Chapter 15Information Management Systems

Chapter 15Information Management Systems

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

Describe the seven characteristics of useful information
Describe the three functions of an effective information system (IS)
Describe the five guidelines for establishing an information system (IS)
Describe the basic functions of a computerized information system (CIS)
Describe the two basic data processing modes
Discuss the various methods used for linking computer systems
Explain the purposes of decision support systems (DSSs)
Discuss the four challenges that must be met by managers of an information system

KEY TERMS

application programs
artificial intelligence (AI)
batch processing
computerized information system (CIS)
data
data center
database
decision support system (DSS)
digital
end-user computing
enterprise resource planning system (ERP) executive information system (EIS) / expert system
group decision support system (GDSS)
information
information system (IS)
information technologies (IT)
knowledge management (KM)
management information system (MIS)
networking
office automation system (OAS)
operating system
transaction processing
transactional processing system (TPS)

CHAPTER OUTLINE

INTRODUCTION
INFORMATION AND THE MANAGER
MANAGEMENT INFORMATION SYSTEMS
FUNCTIONS OF AN EFFECTIVE INFORMATION SYSTEM (IS)
Guidelines for Developing an Information System (IS)
COMPUTERIZED INFORMATION SYSTEMS
Computer Operations
DATA PROCESSING MODES
LINKING OMPUTER SYSTEMS
CIS MANAGEMENT TOOLS
Tools
Decision Support Systems
Executive Information Systems
MANAGING INFORMATION SYSTEMS
Overcoming Resistance
Enabling Users
Outsourcing
Evaluating Results

LECTURE OUTLINE

The outline below (the lecture outline) is referenced to the above chapter outline and contains supplementary material to enhance your discussion of the chapter, but it is organized somewhat differently. As a result, you have a choice: by using what is in the outline below, (1) you may present the above chapter outline material in a different sequence, or (2) you may use the chapter outline references in the outline below to present the lecture outline material in the same sequence as the chapter outline.

I.INTRODUCTION (CHAPTER OUTLINE: SECTION I)

II.INFORMATION AND THE MANAGER (CHAPTER OUTLINE: SECTION II)

A.Characteristics of Useful Information

1.Data are unprocessed facts and figures; not all data is useful.

2.Data must be sorted, summarized, processed, and distributed to the users who have a need for the data.

3.Information is data that has been selected, processed, and organized for useful purposes. Data may or may not be informational.

4.Information technologies (IT) are manual and/or electronic means for creating, processing, and handling intellectual capital as well as facilitating communication.

5.An information system (IS) enables employees to share intellectual capital and exploit the opportunities therein.

B.Types of Information Needed by Managers

1.Managers at all levels of an organization continually need to be provided with accurate, timely, and useful information.

2.Functional information regarding marketing, production, finance, and personnel is required by line and staff managers.

III.INFORMATION MANAGEMENT SYSTEMS

A.Characteristics of an Effective Information System (IS)

1.An IS is similar to controls. That is, to be effective an IS must possess specific qualities.

2.The characteristics of an effective IS:

a.Meet organizational goals.

b.Provide information flow.

c.Deliver the correct quality and quantity of information.

B.Guidelines for Developing an Information System (IS)

1.An information system (IS) is a formal method of providing accurate and timely information so that a manager can make decisions and carry out the managerial functions and operations effectively.

2.Both internal and external sources supply information to IS systems.

3.A survey must be conducted to determine those users who will be served.

4.When establishing or improving an IS, the following guidelines should be met:

a.Involve users in the system’s design.

b.Establish clear lines of authority and direction.

c.Establish clear procedures.

d.Ensure understanding between specialists and management.

e.Ensure that the staff fits the service requirements.

5.MIS and IS are acronyms that can be interchanged.

IV.COMPUTERIZED INFORMATION SYSTEMS (CHAPTER OUTLINE: SECTION IV)

A.Computer Operations

1.A computerized information system (CIS) is an MIS built upon computer hardware and software to collect and process data as well as store and disseminate the resulting information.

2.Computerized information systems may be centralized or decentralized.

3.A CIS functioning both at the top and at other management levels is said to be decentralized. Each unit of a decentralized CIS is called a data center and operates to serve its unit’s members with their own sets of hardware, software, and specialists (machine operators and programmers).

4.Decentralized CISs result in end-user computing: the use of information technology (IT) by people who are free from control by top management.

5.The three problems frequently associated with decentralized CISs are:

a.Inability to control.

b.Duplication of expensive software and hardware.

c.Orderly, authorized access to both the organization’s systems and to its database (sometimes called data bank)—a collection of data arranged to ease and speed retrieval.

B.Data Processing Modes (CHAPTER OUTLINE: SECTION v)

1.With batch processing, data is collected over time and entered into data banks according to prescribed policies and procedures.

2.In transactional processing, data is received about a company’s ongoing operations and entered into data banks as each transaction occurs.

3.Bank automated-teller machines (ATMs) record transactions in the computer’s memory as they occur; travel agents book reservations directly into the database.

4.Most CISs are built around transactional processing to yield the best results.

