17Chapter PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc.,...

1717Chapter

PowerPoint Presentation by Charlie Cook© Copyright The McGraw-Hill Companies, Inc., 2003. All rights reserved.

Managing Information Managing Information Systems and Systems and TechnologiesTechnologies

© Copyright McGraw-Hill. All rights reserved. 17–2

Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives

• After studying the chapter, you should be able to:After studying the chapter, you should be able to:Differentiate between data and information, Differentiate between data and information,

and list the attributesand list the attributesDescribe three reasons why managers must Describe three reasons why managers must

have access to information to perform their have access to information to perform their tasks and roles effectively.tasks and roles effectively.

Describe the computer hardware and Describe the computer hardware and software innovations that have created the software innovations that have created the information technology revolution.information technology revolution.

Differentiate among five kinds of Differentiate among five kinds of management information systems.management information systems.


Learning Objectives (cont’d)Learning Objectives (cont’d)Learning Objectives (cont’d)Learning Objectives (cont’d)

Explain how advances in information systems Explain how advances in information systems can give an organization a competitive can give an organization a competitive advantage.advantage.


Chapter OutlineChapter OutlineChapter OutlineChapter Outline

• Information and the Manager’s JobInformation and the Manager’s JobAttributes of Useful InformationAttributes of Useful InformationInformation Systems and TechnologyInformation Systems and TechnologyInformation and DecisionsInformation and DecisionsInformation and ControlInformation and ControlInformation and CoordinationInformation and Coordination

• The Information Technology RevolutionThe Information Technology RevolutionThe Tumbling Price of InformationThe Tumbling Price of InformationWireless CommunicationWireless CommunicationComputer NetworksComputer Networks


Chapter Outline (cont’d)Chapter Outline (cont’d)Chapter Outline (cont’d)Chapter Outline (cont’d)

• The Information Technology Revolution The Information Technology Revolution (cont’d)(cont’d)Software DevelopmentsSoftware Developments

• Types of Management Information SystemsTypes of Management Information SystemsThe Organizational Hierarchy: The Traditional The Organizational Hierarchy: The Traditional

Information SystemInformation SystemTransaction-Processing SystemsTransaction-Processing SystemsOperations Information SystemsOperations Information SystemsDecision Support SystemsDecision Support SystemsExpert Systems and Artificial IntelligenceExpert Systems and Artificial Intelligence


Chapter Outline (cont’d)Chapter Outline (cont’d)Chapter Outline (cont’d)Chapter Outline (cont’d)

• The Impact and Limitations of Information The Impact and Limitations of Information Systems and TechnologySystems and TechnologyInformation Systems and Organizational Information Systems and Organizational

StructureStructureInformation Systems and Competitive Information Systems and Competitive

AdvantageAdvantageLimitations of Information SystemsLimitations of Information Systems


Information and the Manager’s JobInformation and the Manager’s JobInformation and the Manager’s JobInformation and the Manager’s Job

• DataDataRaw, unsummarized, and unanalyzed facts.Raw, unsummarized, and unanalyzed facts.

• InformationInformationData that is organized in a meaningful Data that is organized in a meaningful

fashionfashion

• Why Managers Need InformationWhy Managers Need InformationTo make effective decisionsTo make effective decisionsTo control activities of the organizationTo control activities of the organizationTo coordinate the activities of the To coordinate the activities of the

organizationorganization


Attributes of Useful InformationAttributes of Useful InformationAttributes of Useful InformationAttributes of Useful Information

Attributes

Quality The accuracy and reliability of available information affects the quality of decisions that managers make using the information.

Timelessness The availability of real-time information that reflects current conditions allows managers to maximize the effectiveness of their decisions.

Completeness Complete information allows managers to consider all relevant factors when making decisions.

Relevance Having information specific to a situation assists managers in making better decisions.


Factors Affecting the Usefulness of Factors Affecting the Usefulness of InformationInformation

Factors Affecting the Usefulness of Factors Affecting the Usefulness of InformationInformation

Figure 17.1


Information Systems and TechnologyInformation Systems and TechnologyInformation Systems and TechnologyInformation Systems and Technology

Key Terms

Information system

A system for acquiring, organizing, storing, manipulating, and transmitting information

Management information system

An information system that managers plan and design to provide themselves with the specific information they need

Information technology

The means by which information is acquired, organized, stored, manipulated, and transmitted


