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Management Information Systems Management Information Systems for the Information Agefor the Information Age

Second Canadian EditionSecond Canadian Edition

Copyright 2004 Copyright 2004 The McGraw-Hill Companies, Inc. The McGraw-Hill Companies, Inc.

All rights reservedAll rights reserved

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Chapter 1Chapter 1

THE INFORMATION AGE IN THE INFORMATION AGE IN WHICH YOU LIVEWHICH YOU LIVE

Changing the Face of BusinessChanging the Face of Business

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OverviewOverview

Chapter 1

Today’s Economic Environment MIS Roles and Goals of IT

Information People Information Technology

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Today we live in an Information ageToday we live in an Information age

Where Where knowledge is powerknowledge is power..

Businesses are using information to gain Businesses are using information to gain and sustain a and sustain a competitive advantagecompetitive advantage..

IntroductionIntroduction

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Once you finish you program, you will enter Once you finish you program, you will enter the marketplace as a the marketplace as a knowledge workerknowledge worker..

Knowledge workerKnowledge worker works with and produces works with and produces information as a productinformation as a product. .

A knowledge worker outnumbers all other types A knowledge worker outnumbers all other types of workers by a 4-to-1 margin.of workers by a 4-to-1 margin.

Introduction ContinuedIntroduction Continued

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Where does MIS fit in today's’ information age Where does MIS fit in today's’ information age and why is it so important?and why is it so important?

Because it deals with the coordination and Because it deals with the coordination and use of 3 importantuse of 3 important organizational resourcesorganizational resources::

InformationInformation Information Technology andInformation Technology and PeoplePeople


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As a Formal Definition:As a Formal Definition:

Management information systemsManagement information systems (MIS)(MIS) deals with the planning for, development, deals with the planning for, development, management, and use of information management, and use of information technology tools to help people perform all technology tools to help people perform all tasks related to information processing and tasks related to information processing and management.management.


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Chapter 1



For a business to be successful today, it has to understand and operate in dynamic, fast-

paced and changing economic environment.

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Today’s Economic EnvironmentToday’s Economic Environment

To be a successful business in today’s economic To be a successful business in today’s economic environment, you must:environment, you must:

Know your competition Know your competition Competitive Intelligence. Competitive Intelligence. Know your customers using tools such as Customer Know your customers using tools such as Customer

Relationship Management, CRM.Relationship Management, CRM. Work closely with your business partners through Work closely with your business partners through

Supply Chain Management, SCM.Supply Chain Management, SCM. Know your organization inside and out.Know your organization inside and out.

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What does today’s economic environment entail?What does today’s economic environment entail? The E.ConomyThe E.Conomy The “Now” EconomyThe “Now” Economy The Global EconomyThe Global Economy The Arriving Digital EconomyThe Arriving Digital Economy

Today’s Economic Environment

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Telecommuting Virtual Workplace

eCommerce

Work anytime anyplace.

The E.conomyThe E.conomy


• Distance Learning• Telephone service

representative working from home

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Electronic commerceElectronic commerce – is commerce, but it is – is commerce, but it is commerce accelerated and enhanced by information commerce accelerated and enhanced by information technology.technology.

TelecommutingTelecommuting – the use of communications – the use of communications technologies to work in a place other than a central technologies to work in a place other than a central location.location.

Virtual WorkplaceVirtual Workplace – a technology-enabled workplace. – a technology-enabled workplace. No boundaries. No boundaries.


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Figure 1.1Figure 1.1Telecommuting –Telecommuting –Canadian Canadian StatisticsStatisticspage 6page 6


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The “Now” EconomyThe “Now” Economy

Characterized by the Characterized by the immediate accessimmediate access customers have to the ordering of customers have to the ordering of products and services.products and services.

An ATM is an example of a product in the An ATM is an example of a product in the “now” economy.“now” economy.


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M-commerceM-commerce – electronic – electronic commerce conducted over commerce conducted over a wireless device such as a wireless device such as a cell phone or personal a cell phone or personal digital assistant.digital assistant.

Team Work

I Want It!(p.8)


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M-commerce gives you the M-commerce gives you the ability to:ability to:

Buy and sell stocksBuy and sell stocks Bid on auctionsBid on auctions Obtain up-to-the-minute Obtain up-to-the-minute

weather forecasts.weather forecasts.

