3Learning ObjectivesDifferentiate between data and information, and list the attributes of useful informationDescribe three reasons why managers must have access to information to perform their tasks and roles effectively.Describe the computer hardware and software innovations that have created the IT revolution.
4Learning ObjectivesDifferentiate among seven different kinds of management information systems.Explain why managers are using IT to build strategic alliances and network structures to increase efficiency and effectiveness
5Information and the Manager’s Job DataRaw, unsummarized, and unanalyzed facts.InformationData that are organized in a meaningful fashion2
7Discussion QuestionWhich factor is most important in affecting the usefulness of information?QualityTimelinessRelevanceCompletenessThere is no one best answer. All may be most or least important depending on the situation.
8Factors Affecting the Usefulness of Information Figure 18.1
9What is Information Technology? Information Technology – set of methods or techniques for acquiring, organizing, storing, manipulating, and transmitting information
10Question?What is the specific form of IT that managers utilize to generate the detailed information they need to perform their roles effectively?Management information systemDecision support systemDecision information systemManagement support systemThe correct answer is “A” – management information system. See next slide.
11What is Information Technology? Management Information System – specific form of IT that managers utilize to generate the specific, detailed information they need to perform their roles effectively
12What is Information Technology? Managers need information for three reasons:To make effective decisionsTo control the activities of the organizationTo coordinate the activities of the organization
13Information and Decisions Most of management is about making decisionsTo make effective decisions, managers need information, both from inside and outside the organization
14Information and Control Managers achieve control by:Establishing measurable goalsMeasuring actual performanceComparing actual performance with goalsTaking any corrective action
15Information and Coordination Coordination problems that managers face in managing global supply chains are increasingManagers have adopted sophisticated IT that helps them coordinate the flow of materials, semifinished goods, and finished goods throughout the world
16The Effects of Advancing IT IT revolution began with the development of the first computersModern computers can read, process, and store billions of instructions per secondThis power forms the foundation of the ongoing IT revolution6
17The Effects of Advancing IT Products resulting from advancing ITPowerful microprocessors and PCs, high-bandwidth wireless smart phones, sophisticated word-processing software, expanding computer networks, inexpensive digital cameras, useful online information and retailing services
18The Effects of Advancing IT IT helps create new product opportunities that managers and their organizations can take advantage ofIT creates new and improved products that reduce or destroy demand for older, established products
19IT and the Product Life Cycle Refers to the way in which the demand for a product changes in a predictable way over time
21A Product Life Cycle Embryonic stage Growth stage Product has yet to gain widespread acceptanceCustomers are unsure what a product has to offerGrowth stageMany consumers are buying the product for the first timeDemand increases rapidly
22A Product Life Cycle Mature stage Decline stage Market peaks because most customers have already bought the productDemand is typically replacement demandDecline stageAdvancing IT leads to the development of a more advanced product making the old one obsolete
23A Product Life CycleAdvances in IT are one of the most important determinants of the length of a product’s life cycleThe shorter the length of a product’s life cycle because of advancing IT the more important it is to innovate products quickly and continuously
24Types of Management Information Systems Computer NetworksNetworkingThe exchange of information through a group or network of interlinked computersServers are powerful computers that relay information to client computers connected on a Local Area Network (LAN).Mainframes are large computers processing vast amounts of information .The Internet is a world wide network of computers.8
25A Typical Four-Tier Information System Figure 18.3
26Types of Management Information Systems Operating system softwaresoftware that tells computer hardware how to runApplications softwaresoftware designed for a specific task or use
27Six Computer-Based Management Information Systems Figure 18.4
28The Organizational Hierarchy Traditionally, managers have used the organizational hierarchy as the main system for gathering information necessary to make decisions and coordinate and control activities
29The Organizational Hierarchy DrawbacksCan reduce timeliness of informationReduces quality of informationTall structure can make for an expensive information system
30Types of Information Systems Transaction Processing SystemsSystems designed to handle large volumes of routine transactions.Were the first computer-based information systems handling billing, payroll, and supplier payments.11
31Types of Information Systems Operations Information SystemsSystems that gather, organize, and summarize comprehensive data in a form of value to managers.Can help managers with non-routine decisions such as customer service and productivity.