The Information Technology The Information Technology RevolutionRevolution


InformationInformationTechnologyTechnology

InformationInformationTechnologyTechnology

The Tumbling PriceThe Tumbling Priceof Informationof Information

The Tumbling PriceThe Tumbling Priceof Informationof Information

WirelessWirelessCommunicationsCommunications

WirelessWirelessCommunicationsCommunications

ComputerComputerNetworksNetworks

ComputerComputerNetworksNetworks

SoftwareSoftwareDevelopmentDevelopment

SoftwareSoftwareDevelopmentDevelopment


A Typical Three-A Typical Three-Tier Information Tier Information

SystemSystem

A Typical Three-A Typical Three-Tier Information Tier Information

SystemSystem

Figure 17.2




• The Tumbling Price of InformationThe Tumbling Price of InformationThe cost of computer hardware has dropped The cost of computer hardware has dropped

dramatically while the power of computers dramatically while the power of computers has risen sharply.has risen sharply.

• Wireless communicationsWireless communicationsCellular service has grown rapidly to over Cellular service has grown rapidly to over

110 million users.110 million users.Wireless access now connects laptops to Wireless access now connects laptops to

networks.networks.




• Computer NetworksComputer NetworksNetworkingNetworking

• The exchange of information through a group or The exchange of information through a group or network of interlinked computersnetwork of interlinked computers

• Servers are powerful computers that relay information Servers are powerful computers that relay information to client computers connected on a Local Area to client computers connected on a Local Area Network (LAN).Network (LAN).

• Mainframes are large computers processing vast Mainframes are large computers processing vast amounts of information .amounts of information .

• The Internet is a world wide network of computers.The Internet is a world wide network of computers.


Four Computer-BasedFour Computer-BasedManagement Information SystemsManagement Information Systems

Four Computer-BasedFour Computer-BasedManagement Information SystemsManagement Information Systems

Figure 17.3


Software DevelopmentsSoftware DevelopmentsSoftware DevelopmentsSoftware Developments

Key Developments

Operating systems Software that tells the computer how to run itself.

Applications software Provide for functions such as word processing, spreadsheets, and graphics.

Artificial intelligence Behavior performed by a machine that, if performed by a human, would be called intelligent.

Speech recognition software

Allows a computer to hear and act on spoken commands.


Types of Information SystemsTypes of Information SystemsTypes of Information SystemsTypes of Information Systems

• Transaction Processing Systems (TPS)Transaction Processing Systems (TPS)Systems designed to handle large volumes of Systems designed to handle large volumes of

routine transactions.routine transactions.• Were the first computer-based information systems Were the first computer-based information systems

handling billing, payroll, and supplier payments.handling billing, payroll, and supplier payments.

• Operations Information Systems (OIS)Operations Information Systems (OIS)Systems that gather, organize, and Systems that gather, organize, and

summarize comprehensive data in a form of summarize comprehensive data in a form of value to managers.value to managers.

• Can help managers with non-routine decisions such Can help managers with non-routine decisions such as customer service and productivity.as customer service and productivity.



• Decision Support Systems (DSS)Decision Support Systems (DSS)Provide interactive models to help middle Provide interactive models to help middle

and upper managers make better decisions.and upper managers make better decisions.• Excellent for unusual, non-programmed decisionsExcellent for unusual, non-programmed decisions

• Analyzes investment potential, new product pricing.Analyzes investment potential, new product pricing.

Executive Support System (ESS)Executive Support System (ESS)• Sophisticated version of a DSS matched a top Sophisticated version of a DSS matched a top

manager’s needs.manager’s needs.

Group Decision Support SystemGroup Decision Support System• An executive support system that links top managers An executive support system that links top managers

so that they can function as a team.so that they can function as a team.



• Expert Systems and Artificial IntelligenceExpert Systems and Artificial IntelligenceEmploy human knowledge captured in a Employ human knowledge captured in a

computer to solve problems usually requiring computer to solve problems usually requiring human insight.human insight.

• Uses artificial Intelligence to recognize, formulate, Uses artificial Intelligence to recognize, formulate, solve problems, and learn from experience.solve problems, and learn from experience.


The Impact and LimitationsThe Impact and Limitations of Information Systems of Information Systems

The Impact and LimitationsThe Impact and Limitations of Information Systems of Information Systems

• Management Information SystemsManagement Information SystemsHave provided managers with better Have provided managers with better

information, enabling better decision making.information, enabling better decision making.• Effective information systems can be a source of Effective information systems can be a source of

competitive advantage.competitive advantage.


The Impact and LimitationsThe Impact and Limitations of Information Systems (cont’d) of Information Systems (cont’d)


• Computer-based Information SystemsComputer-based Information SystemsAre increasingly associated with Are increasingly associated with

decentralization of managerial decision decentralization of managerial decision making.making.

