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Chapter 3

MGTA02H3 Chapter Notes - Chapter 3: Enterprise Resource Planning, The Hershey Company, Firstline

Management (MGT)
Course Code
Chris Bovaird

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MGTA04 / 01
Chapter 3: Managing Information Systems and Communication Technology
- Managers now turn to digital technology as an integral part of organizational resources and
as a means of conducting everyday business
- (YHU\PDMRUILUP¶VEXVLQHVVDFWLYLWLHV± designing services, ensuring product delivery and
cash flow, evaluating personnel, creating advertising are all linked to information systems
- Information managers are responsible for the activities needed to generate, analyze, and
disseminate information that a company needs to make good decisions
resources to support business performance and outcomes
Data versus Information
- Data are raw facts and figures (e.g. the birth rate is rising slowly)
- Information is interpreted data that is meaningful
- The challenge for businesses is to turn a flood of data into information and to manage that
information to their best advantage
Information Systems
- Information system (IS) is an organized method of transforming data into information
that can be used for decision making
- IS managers must first determine what information is needed then they must gather the
data and apply the technology to convert data into information. They must also control the
flow of the information so it goes only to those who need it
people who manage the
- Employees at every level in the organization uses information systems to improve
performance (e.g. assists in scheduling day-to-day vehicle trips)
- The emergent role of IS results from rapid developments in electron technologies that
allow faster and broader flows of information and communications
The Expanding Scope of Information Systems
- The relationship between information systems and organizations is among the fastest-
changing aspect of business today
- In the past, IS applications were narrow in scope and technically focused (e.g. processing
payroll data), now managers use IS systems to analyze management problems especially
for control purposes, applying quality-control standards to production, comparing costs
against budgeted amounts, keeping records on employee absences and turnover
years (crucial in planning)
- Another change in organizations is an increased interdependence bHWZHHQDFRPSDQ\¶V
business strategy and its IS (different choices of business strategy such as being the low-
cost provider or the high-quality provider requires an IS that can support that strategy)
Information Management: An Overview (pg 47 ± 48)
New Business Technologies in the Information Age (pg. 48 ± 57)

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MGTA04 / 02
Electronic Business and Communications Technologies
- The pressure to maintain better communications and information systems are increasing as
competition intensifies and as organizations expand into global and ebusiness operations
Electronic Information Technologies
- Electronic information technologies (EIT) are IS applications based on
telecommunications technologies. They use networks of appliances or devices (e.g. cell
phones & computers) to communicate information by electronic means
- EITs enhance the performance and productivity of general business activities by
performing two functions:
1. Providing coordination and communication within the firm
2. Speeding up transactions with other firms
1. Fax machine: a machine that can quickly transmit a copy of documents or
graphics over telephone lines
2. Voice mail: a computer-based system for receiving and delivering incoming
telephone calls, this way, phone calls are never missed
3. Electronic mail (email) system: electronic transmission of letters, reports, and
other information between computers. Email substitutes flood of paper in offices
4. Electronic conferencing: allows people to communicate simultaneously from
different locations via telephone, video, or email group software. Two forms:
Data conferencing ± allows people in different locations to work on the
same document
Videoconferencing ± allows participants to see one another on a video
screen while the teleconference is in progress
5. Groupware: a system that allows two or more individuals to communicate
electronically between desktop PCs. Groupware is especially useful when members
work together regularly and rely on intensive information sharing
6. Digital information services ± provide online information for both special-purpose
topics (e.g. Lexis, specifically a source for legal-research information) and general
topics (e.g. America Online offers a variety of general-interest information)
Data Communication Networks
- Data communication networks are global networks that permit users to send electronic
messages quickly and economically (e.g. the internet)
- The Internet
o The internet is a gigantic network of networks that serves millions of computers,
offers information on business, science, and government, and provides communication
flows among more than 170,000 separate networks around the world
o The internet has gained popularity since it can transmit information quickly and at low
cost (eliminates long-distance phone calls, express mail, and fax machines as a
standard means of communication)
o Internet service provider (ISP) is a commercial firm that maintains a permanent
connection to the internet and sells temporary connections to subscribers for a fee
- The World Wide Web
o The world wide web is a system with universally accepted standards (common
language) for storing, retrieving, formatting, and displaying information on the internet
o To access the web, users must specify the Uniform Resource Locator (URL) (e.g. Air
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