C.Linking Computer Systems (CHAPTER OUTLINE: SECTION VI)

1.The electronic linking of two or more computers is called networking (not to be confused with the information system of personal contacts often used in career development.

2.A CIS can communicate outside an organization as well as among insiders. Wal-Mart and Kmart use distributed data processing (DDP) in their linkups with suppliers.

D.CIS Management Tools (CHAPTER OUTLINE: SECTION VII)

1.The decision support system (DSS) is an analytic model that joins the manager’s experience, judgment, and intuition with the computer’s data access, display, and calculation strengths. The DSS allows “thinking” managers to interact with linked programs and databases through the keyboard.

2.Specialized end-user decision support programs include the “expert system,” software that stores the knowledge of a group of authorities for access by non-experts faced with the need to make topic-related decisions.

3.Another variant decision support system is the group decision support system, or GDSS. The GDSS allows a group focusing on a problem, like a product or process design team, to interact with one another and exchange information, data, and ideas. GDSSs are used in brainstorming and problem-solving sessions.

4.An executive information system (EIS) is a decision support system custom designed to facilitate executive decision-making. Typical executive uses include forecasting; strategic planning; performing risk and cost-benefit analyses; running business game simulations; linear programming; monitoring quality, productivity, ethics, and social responsibility efforts; and monitoring critical success factors and stakeholder expectations.

V.MANAGING INFORMATION SYSTEMS (CHAPTER OUTLINE: SECTION VIII)

A.An Effective IS:

1.Overcomes resistance.

2.Enables employees to use the system.

3.Determines in-house capabilities versus outsourcing opportunities.

4.Evaluates the results.

B.Overcoming Resistance

1.Computers and computer systems can present a threat to managers and employees.

2.Guidance and support must be furnished from top management.

3.Many employees perceive threats to their authority, job security, career, and social relationships when computers are mentioned.

4.Change and retraining must be addressed when computers are installed.

5.Traditional and comfortable methods of work cause many employees at all levels to resist changing their old and safe habits.

C.Outsourcing

1.The decision to outsource is not made on cost alone but on various considerations related to improving effectiveness.

D.Evaluating Results

1.The success of CIS is measured by and directly related to the overall improved management of an organization.

2.Companies must hire talented system professionals, train their users, and invest in quality equipment and software.

3.Users must have faith and confidence in the systems they are using.

4.Systems must be flexible in order to change and update as required.

SUGGESTED RESPONSES TO REVIEW QUESTIONS

1.What makes information valuable to decision makers? What makes it useful?

For information to be valuable or useful, it must be understandable, reliable, relevant, complete, concise, timely, and cost-effective.

2.How should an organization and its strategic business units go about establishing their information systems?

a.Involve users in the system’s design.

b.Establish clear lines of authority and direction for the MIS personnel.

c.Establish clear procedures for gathering, sorting, interpreting, displaying, storing, and distributing data and for interacting with the system.

d.Where technical specialists are used, ensure that both they and the managers they support fully understand the specialists’ functions and roles.

e.Build an MIS staff consistent with service requirements.

3.How can an organization evaluate the effectiveness of its information systems?

An MIS or IS must be designed to meet specific users’ needs, provide the proper flow of information, and deliver the correct quality and quantity of useful information.

4.What basic functions must any CIS perform for its users?

Refer to the text for a complete account of the various functions and accompanying descriptions of a CIS.

5.What data-processing modes would you prescribe for each of the following? (a) handling airline reservations, (b) handling total sales by department for each day of operations, (c) measuring the quality of cookies on an assembly line.

Because of the “open” nature of this question, student answers will vary. This question could be used by the instructor as a group or class decision/discussion tool. Students should highlight the two basic modes: batch processing and data processing. Under the first, data is collected over time and entered into data banks according to prescribed policies and procedures. With data processing, information is received about a company’s ongoing operations and entered into data banks as each transaction occurs.

6.How do local area networks (LANs) operate? Wide area networks (WANs)? Why do most companies usually require both?

LANs link computers throughout a facility by “bridging” various component devices. WANs network wider or expanded locations, such as remote areas and/or linked phone lines to include Internet communications. The choices for LANs or WANs depend upon the proximity of customers, partners, suppliers, and/or various users.

7.What is a decision support system (DSS)? What kinds exist?

a.The decision support system (DSS) is an analytic model that joins the manager’s experience, judgment, and intuition with the computer’s data access, display, and calculation strengths. The DSS allows “thinking” managers to interact with linked programs and databases through the keyboard.

b.Specialized end-user decision support programs include the “expert system,” software that stores the knowledge of a group of authorities for access by non-experts faced with the need to make topic-related decisions.

c.Another variant decision support system is the group decision support system, or GDSS. The GDSS allows a group focusing on a problem, like a product or process design team, to interact with one another and exchange information, data, and ideas. GDSSs are used in brainstorming and problem-solving sessions.

8.How does a company usually decide if an IS or IT function should be outsourced? If they are operating effectively? If people are using them to their best advantage?

Decisions to in-house or outsource IT/IS functions/operations are based upon strategic advantages, i.e., is it in our best advantage, position, or leverage regarding our competitors? The optimum effectiveness of these choices is assessed by cost, time, flexibility, control, and profit.