Lesson 1

INTRODUCTION TO
INFORMATION SYSTEMS

Management Information Systems

Mrs. Rosemarie M. Coronejo
Math-IT Dept, IAS, FEU
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 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
Describe careers in information technology

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HISTORY OF INFORMATION SYSTEMS
Over the last half century, hardware has seen many-
fold increases in speed and capacity and dramatic
size reductions
Applications have also evolved from relatively
simple accounting programs to systems designed to
solve a wide variety of problems

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HISTORY OF INFORMATION SYSTEMS

An information system is a conceptual system

that enables managers to control and monitor a
firms physical systems used to transform input
resources into output resources

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 Data, Information, and Information
Systems
Data, information and system are
commonly used terms
Important to understand their similarities and
differences

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 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
Not all information is useful
Useful information is:
Relevant
Complete
Accurate
Current
Obtained economically (in business) 6
Information in Context

Figure 1.2: Characteristics of useful information

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 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

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 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

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Generating Information

Figure 1.1: Input-process-output

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 What Is a System?

System: array of components that work

together to achieve goal or goals
System
Accepts input
Processes input
Produces output

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 What is a system?

System may have multiple goals

System may contain subsystems
Subsystems have sub-goals that meet main
goal
Subsystems transfer output to other
subsystems

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 What is a system?

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

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 What is a system?

Information system: A set of interrelated

components that collect (or retrieve), process,
store, and distribute information to support
decision making and control in an organization

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

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The Benefits of Human-Computer
Synergy (Continued)

Figure 1.4: Qualities of humans and computers that contribute to synergy

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 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

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Components of information systems

Figure 1.5: Components of an information system

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

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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

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 Management Information Systems
Management information systems (MIS)
transform the data in frontline systems, such as
transaction processing systems into information
useful to managers
Typical MIS modules are report-writing software,
and models that can simulate firm operations
Information from the MIS is then used by
organizational problem solvers as an aid in decision-
making, as illustrated in Figure 1.9
Firms can also interact with suppliers or others to
form inter organizational information systems
(IOS), in which the MIS supplies information to the
other members of the IOS as well as the firm's users23
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Transaction Processing Systems

A transaction processing systems is

shown in Figure 1.8
It gathers data from the firms physical
system and environment and enters it into
its database
The software also transforms the data into
information for the firms managers and
other individuals in the firms environment

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 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

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 Virtual Office Systems
Office automation - the use of electronics to
facilitate communication, began with word
processing
Subsequent applications include electronic mail,
voice mail, electronic calendaring, and audio and
video conferencing
These personal productivity systems now
account for a large portion of a firm's use of the
computer as a communications vehicle
With improvements in networking, the concept of
a virtual office has developed, in which office
activities can be performed without the need for an
employee to be in a specific location 28
 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
Also known as enterprise resource planning
systems

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 Enterprise Resource Planning
Systems (ERP)
Over time, firms began to use many different
kinds of information systems throughout the firm
During the 1990s firms began to see the value in
integrating all of these systems so that they could
function as a coordinated unit
ERP systems are computer-based systems aimed
at meeting this need that enable the management
of all of a firms resources on an organization-
wide basis
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 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

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 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

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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

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Decision Support Systems (DSS)
A DSS is a system used to assist managers in
making decisions to help solve a specific problem
Figure 1.10 shows the 3 sources for the
information to be delivered to users: a relational
database, a knowledge base, and a
multidimensional database
Two additional types of DSS-related software are:
group decision support systems: used in aiding a
group of managers work out decisions, and
artificial intelligence: in which a program is created
for a computer to logically analyze a problem on its
own
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 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

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Geographic Information Systems
(continued)

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 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

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 Information Systems in Business
Functions
Functional business area: services within a
company that support main business
Includes:
Accounting
Finance
Marketing
Human Resources
Part of a larger enterprise system

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 Accounting

Information systems help record transactions

Produce periodic statements
Create required reports for law
Create supplemental reports for managers

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 Finance

Finance systems facilitate financial planning

and business transactions
Tasks include organizing budgets, managing
cash flow, analyzing investments, and making
decisions

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 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
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 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

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 Careers in Information Systems

Information technology professionals are

increasingly in demand
Networking, system analyst, software
engineering, and database administrator jobs
are increasing in demand

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 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

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 Database Administrator

Database administrator: responsible for

databases
Develops and acquires database applications
Must protect privacy of customers and employees
Responsible for securing the database

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 Network Administrator

Network administrator: acquires,

implements, manages, maintains, troubleshoots
networks
Implements security
Firewalls
Access codes

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 Webmaster

Webmaster: creates and maintains Web site

Designs and codes the page
Demand for Webmasters grows as more
businesses use Web

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 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

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 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

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Chief Information Officer and Chief
Technology Officer (continued)

Figure 1.7: Traits of a successful CIO

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