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