Information Systems in Organizations Section A Organizational Structure CHAPTER 12 Information Systems in Organizations Page 534

Organizational Structure 12 Section A Organizational Structure Chapter 12 Section PREVIEW Section D Section A You will be able to: Describe the activities that take place in a typical business Provide examples of the computer’s role in TQM, employee empowerment, rightsizing, BPR, and e-commerce Page 534

Organizational Structure 12 Section A Organizational Structure Chapter 12 Section A An information system collects, maintains, and provides information to people. An organization is a group of people working together to accomplish a goal. Many organizations use computers to operate more effectively, gather information, and accomplish tasks. Page 536

12 Types of Organizations What’s the difference between an organization and a business? Chapter 12 Section A An organization is a group of people working together toward a goal. A business is an organization that seeks profit by providing goods and services. The written expression of an organization’s mission is called a mission statement. describes goals way goals will be accomplished Page 536

12 Types of Organizations What’s the difference between an organization and a business? Chapter 12 Section A Mission statements are published in corporate reports and on the Web. Course Technology’s mission statement Page 536

12 Organizational Activities Are there activities that most organizations have in common? Chapter 12 Section A Most organizational activities can be classified into four functional groups as shown below. Financial Management Operations Human Resources Management Sales and Marketing Page 537

12 Organizational Activities Are there activities that most organizations have in common? Chapter 12 Section A The primary activities of an organization are called production or operations. Tracking the flow of money through an organization is referred to as accounting or financial management. Advertising and promoting an organization are the jobs of sales and marketing or public relations. Keeping track of employees is referred to human resources management. Page 537

Trends and Challenges Could an organization function without computers? Chapter 12 Section A Computers are an important aspect of organizational activities. Organizations exist in a competitive environment where opportunities and threats abound. In response to threats, an organization can: become better at what it does change the structure of an industry create a new product or service Page 538

Trends and Challenges Could an organization function without computers? Chapter 12 Section A Automation is the use of electrical or mechanical devices to improve manufacturing or other processes. Computerization - implementing a computer system in an organization TQM (total quality management) is a strategy in which an organization makes a commitment to analyzing and improving the quality of its products and services. Page 538

Trends and Challenges Could an organization function without computers? Chapter 12 Section A Employee empowerment means giving employees the authority to make business decisions. Rightsize means to find the most effective configuration for human and computer resources. Business process redesign requires radical changes to existing business practices to achieve improvements in performance. Just-in-time inventory management - a way to reduce inventory costs Page 539

Information Systems in Organizations Section B People, Decisions and Information CHAPTER 12 Information Systems in Organizations Page 540

Section B 12 People, Decisions and Information Section PREVIEW Chapter 12 Section PREVIEW Section D Section B You will be able to: Describe the information needs of executives, managers, and workers Page 540

Section B 12 People, Decisions and Information Chapter 12 Section B Section B Every organization requires people. Workers are the people who carry out the organization’s mission. Managers determine organizational goals and plan what steps to take to achieve those goals. both need to make decisions Page 540

12 Workers Do workers use information systems? Chapter 12 Section B Section B A high percentage of workers use information systems and other computer or communications technologies. Information workers - produce and manipulate information Service workers - deliver services to customers Goods workers - create and manipulate physical objects Page 541

12 Workers Do workers use information systems? Worker classification Chapter 12 Section B Section B Worker classification in the organizational pyramid Page 541

12 Managers What managerial tasks are enhanced by information systems? Chapter 12 Section B Section B Executive managers - set long range goals for organization called strategic planning Middle managers - design ways to achieve plans laid out by executive managers, known as tactical planning Supervisors - deal primarily with day-to-day operations, known as operational planning Page 543

12 Problems and Decisions How do workers and managers use information systems? Chapter 12 Section B Section B To solve a problem, a worker must: recognize the problem devise possible solutions select an action or solution Problems structured (every day, routine) semi-structured (less routine, uncertain) unstructured (require human intuition) Page 544

12 Problems and Decisions How do workers and managers use information systems? Chapter 12 Section B Section B Computer information systems help people solve structured, semi-structured, and unstructured problems. Page 544

12 Information Analysis Tools Where do computers get information that they supply to workers and managers? Chapter 12 Section B Section B Organizations generate internal information : inventory cash flow personnel stored in an information system External information is collected from outside sources. not permanently stored in information system Page 545

12 Information Analysis Tools Where do computers get information that they supply to workers and managers? Chapter 12 Section B Section B It is easy to collect external information using Internet resources and other communications capabilities. Zacks Web site provides information about businesses Page 545

12 Information Analysis Tools Where do computers get information that they supply to workers and managers? Chapter 12 Section B Section B Most information systems produce a fixed set of reports (daily cash receipts). Information analysis tools help people model problems then find a solution or decision. Page 546