Team Work

I Want It!(p.8)


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The Global EconomyThe Global Economy

Global economyGlobal economy – one in which customers, – one in which customers, businesses, suppliers, distributors, and businesses, suppliers, distributors, and manufacturers all operate without regard to manufacturers all operate without regard to physical and geographical boundaries.physical and geographical boundaries.

Transnational firmsTransnational firms – produce and sell – produce and sell products and services in countries all over the products and services in countries all over the world.world.


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The Global EconomyThe Global Economy

Figure 1.2Figure 1.2 Total Import and Export Figures, 1998 to Total Import and Export Figures, 1998 to 20002000 (millions of Canadian dollars) (millions of Canadian dollars) page 9page 9


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The Arriving Digital EconomyThe Arriving Digital Economy

Digital economyDigital economy – marked by the electronic – marked by the electronic movement of all types of information including movement of all types of information including physiological information such as:physiological information such as: Voice recognitionVoice recognition Speech synthesizationSpeech synthesization BiometricsBiometrics HologramsHolograms


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Chapter 1



1. Information is one of the three components of MIS.2. Information leads to knowledge and knowledge is power.3. Knowledge comes from having timely access to information

and knowing what to do with it.

Information as a Key Resource

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There are three aspects to information:1. In order to work with information, you need to

understand it, and to do so you need to understand data. Data V.S. Information.

2. As a knowledge worker you work with and produce information hence you should consider the personal dimensions of information.

3. As an organization (yours or someone else's’) you also need to consider the organization’s dimensions of information.

MIS


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Data Versus InformationData Versus Information

Data Data are raw facts that describe a particular are raw facts that describe a particular phenomenon.phenomenon.

Some data could be temperature, name, age, or Some data could be temperature, name, age, or price of a movie rental.price of a movie rental.

If you are trying to decide what to wear, the price If you are trying to decide what to wear, the price of a movie rental would not help you in your of a movie rental would not help you in your decision but the temperature will.decision but the temperature will.

MIS


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Data Versus InformationData Versus Information

Therefore Therefore Information Information are data that have a are data that have a particular meaning within a specific context.particular meaning within a specific context.

Information could also be a group of data that Information could also be a group of data that are related to each other such a name, age, are related to each other such a name, age, gender and address to give the student’s gender and address to give the student’s personal information during registration.personal information during registration.

MIS


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Personal Dimensions of InformationPersonal Dimensions of Information

The personal dimensions of information are The personal dimensions of information are important since you are the knowledge worker important since you are the knowledge worker who works with and produces information. The who works with and produces information. The three personal dimensions of information three personal dimensions of information include:include: TimeTime LocationLocation FormForm

MIS


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MIS


Figure 1.3Figure 1.3Personal Personal Dimensions of Dimensions of InformationInformationpage 10page 10

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Time dimensionTime dimension Having access to information when you Having access to information when you

need it.need it. Having the correct information that Having the correct information that

describes the specific time period of interest.describes the specific time period of interest.

MIS


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Location dimensionLocation dimension Having access to information no matter where you Having access to information no matter where you

are including:are including:• AirplaneAirplane• Hotel roomHotel room• HomeHome• Student center at universityStudent center at university• At workAt work

MIS


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Form dimensionForm dimension Having information in a form most useable Having information in a form most useable

and understandable to you.and understandable to you. It is about accuracy. Having information that It is about accuracy. Having information that

is free of errors.is free of errors.

MIS


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Organizational Dimensions of InformationOrganizational Dimensions of Information

For your own business or while working For your own business or while working in a company, you need to consider the in a company, you need to consider the various organizational dimensions of various organizational dimensions of information, including:information, including:

Information flowsInformation flows Information granularity andInformation granularity and What information describes.What information describes.

MIS


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Organizational Dimensions of InformationOrganizational Dimensions of InformationInformation FlowsInformation Flows

Information in an organization flows in four Information in an organization flows in four basic directions:basic directions:

UpUpDownDownHorizontally andHorizontally andOutwardOutward(See figure 1.4)(See figure 1.4)

MIS


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In relation to the pyramid in figure 1.4In relation to the pyramid in figure 1.4 TOP: TOP:

Strategic managementStrategic management provides overall direction and guidance.provides overall direction and guidance.

