1. Using Advanced Information Technology to Increase Performance
chapter eighteen
McGraw-Hill/Irwin
Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Learning Objectives
Differentiate between data and information, and explain how the attributes of useful information allow managers to make better decisions.
Describe three reasons why managers must have access to information to perform their tasks and roles effectively.
Describe the computer hardware and software innovations that created the IT revolution and changed the way managers behave.
Differentiate among seven performance-enhancing kinds of management information systems.
Explain how IT is helping managers build strategic alliances and network structures to increase efficiency and effectiveness.

3. Factors Affecting the Usefulness of Information
Figure 18.1

4. What is Information Technology?
set of methods or techniques for acquiring, organizing, storing, manipulating, and transmitting information

5. What 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
Most of management is about making decisions
To make effective decisions, managers need information, both from inside and outside the organization 5

6. A Product Life Cycle Figure 18.2
Advances in IT are one of the most important determinants of the length of a product’s life cycle
The shorter the length of a product’s life cycle because of advancing IT the more important it is to innovate products quickly and continuously
Embryonic stage
Product has yet to gain widespread acceptance
Customers are unsure what a product has to offer
Growth stage
Many consumers are buying the product for the first time
Demand increases rapidly
Mature stage
Market peaks because most customers have already bought the product
Demand is typically replacement demand
Decline stage
Advancing IT leads to the development of a more advanced product making the old one obsolete 6

7. The Network of Computing Power
The strategy behind cloud computing was to create
a cost-effective Internet-based global platform of hardware and software provided by
a network of thousands of interlinked IT companies that had
the capability to provide a full range of on-demand software applications

8. A Four-Tier Information System with Cloud Computing
Figure 18.3 8

9. Types of Management Information Systems
Operating system software
software that tells computer hardware how to run
Applications software
software designed for a specific task or use

10. Six Computer-Based Management Information Systems
Figure 18.4
Transaction Processing Systems
Systems designed to handle large volumes of routine transactions.
Were the first computer-based information systems handling billing, payroll, and supplier payments.
Operations Information Systems
Systems 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.
Decision Support Systems
Provides computer-built models that help managers make better non-programmed decisions.
New productive capacity, new product development, launch a new promotional campaign, enter a new market or expand internationally
Executive Support System
Sophisticated version of a decision support system designed to meet the needs of top managers
Group Decision Support System
An executive support system that links top managers so that they can function as a team. 10

11. Types of Information Systems
E-Commerce Systems
Trade that takes place between companies, and between companies and individual customers, using IT and the Internet

12. Types of E-Commerce
Figure 18.5

13. E-Commerce Systems Business-to-customer (B2C)
trade that takes place between a company and individual customers using IT and the Internet

14. Flatter Structures and Horizontal Information Flows
Boundaryless Organization
An organization whose members are linked by computers, faxes, computer-aided design systems, and video teleconferencing and who rarely, if ever, see one another face-to-face.

15. Flatter Structures and Horizontal Information Flows
Virtual organization
A company in which employees are linked to an organization’s centralized databases by computers, faxes, and videoconferencing and rarely meet face-to-face.