)– Companies and consumers (B2C)– Consumers and other consumers (C2C)– Business and the public sector– Consumers and the public sector

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Transaction Processing Systems

• Transaction: business-related exchange– Payments to employees– Sales to customers– Payments to suppliers

• Transaction processing system (TPS)– A collection of people, procedures, software,

databases, devices– Records completed business transactions

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Transaction Processing Systems (continued)

Figure 1.7: A Payroll Transaction Processing System

The inputs (numbers of employee hours worked and pay rates) go through a transformation process to produce outputs (paychecks)

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Enterprise Resource Planning

• Integrated programs that manage all business operations

• Coordinate planning, inventory control, production, and ordering among others

• Historically based in production systems

• Hard to translate to other types of business

• Necessarily complex

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Management Information Systems

• Management information system (MIS)– A collection of people, procedures, software,

databases, devices– Provides information to managers/decision makers

• Primary focus is operational efficiency

• MIS outputs– Scheduled reports– Demand reports– Exception reports

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Management Information Systems (continued)

Figure 1.8: Functional management information systems draw data from the organization’s transaction processing system

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Decision Support Systems

• Decision support system (DSS)– A collection of people, procedures, software,

databases, devices– Supports problem-specific decision making

• Focus is on decision-making effectiveness

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Decision Support Systems (continued)

Figure 1.9: Essential DSS Elements

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Systems Development

• Systems development– Creating or modifying existing business systems

• Systems investigation: gain an understanding

• of the problem to be solved or opportunity to be addressed

• Systems analysis: define problems and opportunities of the existing system

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Systems Development (continued)

• Systems design: determine how the new system will work to meet the business needs defined during systems analysis

• Systems implementation: create or acquire the various system components defined in the design step, assembling them, and putting the new system into operation

• Systems maintenance and review: check and modify the system so that it continues to meet changing business needs

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Organizations and Information Systems

• Organization: a collection of people and other resources established to accomplish a set of goals

• An organization is a system– Inputs: resources (materials, people, money)– Outputs: goods or services

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Organizations and Information Systems (continued)

Figure 1.13: A General Model of an Organization

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Organizations and Information Systems (continued)

• Value chain: a series (chain) of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service

• Upstream management: management of raw materials, inbound logistics, and warehouse and storage facilities

• Downstream management: management of finished product storage, outbound logistics, marketing and sales, and customer service

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Organizations and Information Systems (continued)

Figure 1.14: The Value Chain of a Manufacturing Company

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Organizations in a Global Society

• As companies rely on virtual structures and outsourcing to a greater extent, businesses can operate around the world

• Challenges to operating in a global society– Every country has a set of customs, cultures,

standards, politics, and laws– Language barriers– Difficulty in managing and controlling operations in

different countries

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Competitive Advantage

• Significant, long-term benefit to a company over its competition

• Ability to establish and maintain a competitive advantage is vital to a company’s success

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Factors That Lead Firms to Seek Competitive Advantage

• Rivalry among existing competition

• Threat of new entrants

• Threat of substitute products and services

• Bargaining power of customers and suppliers

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Strategic Planning for Competitive Advantage

• Change the structure of the industry

• Create new products or services

• Improve existing products or services

• Use information systems for strategic purposes

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Strategic Planning for Competitive Advantage (continued)

Table 1.5: Competitive Advantage Factors and Strategies

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Strategic Planning for Competitive Advantage (continued)

Table 1.5: Competitive Advantage Factors and Strategies (continued)

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Return on Investment and the Value of Information Systems

• Earnings growth

• Market share

• Customer awareness and satisfaction

• Total cost of ownership

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Careers in Information Systems

• Degree programs– Degrees in information systems– Business degrees with a global or international

orientation

• Computer systems are making IS professionals’ work easier

• Opportunities in information systems are not confined to single countries

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Careers in Information Systems (continued)

Figure 1.16: The Three Primary Responsibilities of Information Systems

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Roles, Functions, and Careers in the IS Department

• Primary responsibilities in information systems– Operations: focuses on the efficiency of information– Systems development: focuses on development

projects and ongoing maintenance and review– Support: provides user assistance

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Typical IS Titles and Functions

• Chief information officer (CIO): uses IS department equipment and personnel

• LAN administrators: set up and manage the network hardware, software, and security processes

• Internet careers– Strategists– Programmers– Web site operators– Chief Internet officer

• Other IS careers

MIS 300 Chapter 1 47

Summary

• Data: raw facts

• Information: organized collection of facts

• System components: input, processing, output, and feedback

• Computer-based information system (CBIS)– Hardware, software, databases, telecommunications,

people, and procedures– Collect, manipulate, store, and process data into

information

MIS 300 Chapter 1 48

Summary (continued)

• Transaction processing system (TPS): a collection of people, procedures, software, databases, and devices used to record completed business transactions

• Management information system (MIS): a collection of people, procedures, software, databases, and devices used to provide routine information to managers and decision makers

MIS 300 Chapter 1 49

Summary (continued)

• Decision support system (DSS): a collection of people, procedures, software, databases, and devices used to support problem-specific decision making

• Systems development: creating or modifying existing business systems

• Competitive advantage: significant, long-term benefit to a company over its competition

• Primary responsibilities in information systems: operations, systems development, and support