THE SECOND LEVEL: THE SECOND LEVEL: Tactical management Tactical management develops the goals and strategies. develops the goals and strategies.

MIS


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In relation to the pyramid in figure 1.4In relation to the pyramid in figure 1.4

THE THIRD LEVEL:THE THIRD LEVEL: Operational managementOperational management manages and directs the day-to-day operations. manages and directs the day-to-day operations.

FINAL LEVEL:FINAL LEVEL: Non-management employeesNon-management employees perform daily activities.perform daily activities.

MIS


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Figure 1.4Figure 1.4An Organization, An Organization, Its Information Its Information Flows, and Flows, and Information Information GranularityGranularity

page 12page 12

MIS


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The four flows of information include:The four flows of information include: Upward – describes the current state of the Upward – describes the current state of the

organization based on its daily transactions.organization based on its daily transactions. Downward – consists of the strategies, goals, Downward – consists of the strategies, goals,

and directives that originate at one level and and directives that originate at one level and are passed to lower levels.are passed to lower levels.

MIS


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Information flows continuedInformation flows continued Horizontal – between functional business Horizontal – between functional business

units and work teams.units and work teams. Outward – information that is communicated Outward – information that is communicated

to customers, suppliers, distributors, and to customers, suppliers, distributors, and other partners for the purpose of doing other partners for the purpose of doing business.business.

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Organizational Dimensions of InformationOrganizational Dimensions of InformationGranularityGranularity

Information granularityInformation granularity – refers to the – refers to the extent of detail within the information.extent of detail within the information.

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Organizational Dimensions of InformationOrganizational Dimensions of InformationGranularityGranularity

At the top of the pyramid information is highly aggregated and summarized. The information is coarse and granular.

At the bottom of the pyramid, the information is ‘raw’ and highly detailed. The information is of fine granularity.

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Organizational Dimensions of InformationOrganizational Dimensions of InformationWhat information describesWhat information describes

What the information describes can include:What the information describes can include: Internal informationInternal information – specific operational aspects of – specific operational aspects of

the organization.the organization. External information External information – the environment surrounding – the environment surrounding

the organization.the organization. Objective information Objective information – something that is known.– something that is known. Subjective informationSubjective information – something that is – something that is

unknown.unknown.

MIS


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Chapter 1



People1. Set goals2. Carry out tasks3. Make decisions4. Serve customer5. Provide a stable and

reliable technology environment.

People as a Key Resource

When it comes to you (the people) there are two important issues to be aware of:

1. Information and technology literacy.

2. You ethical responsibilities.

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Information and Technology LiteracyInformation and Technology Literacy

The single most important resource in any The single most important resource in any organization is its people.organization is its people.

To be more precise, the most valuable To be more precise, the most valuable asset to the organization is your mind.asset to the organization is your mind.

MIS


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A Technology-literate knowledge workerA Technology-literate knowledge worker is a person who knows is a person who knows howhow and and whenwhen to to apply technology.apply technology.

HOW is knowing what technology to buy and HOW is knowing what technology to buy and how to exploit it benefits.how to exploit it benefits.

When is knowing the right time to apply When is knowing the right time to apply technology.technology.

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Information-literate knowledge workersInformation-literate knowledge workers:: Define what information they need.Define what information they need. Know how and where to obtain information.Know how and where to obtain information. Understand the information.Understand the information. Act appropriately based on the information to Act appropriately based on the information to

help the organization achieve the greatest help the organization achieve the greatest advantage.advantage.

MIS


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Your Ethical ResponsibilitiesYour Ethical Responsibilities

EthicsEthics – the principals and standards that guide – the principals and standards that guide our behavior toward other people.our behavior toward other people.

Ethics are different from laws as they are a Ethics are different from laws as they are a matter of personal interpretation.matter of personal interpretation.

Ethics have a right and wrong outcome Ethics have a right and wrong outcome according to different people.according to different people.

