1 Management Information Systems M Agung Ali Fikri, SE. MM.

2 Chapter 1 Introduction to Information Systems

3 Learning Objectives ► Understand how computer hardware has evolved to its present level of sophistication ► Know the basics of computer and communications architectures. ► Understand the distinction between physical and virtual systems. ► Describe how business applications have evolved from an initial emphasis on accounting data to the current emphasis on information for problem solving.

4 Learning Objectives (Cont’d) ► Understand what enterprise resource planning systems are and the reasons for their popularity. ► Know how to tailor information systems to managers based on where they are located in the organizational structure and what they do. ► Understand the relationship between problem solving and decision making and know the basic problem-solving steps. ► Know what innovations to expect in information technology.

5 History of Information Systems ► Evolution in computer hardware  Mainframe  Multitasking ► Smaller computers  Minicomputers  Microcomputers  Personal computers (PC)

6 Intro to Computer Architecture ► Moore’s Law – computer power doubles every year for a given cost. ► Hardware – processor, keyboard, monitor, mouse, printer, etc. ► Software – application, operating, etc. ► Used to support managerial decision making.

7 Computer Architecture (Cont’d) ► Modem – hardware device that modulates the digital signals from a computer into analog signals (telephone system), and vice versa. ► Direct communication standards  Between computers is much faster. ► Wireless networks

8 Figure 1.5 Communications Architecture

9 Evolution in Computer Applications ► Information systems are virtual systems that enable management to control the operations of the physical system of the firm. ► Physical system – tangible resources such as materials, personnel, machines, and money. ► Virtual system – information resources that are used to represent the physical system.

10 Figure 1.6 The Physical System of the Firm

11 Computer Applications (Cont’d) ► Open system is a firm’s physical system that interacts with its environment by means of physical resource flows. ► Closed system is one that does not communicate with its environment.

12 Transaction Processing Systems ► Data – facts and figures that are generally unusable due to their large volume and unrefined nature. ► Information – processed data that is meaningful; tells users something. ► Transaction Processing System (TPS) processes data that reflects the activities of the firm.

13 Figure 1.7 A Model of a Transaction Processing System

14 Management Information Systems ► Management Information System (MIS) is a computer-based system that makes information available to users with similar needs. ► Report-writing software – produces both periodic and special reports. ► Mathematical models – produces information as a simulation of the firm’s operations.

15 Figure 1.8 A MIS Model

16 MIS (Cont’d) ► Information provided by MIS describes the firm or one of its major systems.  What has happened in the past.  What is happening now.  What is likely to happen in the future. ► Interorganizational information system (IOS) – is formed when a firm interacts with others, such as suppliers.

17 Virtual Office Systems ► Office automation – use of electronics to facilitate communication. ► Personal productivity systems – use technology to self-manage clerical tasks such as calendars, address books, etc. ► Virtual office – performing office activities independent of a particular physical location.

18 Decision Support Systems ► Decision Support System (DSS) – assists management in solving a problem. ► Groupware – group-oriented software. ► Group decision support system (GDSS) combines groupware and the DSS. ► Artificial intelligence (AI) – the science of providing computers with human intellegence.

19 Figure 1.9 A DSS Model

20 Enterprise Resource Planning Systems ► Enterprise Resource Planning System (ERP) is a computer-based system that enables the management of all of the firm’s resources on an organization-wide basis.  Y2K complaint  SAP – ERP Provider

21 Information System Users ► First users were clerical users on TPSs. ► MISs added problem-solvers as users. ► Managerial Levels  Strategic planning level  Management control level  Operational control level

22 Figure 1.10 Management Levels

23 Figure 1.11 Managers in Business Areas

24 Figure 1.12 Management Functions

25 Table 1.2 Mintzberg’s Managerial Roles

26 Problem Solving & Decision Making ► Problem – a condition or event that is harmful or potentially harmful to a firm or that is beneficial or potentially beneficial. ► Solution – outcome of the problem-solving activity. ► Decision – a particular selected course of action.

27 Four Problem-Solving Phases ► Intelligence activity. Search the environment for conditions calling for a solution. ► Design activity. Invent, develop, and analyze possible courses of action. ► Choice activity. Select a particular course of action from those available. ► Review activity. Assess past choices.

28 Figure 1.13 Information Supports Each Problem-solving Phase

29 The Future of Information Technology ► Reduced cost & increased power of both computers and communications. ► Computers & communications are converging, i.e. cell phones with browsers. ► Future computing will be low cost, small in size, mobile, and connected.