12 Information Analysis Tools Where do computers get information that they supply to workers and managers? Chapter 12 Section B Section B Criterium DecisionPlus software Page 546

Information Systems in Organizations Section C Information Systems CHAPTER 12 Information Systems in Organizations Page 547

Section C Information Systems 12 Section PREVIEW You will be able to: Chapter 12 Section PREVIEW Section D Section C You will be able to: Provide examples of office automation that make significant improvements in ways that organizations operate Describe the transaction processing systems that are typically used in businesses Differentiate between an MIS and a DSS Explain how an expert system works Page 547

Section C Information Systems 12 Chapter 12 Section C An information system must have one or more of the following components: office automation system transaction processing system management information system Page 547

Office Automation Can an information system automate routine office tasks? Chapter 12 Section C An office automation system “automates” or computerizes, routine office tasks. word processing software spreadsheet software scheduling software e-mail software Page 547

12 Transaction Processing How does an organization collect information on production or operations? Chapter 12 Section C In an information system context, a transaction is an event that requires a manual or computer-based activity. A transaction processing system (TPS) keeps track of the transactions for an organization by providing a way to collect, store, display, modify, or cancel transactions. Page 547

12 Transaction Processing How does an organization collect information on production or operations? Chapter 12 Section C Examples of transaction processing systems: point of sale system records items purchased at each cash register order-entry/invoice system provides a way to input, view, modify, and delete orders general accounting system records financial status of business e-commerce system - collects online orders and processes credit card payments Page 547

12 Transaction Processing How does an organization collect information on production or operations? Chapter 12 Section C Data that is used by a transaction processing system is stored in files or databases Transaction processing system Page 548

12 Management Information Systems Can data collected by transaction be presented in a format conducive to decision making? Chapter 12 Section C Managers need sophisticated reports to help them understand and analyze data. created by a management information system Management information system can be a synonym for the term “information system” or refer to a type of information system. characterized by production of routine reports that managers use for structured and routine tasks Page 550

12 Management Information Systems Can data collected by transaction be presented in a format conducive to decision making? Chapter 12 Section C One of the major goals of an MIS is to increase the efficiency of managerial activity. A managerial information system produces several types of reports. Detail report - organized list Summary report - combines or groups data Exception report - show information outside normal or acceptable ranges Page 551

12 Decision Support Systems Can managers get information about unanticipated problems? Chapter 12 Section C A decision report system (DSS) allows users to: manipulate data directly incorporate data from external sources create data models and “what if” scenarios designed to make non-routine decisions Page 552

12 Decision Support Systems Can managers get information about unanticipated problems? Chapter 12 Section C A decision model is a numerical representation of a realistic situation. A decision query is a question or set of instructions describing the data that needs to be gathered to make a decision. A decision support system “supports” the decision maker but does not make the decision. Page 552

12 Expert Systems and Neural Networks Do information systems ever make decisions? Chapter 12 Section C Information systems do not make decisions. The manager analyzes the data and reaches a decision. An expert system, sometimes referred to as a “knowledge-based system”, is a computer system designed to analyze data and produce a recommendation or decision. uses a set of facts or rules Page 553

12 Expert Systems and Neural Networks Do information systems ever make decisions? Chapter 12 Section C Expert system Page 553

12 Expert Systems and Neural Networks Do information systems ever make decisions? Chapter 12 Section C Knowledge base - set of facts and rules, stored in a computer file manipulated by inference engine software An expert system is not a general-purpose problem solver or decision maker. An expert system shell is a software tool that helps in developing expert system applications. contains an inference engine expert system without rules Page 554

12 Expert Systems and Neural Networks Do information systems ever make decisions? Chapter 12 Section C Expert systems are designed to deal with imprecise data or problems that have more than one solution. Using a technique called fuzzy logic, an expert system can deal with imprecise data by asking for a level of confidence. A neural network uses computer circuitry to simulate the way in which a brain might process information. Page 555

Information Systems in Organizations User Focus Expert System Facts and Rules CHAPTER 12 Information Systems in Organizations Page 556

User Focus 12 Expert System Facts and Rules Chapter 12 User Focus An expert system has the ability to make inferences based on the rules and data in a knowledge base. An expert system can “think for itself” to draw conclusions from a set of facts. Page 556

12 Facts How do I write the facts for a knowledge base? Chapter 12 User Focus A fact is a basic building block of a knowledge base. Once facts are in a knowledge base, you can search through facts to produce an answer. The way you write facts for a knowledge base depends on the development tool you use. Predicate logic is a shorthand notation system used to construct your expert system. Page 557

12 Rules Can I use predicate logic for rules? Chapter 12 User Focus The way that you enter facts depends on the development tool you use. most do not allow free-form English too ambiguous A development tool requires you to use IF...THEN format or predicate logic to write rule. When creating an expert system, the goal is to hide all of the details of a decision from the user. Page 558