MIS


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Consider:Consider: Copying software you purchased, making copies for Copying software you purchased, making copies for

your friends and charging them for the copies.your friends and charging them for the copies. Making extra backup copies.Making extra backup copies. Giving out the phone numbers of your friends and Giving out the phone numbers of your friends and

relatives without their permission to a provider of relatives without their permission to a provider of some sort.some sort.

MIS


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Which ones are ethical / Which ones are ethical / legal or not?legal or not?

MIS


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Consider:Consider: Copying software you purchased, making copies for Copying software you purchased, making copies for

your friends and charging them for the copies. your friends and charging them for the copies. This is This is not ethical nor legal.not ethical nor legal.

Making extra backup copies. Making extra backup copies. It is ethical but only legal It is ethical but only legal to make one backup copyto make one backup copy..

Giving out the phone numbers of your friends and Giving out the phone numbers of your friends and relatives without their permission to a provider of relatives without their permission to a provider of some sort. some sort. Not ethical.Not ethical.

MIS


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Your Ethical ResponsibilitiesYour Ethical Responsibilities What about Hackers What about Hackers – very knowledgeable – very knowledgeable

computer user who uses his or her knowledge to computer user who uses his or her knowledge to invade other people’s computers.invade other people’s computers.

MIS


Figure 1.5Figure 1.5Acting Ethically Acting Ethically and Legallyand Legallypage 16page 16

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On Your Own

E-Mail: Electronic Mail or Expensive Mail?

(p. 17)

MIS


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Chapter 1



Information Technology is any computer-based tool that people use to work with information and support the information and information processing needs of an organization.

IT as a Key Resource

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Information technologyInformation technology

any computer-based tool that people use to any computer-based tool that people use to work with information and support the work with information and support the

information and information-processing information and information-processing needs of an organizationneeds of an organization

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There are two basic categories of There are two basic categories of technology:technology: Hardware Hardware – physical devices that make up a – physical devices that make up a

computer.computer. SoftwareSoftware – set of instructions that the – set of instructions that the

hardware executes to carry out a specific hardware executes to carry out a specific task.task.

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Key Technology CategoriesKey Technology Categories

Hardware categories Hardware categories Input devicesInput devices Output devicesOutput devices Storage devicesStorage devices Central processing unitCentral processing unit Random access memoryRandom access memory Telecommunications devicesTelecommunications devices Connecting devicesConnecting devices

On Your Own

Identifying Hardware

And Software(p. 21)

MIS


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Input devicesInput devices• KeyboardKeyboard• MouseMouse• Touch screenTouch screen• Game controllerGame controller• Barcode readerBarcode reader• ScannerScanner

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Output devicesOutput devices• PrinterPrinter

Dot matrixDot matrix Inkjet / Bubble jetInkjet / Bubble jet Laser jetLaser jet

• MonitorMonitor• SpeakersSpeakers• VideoVideo

MIS


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Key Technology CategoriesKey Technology Categories Storage devicesStorage devices

• Primary storagePrimary storage Random Access MemoryRandom Access Memory Read Only MemoryRead Only Memory

• Secondary StorageSecondary Storage Hard DriveHard Drive DVDDVD Floppy DiskFloppy Disk Tape backupTape backup Zip driveZip drive

MIS


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Central processing unitCentral processing unit• Pentium 4Pentium 4• AMD Athlon XP ThunderbirdAMD Athlon XP Thunderbird

MIS


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Random access memoryRandom access memory• SD RAMSD RAM• DD RAMDD RAM

MIS


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Telecommunications devicesTelecommunications devices• Telephone modemTelephone modem• DSL modemDSL modem• Cable modemCable modem• MicrowaveMicrowave• SatelliteSatellite

MIS


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Connecting devicesConnecting devices• Printer cablePrinter cable• Parallel portParallel port• Serial portSerial port• USB portUSB port• InfraredInfrared

MIS


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Software categoriesSoftware categories Application softwareApplication software Operating system softwareOperating system software Utility softwareUtility software

((See Figure 1.6 on page 19 for a complete overview of software categories.)

