1. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-1

2. Chapter © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin CHAPTER 1 THE INFORMATION AGE IN WHICH YOU LIVE Changing the Face of Business 1

3. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-3 OPENING CASE STUDY Pay-Per-Tune Generation and Disruptive Technologies Rock the Record Industry Since 1999, revenues in the recording industry have been on the decline Napster and other illegal uses of technologies are partially to blame But the technology isn’t bad The way people use it can be

4. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-4 OPENING CASE STUDY Disruptive technologies (MP3 players and the like in this case) can dramatically change the landscape of business Your organization must constantly transform itself to compete and survive

5. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-5 STUDENT LEARNING OUTCOMES 1. Define MIS and IT and describe their relationship 2. Validate information personally and organizationally as a key resource 3. Explain why people are the most important organizational resource

6. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-6 STUDENT LEARNING OUTCOMES 4. Describe IT as a key organizational resource 5. Define competitive advantage and the role of IT to achieve a competitive advantage 6. Discuss how IT can and will impact your life

7. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-7 INTRODUCTION Information age – a time when knowledge is power Knowledge worker – works with and produces information as a product Outnumber all other types of workers at least four-to-one

8. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-8 INTRODUCTION MIS – planning for, developing, managing, and using IT tools to help people perform all tasks related to information processing and management IT – any computer-based tool that people use to work with information and support the information and information processing needs of an organization Use of technology is exploding

9. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-9 INTRODUCTION

10. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-10 INTRODUCTION Telecommuting – the use of technologies to work in a place other than a central location

11. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-11 INFORMATION AS A KEY RESOURCE Data – raw facts Information – data that have a particular meaning within a specific context

12. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-12 INFORMATION AS A KEY RESOURCE Business intelligence – knowledge about your customers, competitors, business partners, competitive environment, and own international operations that gives you the ability to make effective, important, and often strategic business decisions. Business intelligence is a combination of many different types of information

13. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-13 Personal Dimensions of Information

14. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-14 Personal Dimensions of Information Time When you need information Describing the right time period Location – no matter where you are Intranet – internal organizational Internet Form Usable, understandable, accurate

15. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-15 Organizational Dimensions of Information

16. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-16 Organizational Dimensions of Information Information flows Upward – current state of the organization based on its transactions Downward – strategies, goals, directives Horizontal – between functional units and work teams Outward/Inward – to/from customers, suppliers, distributors, and other partners

17. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-17 Organizational Dimensions of Information Information granularity – extent of detail within the information Lower organizational levels – tremendous detail (fine) Higher organizational levels – summarized information (coarse)

18. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-18 Organizational Dimensions of Information Internal – specific operational aspects of an organization External – environment surrounding the organization Objective – something that is known Subjective – something that is unknown

19. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-19 PEOPLE AS A KEY RESOURCE You And technology Technology-literate knowledge worker – a person who knows how and when to apply technology The chapters help you determine when to apply technology The modules help you in applying technology

20. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-20 PEOPLE AS A KEY RESOURCE Information-literate knowledge workers… Can define what information they need Know how and where to obtain information Understand the information Can act appropriately

21. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-21 Your Ethical Responsibilities Ethics and laws are different Laws require or prohibit action on your part Ethics are more of a matter of personal interpretation Ethics – the principles and standards that guide our behavior toward other people Sometimes ethics and laws collide

22. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-22 Your Ethical Responsibilities Try to always be here

23. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-23 IT AS A KEY RESOURCE Information technology (IT) – any computer-based tool that people use to work with information and support the information and information-processing needs of an organization Two categories of technology Hardware Software

24. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-24 Key Technology Categories

25. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-25 Key Technology Categories Hardware – the physical devices that make up a computer Software – the set of instructions that your hardware executes to carry out a specific task for you

26. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-26 Technology Hardware Input device – enter information and commands Output device – receive the results Storage device – stores information CPU – hardware that interprets and executes the software RAM – temporary holding area for information and software

27. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-27 Technology Hardware (cont’d) Telecommunications device – sends information to and receives it from another person or computer in a network Connecting hardware – hardware that connects other hardware (e.g., ports, cables, etc.)

28. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-28 Technology Software Application software – enables you to solve specific problems or perform specific tasks System software – handles tasks specific to technology management and coordinates the interaction of all technology devices

29. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-29 Technology Software Two types of system software Operating system software – controls your application software and manages how your hardware devices work together Utility software – provides additional functionality to your operating system software (e.g., anti-virus software)

30. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-30 Decentralized Computing, Share Information, & Mobile Computing

31. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-31 Decentralized Computing Decentralized computing – an environment in which an organization distributes computing power and locates it in functional business areas as well as on the desktops of knowledge workers Servers Personal computers PDAs Tablet PCs

32. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-32 Shared Information Shared information – an environment in which an organization’s information is organized in one or more central locations, allowing anyone to access and use it as he or she needs to Necessary because businesses are greatly internally integrated today

33. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-33 Mobile Computing Mobile computing – broad general term describing your ability to use technology to wirelessly connect to and use centrally located information and/or application software M-commerce – electronic commerce conducted over a wireless device such as a cell phone, PDA, or notebook computer

34. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-34 IT IN SUPPORT OF BUSINESS Competitive advantage – providing a product or service in a way that customers value more than what the competition is able to do Use technology for Operational excellence Major business initiatives Decision making Organizational transformation

35. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-35 Operational Excellence Being efficient in what you do Transaction processing system (TPS) – processes transactions within an organization Customer self-service system – extension of a TPS that places technology in the hands of an organization’s customers and allows them to process their own transactions

36. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-36 Operational Excellence TPSs and customer-self service systems require the use of databases and database management system (DBMS) software Databases contain tremendous detail on every transaction DBMS is the software bridge between a database and the actual software application

37. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-37 Operational Excellence

38. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-38 Major Business Initiatives Customer relationship management (CRM) Enterprise resource planning (ERP) Sales force automation (SFA) Supply chain management (SCM) All are important major business initiatives The entire focus of Chapter 2

39. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-39 Major Business Initiatives Supply chain management (SCM) – tracks inventory and information among business processes and across companies Supply chain management (SCM) system – an IT system that supports supply chain management activities by automating the tracking of inventory and information among business processes and across companies

40. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-40 Supply Chain Management

41. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-41 Supply Chain Management Uses EDI to facilitate the movement of information Electronic data interchange (EDI) – the direct computer-to-computer transfer of transaction information contained in standard business documents, such as invoices and purchase orders, in a standard format

42. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-42 Major Business Initiatives Another focuses on managing knowledge Knowledge management (KM) system – an IT system that supports the capturing, organization, and dissemination of knowledge (i.e., know-how) throughout an organization Helps you avoid “reinventing the wheel”

43. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-43 Decision Making Online transaction processing (OLTP) – the gathering of input information, processing that information, and updating existing information to reflect the gathered and processed information Other IT systems support OLAP Online analytical processing (OLAP) – the manipulation of information to support decision making

44. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-44 Decision Making Two types of technology support Support for analyzing a situation Executive information system (EIS) – highly interactive IT system that allows you to first view highly summarized information and then choose how you would like to see greater detail

45. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-45 Executive Information System (EIS)

46. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-46 Decision Making Collaboration systems help groups of people analyze a situation Collaboration system – a system that is designed specifically to improve the performance of teams by supporting the sharing and flow of information

47. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-47 Decision Making Other technology systems can actually make a recommendation to you Artificial intelligence – the science of making machines imitate human thinking and behavior Neural network – type of AI that recognizes and differentiates patterns AI is a focus of Chapter 4

48. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-48 Organizational Transformation Organizations must continually transform to… Stay ahead of the competition Offer a competitive advantage Survive

49. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-49 Organizational Transformation Many organizations turn to ASPs to help with their transformational technologies Application service provider (ASP) – supplies software applications (and often related services such as maintenance, technical support, and the like) over the Internet that would otherwise reside on its customers’ in- house computers

50. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-50 IT IN YOUR LIFE Your career Learn IT tools no matter your career choice Vertical market software – specific to a given industry Horizontal market software – general to many industries (e.g., accounting and payroll) You will have to manage technology

51. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-51 Ethics, Security, & Privacy Ethics must be a priority for you So must security and privacy

52. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-52 Ethics, Security, & Privacy Some software is “bad” Spyware (sneakware, stealthware) – software that comes hidden in free downloadable software and tracks your online movements, mines the information stored on your computer, or uses your computer’s CPU and storage for tasks you know nothing about

53. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-53 Ethics, Security, & Privacy Some people use technology in a bad way Identity theft – forging of someone’s identity for the purpose of fraud Identity theft may be as high as $5 trillion worldwide by 2005

54. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-54 CAN YOU… 1. Define MIS and IT and describe their relationship 2. Validate information personally and organizationally as a key resource 3. Explain why people are the most important organizational resource

55. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin 1-55 CAN YOU… 4. Describe IT as a key organizational resource 5. Define competitive advantage and the role of IT to achieve a competitive advantage 6. Discuss how IT can and will impact your life

56. Chapter © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/ Irwin CHAPTER 1 End of Chapter 1 1