1. © 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

2. © 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

3. © 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.

4. © 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.

5. 5 Introduction ► The first computers were as large as a room and used light -bulb -sized vacuum tubes for much of their circuitry ► Vacuum tubes were later replaced with transistors and chips made using silicon wafer technology ► This change resulted in a dramatic and long- term lowering of costs of manufacturing leading to the high growth in the demand for computers

6. 6 Half the Size But Twice the Speed ► Miniaturization has been a key factor in lowering costs and increasing computer performance ► Redesigning a circuit is to be half the scale of a previous one and also double its speed ► Thus, continually shrinking the computer chip size has been important in increasing computer processor speeds

7. 7 HISTORY OF INFORMATION SYSTEMS ► The earliest “mainframe” computers could only process a single task by a single user  1946: ENIAC (Electronic Numerical Integrator and Calculator) was developed  1951: first computer installed by the U.S. Census Bureau  1954: first computer used by G.E. ► Over the last half century, hardware has seen many-fold increases in speed and capacity and dramatic size reductions ► Applications have also evolved from relatively simple accounting programs to systems designed to solve a wide variety of problems

8. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 8 History of Information Systems ► Evolution in Computer Hardware  Mainframe  Multitasking ► Smaller Computers  Minicomputers  Microcomputers  Personal computers (PC)

9. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 9 Introduction to Computer Architecture ► Hardware-processor, keyboard, monitor, mouse, printer, etc. ► Software-application, operating, etc. ► Used to support managerial decision making.

10. 10 INTRODUCTION TO COMPUTER ARCHITECTURE ► Most computers have similar architectures that combine software and hardware ► Software includes the operating system which controls the computer hardware and application software, such as word processing, spreadsheets, etc. ► Hardware includes, processors, memory and peripheral devices

11. 11 Computer Hardware ► The processor manages the input and output devices, data storage devices, and operations on the data ► The central processing unit (CPU) controls all the other components ► Two types of memory are:  Random access memory (RAM) acts as the temporary workspace for the CPU  Permanent data storage devices such as CD-ROM, floppy and hard disk drives

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13. 13 INTRODUCTION TO COMMUNICATIONS ARCHITECTURE ► Modem: a hardware device that sends the computer’s digital signals by modulating an analog carrier wave ► Data rates for various communications systems:  Telephone lines: 56 kbps  Cable modem: up to 2 Mbps  WiFi: 11 Mbps  Local Area Networks: 10 to 100 Mbps ► Wireless has recently taken off because it’s cheap and easy to install

14. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 14 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

15. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 15 Figure 1.5 Communications Architecture

16. 16 Moore's Law ► Coined in the 1960s by Gordon Moore, one of the founders of Intel ► States that the storage density (and therefore the processing power) of integrated circuits is doubling about every year ► By the 1970s the doubling rate had slowed to 18 months, a pace that has continued up to the present

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18. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 18 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.

19. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 19 Figure 1.6 The Physical System of the Firm

20. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 20 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.

21. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 21 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.

22. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 22 Figure 1.7 A Model of a Transaction Processing System

23. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 23 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.

24. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 24 Figure 1.8 A MIS Model

25. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 25 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.

26. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 26 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.

27. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 27 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.

28. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 28 Figure 1.9 A DSS Model

29. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 29 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

30. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 30 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

31. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 31 Figure 1.10 Management Levels Can Influence Both the Source and Presentation Form of Information

32. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 32 Figure 1.11 Managers Can Be Found on All Business Areas of the Firm

33. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 33 Figure 1.12 Management Level May Influence the Relative Emphasis on the Management Function

34. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 34 Table 1.2 Mintzberg’s Managerial Roles

35. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 35 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.

36. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 36 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.

37. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 37 Figure 1.13 Information Supports Each Problem-Solving Phase

38. © 2007 by Prentice HallManagement Information Systems, 10/e Raymond McLeod and George Schell 38 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.