MIS


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Software categoriesSoftware categories Application softwareApplication software

• Word processingWord processing• Payroll softwarePayroll software• Spreadsheet softwareSpreadsheet software• Inventory management softwareInventory management software• GraphicsGraphics• Database management systemsDatabase management systems

MIS


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Software categoriesSoftware categories Operating system softwareOperating system software

• Windows XPWindows XP• Windows 2000Windows 2000• Windows MeWindows Me• Mac OSMac OS• LinuxLinux• UnixUnix

MIS


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Software categoriesSoftware categories Utility softwareUtility software

• Antivirus Antivirus • Screen saverScreen saver• Disk optimizationDisk optimization• UninstallerUninstaller

MIS


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Decentralized Computing and Shared InformationDecentralized Computing and Shared Information

Figure 1.7Figure 1.7Decentralized Decentralized Computing and Computing and Shared Shared InformationInformationpage 21page 21

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Decentralized Computing and Shared InformationDecentralized Computing and Shared Information

Decentralized computing Decentralized computing – environment in – environment in which an organization splits computing power which an organization splits computing power and locates it in functional business areas and and locates it in functional business areas and on knowledge workers’ desktops.on knowledge workers’ desktops.

Shared informationShared information – environment in which an – environment in which an organization’s information is organized in one organization’s information is organized in one central location.central location.

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Chapter 1



Roles and Goals of IT relates to the reasons you with to buy, create, implement, use, and

integrate IT into your business strategy.

Roles and Goals of Roles and Goals of Information TechnologyInformation Technology

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1.1. Increase employee productivityIncrease employee productivity

2.2. Enhance decision makingEnhance decision making

3.3. Improve team collaborationImprove team collaboration

4.4. Create business partnerships and Create business partnerships and alliancesalliances

5.5. Enable global reachEnable global reach

6.6. Facilitate organizational transformationFacilitate organizational transformation

Roles and Goals of IT

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1 - Increase Employee Productivity1 - Increase Employee Productivity

Online transaction processing (OLTP)Online transaction processing (OLTP) – – the gathering of input information, the gathering of input information, processing that information, and updating processing that information, and updating existing information to reflect the gathered existing information to reflect the gathered and processed information.and processed information.


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Transaction processing system (TPS) Transaction processing system (TPS) – – processes transactions that occur within an processes transactions that occur within an organization.organization.

Customer-integrated system (CIS)Customer-integrated system (CIS) – An – An extension of a TPS that places technology in the extension of a TPS that places technology in the hands of an organization’s customers and allows hands of an organization’s customers and allows them to process their own transactions.them to process their own transactions.


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Figure 1.9Figure 1.9Transaction Transaction Processing and Processing and Customer-Integrated Customer-Integrated SystemsSystemspage 24page 24


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2 - Enhance Decision Making2 - Enhance Decision Making

Online analytical processing (OLAP)Online analytical processing (OLAP) – the – the manipulation of information to support decision making.manipulation of information to support decision making.

Artificial intelligenceArtificial intelligence – the science of making machines – the science of making machines imitate human thinking and behavior.imitate human thinking and behavior.

Neural networkNeural network – an artificial intelligence that is capable – an artificial intelligence that is capable of finding and differentiating patterns.of finding and differentiating patterns.


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Executive information system (EIS)Executive information system (EIS) – a – a highly interactive IT system that allows you highly interactive IT system that allows you to first view highly summarized information to first view highly summarized information and then choose how you would like to and then choose how you would like to see greater detail, which may alert you to see greater detail, which may alert you to potential problems or opportunities.potential problems or opportunities.


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Figure 1.10Figure 1.10Drilling Down with an Executive Information SystemDrilling Down with an Executive Information Systempage 25page 25


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3 - Improve Team Collaboration3 - Improve Team Collaboration

Collaboration system Collaboration system – designed specifically to – designed specifically to improve the performance of teams by supporting improve the performance of teams by supporting the sharing and flow of information.the sharing and flow of information.

GroupwareGroupware – software components that – software components that supports the collaborative efforts of a team.supports the collaborative efforts of a team.


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3 - Improve Team Collaboration3 - Improve Team Collaboration

Groupware contains support for:Groupware contains support for: Team dynamicsTeam dynamics Document management Document management

• Group document databaseGroup document database – acts as a powerful – acts as a powerful storage facility for organizing and managing all storage facility for organizing and managing all documents related to specific teams.documents related to specific teams.

