chapter 3 notes

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16 Dec 2010
Chapter 3 Managing Information Systems and Communication
Technology Notes
Information Management: An Overview
x every major firm’s business activities—designing services, ensuring product delivery and cash flow, evaluating personnel,
creating advertising—is linked to information systems
x information manager—the manager responsible for the activities needed to generate, analyze, and disseminate information that a
company needs to make good decisions
x information management—internal operation that arranges firm’s info resources to support business performance and outcomes
Data Versus Information
x data—raw facts and figures
x information—a meaningful, useful interpretation of data
x although business people often complain that they receive too much information, they usually mean that they get too much data
x challenge for businesses is to turn flood of data into information and to manage that information to their best advantage
Information Systems
x one response to this challenge has been the growth of the information system (IS)
x information system (IS)—an organized method of transforming data into information that can be used for decision making
x 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 information so that it goes only to those people who need it
x supplied information varies according to such factors as functional areas in which people work and their management levels
x at all levels, informational quality depends on an organization’s technological resources and on the people who manage them
New Business Technologies in the Information Age
The Expanding Scope of Information Systems
x relationship between information systems and organizations is among the fastest-changing aspects of business today
x at one time, IS applications were narrow in scope and technically focussed—processing payroll data, simulating new engineering
designs, compiling advertising expenditures
x but soon managers began using IS systems not merely to solve technical problems, but 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
x managers routinely use IS to decide on a firm’s products and markets for the next 5 to 10 years; the same database that helps
marketing analyze demographics for millions of customers is also used for higher-level applications as financial planning,
managing materials flows, and setting up electronic funds transfers with suppliers and customers
x another basic change in organizations is an increased interdependence between a company’s business strategy and its IS
Electronic Business and Communication Technologies
x pressure to maintain better communications and information systems are increasing as competition intensifies and as
organizations expand into global and e-business operations
x new electronic information technologies and more advanced data communication networks are meeting needs of such companies
Electronic Information Technologies
x electronic information technologies (EIT)—IS applications based on telecommunications technologies
x EITs use networks of appliances or devices to communicate information by electronic means
x 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
x six of most widely used innovations in todays digital business systems are as follows:
o fax machine—a machine that can quickly transmit a copy of documents or graphics over telephone lines
o voice mail—a computer-based system for receiving and delivering incoming telephone calls
o electronic mail (email) systemelectronic transmission of letters, reports, and other information between computers
o electronic conferencing—allows people to communicate simultaneously from different locations via telephone, video, or email
group software
o groupware—a system that allows two or more individuals to communicate electronically between desktop PCs
o commercial digital information services provide online information for both special-purpose and general topics
Data Communication Networks
x data communication networks—global networks that permit users to send electronic messages quickly and economically
x internet—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
x internet service provider (ISP)—a commercial firm that maintains a permanent connection to the internet and sells temporary
connections to subscribers
x World Wide Web—system with universally accepted standards for storing, retrieving, formatting, displaying info on internet
x web servers—dedicated workstations (large computers) that are customized for managing, maintaining, and supporting websites
x browser—software that enables a user to access information on the web
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x directories—features that help people find the content they want on the web; the user types in key words and the directory
retrieves a list of websites with titles containing those words
x search enginesoftware for searching web pages that does not pre-classify them into a directory
x intranets—a companys private network that is accessible only to employees via entry through electronic firewall
x firewall—hardware and software security systems that ensure that internal computer systems are not accessible to outsiders
x extranet—a network that allows outsiders limited access to a firm’s internal information systems
New Options for Organizational Design: The Networked Enterprise
Leaner Organizations
x widespread reductions in middle-management positions and the shrinkage of layers in organizational structure are possible
because information networks now provide direct communications between the top managers and workers at lower levels
x electronic information networks are replacing the operating managers who formerly communicated company policies,
procedures, or work instructions to lower-level employees
More Flexible Operations
x electronic networks allow businesses to offer customers greater variety and faster delivery services
x mass-customization—producing volumes of products or services, but giving customers choice of features and options they want
x ability to organize and store massive volumes of information is crucial, as are the electronic linkages among customers,
manufacturers, materials suppliers, and shippers
Increased Collaboration
x collaboration, not only among internal units but with outside firms as well, is on the rise because networked systems make it
cheaper and easier to contact everyone, whether other employees or outside organizations
x aided by intranets, more companies are learning that complex problems can be solved better by means of collaboration, either in
formal teams or through spontaneous interaction
x in the new networked organization, decisions that were once the domain of individuals are now shared as both people and
departments have become more interdependent, in contrast, it can be a shared responsibility because so much information is
accessible for evaluation from various perspectives
Greater Independence of Company and Workplace
x employees no longer work only at the office or the factory, nor are all of a companys operations performed at one location
x a company’s activities may also be geographically scattered but highly coordinated, thanks to a networked system
Improved Management Processes
x top manager can find out current status of any customer order, inspect productivity statistics for each workstation, and analyze
the delivery performance of any driver and vehicle
x enterprise resource planning (ERP)—large information systems for integrating all the activities of a company’s business units
Types of Information Systems
User Groups and System Requirements
x knowledge workers—employees whose jobs involve the use of information and knowledge as the raw materials of their work
Major Systems by Level
Transaction Processing Systems
x transaction processing systems (TPS)—applications of information processing for basic day-to-day business transactions
x typically, the TPS for first-level (operational) activities is well defined, with predetermined data requirements, and follows the
same steps to complete all transactions in the system
Systems for Knowledge Workers and Office Applications
x IS knowledge workers include both system analysts (and designers) and application (or systems) programmers
x system operations personnel—people who run a companys computer equipment
Knowledge-Level and Office Systems
x world-class firms are using system applications for knowledge workers to reduce product-design times, reduce production-cycle
times, and make faster deliveries to customers
x computer-aided design (CAD)—computer analysis and graphics programs that are used to create new products
x computer-aided manufacturing (CAM)—computer systems used to design and control equipment and tools for producing goods
Management Information Systems
x management information systems (MIS)—systems that support managers by providing daily reports, schedules, plans, budgets
Decision Support Systems (DSS)
x decision support system (DSS)—system helping manager consider alternatives when making decisions on complicated problems
Executive Support Systems
x executive support system (ESS)—quick-reference, easy-access application of IS specially designed for upper-level managers
Artificial Intelligence and Expert Systems
x artificial intelligence (AI)—construction and/or programming of computers to imitate human thought processes
x robotics—use of computer-controlled machines that perform production tasks
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