32Types of Information Systems Decision Support SystemsProvides computer-built models that help managers make better nonprogrammed decisions.New productive capacity, new product development, launch a new promotional campaign, enter a new market or expand internationally12
33Types of Information Systems Executive Support SystemSophisticated version of a decision support system designed to meet the needs of top managersGroup Decision Support SystemAn executive support system that links top managers so that they can function as a team.
34Expert Systems and Artificial Intelligence Behavior by a machine that, if performed by a human being, would be called “intelligent”Already possible to write programs that can solve problems and perform simple tasks12
35Expert Systems and Artificial Intelligence Most advanced management information systems availableSystem that employs human knowledge, embedded in computer software, to solve problems that ordinarily require human expertise
36Enterprise Resource Planning Systems multi-module application software packages that allow a company to link and coordinate the entire set of functional activities and operations necessary to move products from the initial product design stage to the final customer stage
37Enterprise Resource Planning Systems Help each individual function improve its functional-level skillsImprove integration among all functions so that they work together to build a competitive advantage for the company
38Types of Information Systems E-Commerce SystemsTrade that takes place between companies, and between companies and individual customers, using IT and the Internet
40E-Commerce Systems Business-to-business (B2B) trade that takes place between companies using IT and the Internet to link and coordinate the value chains of different companies
41E-Commerce Systems B2B marketplace Internet-based trading platform set up to connect buyers and sellers in an industry
42Types of E-Commerce Business-to-customer (B2C) trade that takes place between a company and individual customers using IT and the Internet
43Strategic Alliances, B2B Network Structures, and IT formal agreement that commits two or more companies to exchange or share their resources in order to produce and market a product
44Strategic Alliances, B2B Network Structures, and IT formal series of global strategic alliances that one or several organizations create with suppliers, manufacturers, and/or distributors to produce and market a product
45How Computer-Based Information Systems Affect the Organizational Hierarchy Figure 18.6
46The Impact and Limitations of Information Systems Horizontal Information FlowsInformation networks can bridge functional departments which allows information to flow horizontally between departments, leading to much higher productivity, quality, and innovation.
47Communication Flows at Tel Co. and Soft Co. Figure 18.7
48Question?What is composed of people linked by IT who rarely see one another face-to-face?Knowledge workersBoundaryless organizationLimitless firmWeb 2.0 organizationThe correct answer is “B” – boundaryless organization. See next slide.
49Boundaryless Organization composed of people linked by IT who rarely see one another face-to-facefunctional experts who form an alliance with an organization
50Boundaryless Organization Knowledge management systemcompany-specific virtual information system that systematizes the knowledge of its employees and facilitates the sharing and integrating of expertise within and between functions and divisions through real-time, interconnected IT
51Limitations of Information Systems Loss of the Human ElementInformation systems cannot present all kinds of information accurately.Thick information, which is rich in meaning and not quantifiable, is best suited to human analysis.Information systems should support face-to-face communication, and not be expected to replace it
52Limitations of Information Systems Causes of Difficult ImplementationsInformation systems can be hard to develop and put into service.Consistent standards for systems do not exist.Makers of hardware use different standards which makes it hard to share information between systems.
53Limitations of Information Systems To avoid problems:List major organization goals and the information types require measure those goals.Audit the current system to verify that information collected is accurate, reliable, timely, and relevant.Investigate other sources of informationBuild support for the system with workers.Create formal training programs.Emphasize that face-to-face contact is important.
54Movie Example: Las Vegas When is it necessary to change technology that is functional?Information TechnologyLas Vegas Season 1“Hellraisers and Heartbreakers” episodeLas Vegas is a series that takes place in the fictional Montecito casino in Las Vegas, NV. Ed Deline (James Caan), an ex-CIA agent, is in charge of casino security. Each episode involves stories with the casino guests and the casino employees, ranging from various scams to personal issues.In this episode, the Montecito is getting new surveillance equipment. Ed’s former partner in the CIA, Jack Keller (Alec Baldwin) is handling the installation. In this scene, Jack is describing the changes to Ed and Danny (Josh Dushamel).When is it necessary to change technology that is functional?How should a manager handle employees’ resistance to technology changes?Students should discuss the need to keep up with competition or ways that new technology can give a firm a competitive advantage.