Applications developmentApplications development


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4 - Create Business Partnerships and 4 - Create Business Partnerships and AlliancesAlliances

Interorganizational Interorganizational system (IOS) system (IOS) – automates – automates the flow of information the flow of information between organizations to between organizations to support the planning, support the planning, design, development, design, development, production, and delivery of production, and delivery of products and services.products and services.

Team Work

Finding Business Partners and Alliances on

The Web(p. 27)


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4 - Create Business Partnerships and 4 - Create Business Partnerships and AlliancesAlliances

Electronic data interchange (EDI) Electronic data interchange (EDI) – the – the direct computer-to-computer transfer of direct computer-to-computer transfer of transaction information contained in transaction information contained in standard business documents, such as standard business documents, such as invoices and purchase orders, in a invoices and purchase orders, in a standard format.standard format.


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5 - Enable Global Reach5 - Enable Global Reach

Business today is global business.Business today is global business.

CultureCulture – the collective personality of a – the collective personality of a nation or society, encompassing language, nation or society, encompassing language, traditions, currency, religion, history, traditions, currency, religion, history, music, and acceptable behavior, among music, and acceptable behavior, among other things.other things.


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6 - Facilitate Organizational 6 - Facilitate Organizational TransformationTransformation

Organizational transformation is necessary Organizational transformation is necessary to respond to the ever-changing needs to respond to the ever-changing needs (and wants) of today’s marketplace.(and wants) of today’s marketplace.

Blockbuster now provides movies on a Blockbuster now provides movies on a pay-per-view rental basis through cable.pay-per-view rental basis through cable.


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Closing Case Study OneClosing Case Study One You and Your Information You and Your Information

Information travels with you and is captured and Information travels with you and is captured and stored by a number of organizations.stored by a number of organizations.

Trust and accuracy of information is important.Trust and accuracy of information is important.

Do you trust organizations to maintain accurate Do you trust organizations to maintain accurate information about you?information about you?

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Closing Case Study TwoClosing Case Study TwoHow Much of Your Personal Information How Much of Your Personal Information

Do You Want Businesses to Know?Do You Want Businesses to Know? Businesses need information about you to Businesses need information about you to

provide the best possible products and provide the best possible products and services.services.

How much of your information do you want How much of your information do you want others to be able to access?others to be able to access?

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Summary Summary Student Learning Outcomes Student Learning Outcomes

1.1. Describe the information age and the role of Describe the information age and the role of knowledge workers within it.knowledge workers within it.

2.2. Define management information systems (MIS).Define management information systems (MIS).3.3. Describe key factors shaping today’s economic Describe key factors shaping today’s economic

environment.environment.4.4. Validate information as a key resource and describe Validate information as a key resource and describe

both personal and organizational dimensions of both personal and organizational dimensions of information.information.

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Summary Summary Student Learning OutcomesStudent Learning Outcomes

5.5. Define how people are the most important Define how people are the most important organizational resource, their information and organizational resource, their information and technology literacy challenges, and their ethical technology literacy challenges, and their ethical responsibilities.responsibilities.

6.6. Describe the important characteristics of information Describe the important characteristics of information technology (IT) as a key organizational resource.technology (IT) as a key organizational resource.

7.7. List and describe the six roles and goals of information List and describe the six roles and goals of information technology in any organization.technology in any organization.

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Summary Summary Assignments & ExercisesAssignments & Exercises

1.1. Surveying the global economySurveying the global economy2.2. Finding trust in trusteFinding trust in truste3.3. Reporting on internet statistics by business Reporting on internet statistics by business

sectorsector4.4. Learning about an MIS majorLearning about an MIS major5.5. Reviewing the 100 best companies to work forReviewing the 100 best companies to work for6.6. Redefining business operations through it Redefining business operations through it

innovationinnovation

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Visit the Web to Learn MoreVisit the Web to Learn Morewww.mcgrawhill.ca/college/haagwww.mcgrawhill.ca/college/haag

Job databasesJob databases Electronic resumesElectronic resumes Searching newspapers for job adsSearching newspapers for job ads Locating internshipsLocating internships Interviewing and negotiating tipsInterviewing and negotiating tips Organization sites and job postingsOrganization sites and job postings Employment opportunities with the governmentEmployment opportunities with the government

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