Flattening (“delayering”) organizationsFlattening (“delayering”) organizations• Information systems reduce the need for the Information systems reduce the need for the

hierarchy to control the firm.hierarchy to control the firm.

• Managers control and coordinate using the system, Managers control and coordinate using the system, not workers.not workers.


How Computer-Based Information Systems How Computer-Based Information Systems Affect the Organizational HierarchyAffect the Organizational Hierarchy

How Computer-Based Information Systems How Computer-Based Information Systems Affect the Organizational HierarchyAffect the Organizational Hierarchy

Figure 17.4




• Horizontal Information FlowsHorizontal Information FlowsInformation networks can bridge functional Information networks can bridge functional

departments which allows information to flow departments which allows information to flow horizontally between departments, leading to horizontally between departments, leading to much higher productivity, quality, and much higher productivity, quality, and innovation.innovation.


Communication Flows at Tel Co. and Soft Communication Flows at Tel Co. and Soft Co.Co.

Communication Flows at Tel Co. and Soft Communication Flows at Tel Co. and Soft Co.Co.

Figure 17.5

Source: T. A. Stewart, “Managing in a Wired Company,” Fortune, July 11, 1994, 54. NETMAP® is a registered trademark for the NETMAP Software Systems, Alta Analytics, Inc. Westerville, OH.


Information Systems and Information Systems and Competitive AdvantageCompetitive Advantage

Information Systems and Information Systems and Competitive AdvantageCompetitive Advantage

• Competitive Advantages of Information SystemsCompetitive Advantages of Information SystemsImproved managerial decision-making capabilityImproved managerial decision-making capabilityReduced need for hierarchical control systemsReduced need for hierarchical control systemsIncreased efficiency by reducing requirements Increased efficiency by reducing requirements

for personnelfor personnel

• Virtual ProductsVirtual ProductsFirms can use their information systems to Firms can use their information systems to

custom tailor goods and services individually for custom tailor goods and services individually for each of their customers.each of their customers.


Limitations of Information SystemsLimitations of Information SystemsLimitations of Information SystemsLimitations of Information Systems

• Loss of the Human ElementLoss of the Human ElementInformation systems cannot present all kinds Information systems cannot present all kinds

of information accurately.of information accurately.• Thick information, which is rich in meaning and not Thick information, which is rich in meaning and not

quantifiable, is best suited to human analysis.quantifiable, is best suited to human analysis.

• Information systems should support face-to-face Information systems should support face-to-face communication, and not be expected to replace itcommunication, and not be expected to replace it


Limitations of Information Systems Limitations of Information Systems (cont’d)(cont’d)


• Causes of Difficult ImplementationsCauses of Difficult ImplementationsInformation systems can be hard to develop Information systems can be hard to develop

and put into service.and put into service.Consistent standards for systems do not exist.Consistent standards for systems do not exist.

• Makers of hardware use different standards which Makers of hardware use different standards which makes it hard to share information between systems.makes it hard to share information between systems.

Resistance by managers who do not use the Resistance by managers who do not use the system fully because out of fear of the system fully because out of fear of the technology or that they do not understand it.technology or that they do not understand it.

Political resistance to the system because it Political resistance to the system because it changes the way information flows in the firm changes the way information flows in the firm




• Difficult Implementations (cont’d)Difficult Implementations (cont’d)To avoid problems: To avoid problems:

• List major organization goals and the information List major organization goals and the information types require measure those goals.types require measure those goals.

• Audit the current system to verify that information Audit the current system to verify that information collected is accurate, reliable, timely, and relevant.collected is accurate, reliable, timely, and relevant.

• Build support for the system with workers.Build support for the system with workers.

• Create formal training programs.Create formal training programs.

• Emphasize that face-to-face contact is important.Emphasize that face-to-face contact is important.




• Technological factorsTechnological factorsConsistent standards for systems do not exist.Consistent standards for systems do not exist.

• Makers of hardware use different standards which Makers of hardware use different standards which makes it hard to share information between systems.makes it hard to share information between systems.

Resistance by Individuals: many managers do Resistance by Individuals: many managers do not use the system fully.not use the system fully.

• Some managers are afraid of technology or do not Some managers are afraid of technology or do not understand it.understand it.

Political Resistance: the information system Political Resistance: the information system changes the way information flows in the firm changes the way information flows in the firm

• Some managers feel threatened by it.Some managers feel threatened by it.

• Managers may think they will be laid-off.Managers may think they will be laid-off.

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