© 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 1 Management Information Systems, 10/e Raymond McLeod Jr. and George P. Schell

© 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 2 Part I: Essential Concepts Chapter 1 Introduction to Information Systems

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 5 History of Information Systems ► Evolution in Computer Hardware  Mainframe  Multitasking ► Smaller Computers  Minicomputers  Microcomputers  Personal computers (PC)

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 6 Introduction to Computer Architecture ► Hardware-processor, keyboard, monitor, mouse, printer, etc. ► Software-application, operating, etc. ► Used to support managerial decision making.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 7 Introduction to 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

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 8 Figure 1.5 Communications Architecture

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 9 The 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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 10 Figure 1.6 The Physical System of the Firm

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 11 The Evolution of 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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 13 Figure 1.7 A Model of a Transaction Processing System

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 15 Figure 1.8 A MIS Model

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 16 Management Information Systems (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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 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 intelligence.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 19 Figure 1.9 A DSS Model

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 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

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 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

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 22 Figure 1.10 Management Levels Can Influence Both the Source and Presentation Form of Information

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 23 Figure 1.11 Managers Can Be Found on All Business Areas of the Firm

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 24 Figure 1.12 Management Level May Influence the Relative Emphasis on the Management Function

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 25 Table 1.2 Mintzberg’s Managerial Roles

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 26 Problem Solving and Decision Making ► Problem– 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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 27 Problem-Solving Phases ► The four phases are: ► 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.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 28 Figure 1.13 Information Supports Each Problem-Solving Phase

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 29 The Future of Information Technology ► Reduced cost and increased power of both computers and communications. ► Computers and communications are converging, i.e., cell phones with browsers. ► Future computing will be low cost, small in size, mobile, and connected.

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 30 Extra: Moore’s Law ► Coined in 1960s ► Originally stated that the storage density of integrated circuits on a silicon chip doubled about every year ► By the 1970s, the rate doubling had increased to 18 months, a pace that continues today ► What this means to users is that power of a computer doubles about every 18 months for a given cost

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 31 Extra: Moore’s Law ► E.g. Salary comparison YEARFRIENDYOU 1$40,000$5,000 3$57,600$20,000 6$99,533$80,000 9$171,993$320,000 12$297,203$1,280,000 15$513,567$5,120,000

© 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 32 Topics for discussion ► Why would a manager want to solve a ‘good’ problem? ► How does a manager engage in Simon’s intelligence activity?