Business Information System

Management Information Systems, Sixth Edition

Chapter 1 Business Information Systems: An Overview

Objectives
• Explain why information technology matters • Define digital information and explain why digital systems are so powerful and useful • Explain why information systems are essential to business • Describe how computers process data into useful information for problem solving and decision making • Identify the functions of different types of information systems in business Management Information Systems, Sixth Edition 2

Objectives (continued)
• Describe careers in information technology • Identify major ethical and societal concerns created by widespread use of information technology

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Does Information Technology Matter?
• Hackett Group study: “Does IT Matter? Hackett Concludes the Answer is Yes” – World’s best performing companies spent 7% more per employee on IT than typical companies – They recouped the investment fivefold in lower operational costs

• Today’s business professionals must know how to develop and use IT

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The Power of Digital Systems
• Binary counting system uses only two digits: 0 and 1 • Digital systems: – Computers and devices that use the binary system – Can represent any information as a combination of zeros and ones

• Information can be represented, stored, communicated, and processed digitally Management Information Systems, Sixth Edition 5

The Power of Digital Systems (continued)
• Digital information is stored and communicated by means of electromagnetic signals – Extremely fast – Digital copy is an exact copy of the original

• Accuracy and speed make digital systems powerful, useful, and important

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The Purpose of Information Systems
• Businesses use information systems
– To make sound decisions – To solve problems

• Problem: any undesirable situation • Decision: arises when more than one solution to problem exists • Both problem solving and decision making require information

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The Purpose of Information Systems (continued)
• Keys to success in business:
– Gathering correct information efficiently – Storing information – Using information

• Purpose of information systems is to support these activities

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Data, Information, and Information Systems
• “Data,” “information,” and “system” are commonly used terms • Important to understand their similarities and differences

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Data vs. Information
• Data: a given or fact
– Can be number, statement, or picture – Is the raw material in the production of information

• Information: facts or conclusions that have meaning within context – Composed of data that has been manipulated

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Data Manipulation
• Data is manipulated to make useful information
– New information can be generated from data, such as averages, trends, etc.

• Survey is common method of collecting data • Raw data is hard to read • Information is more useful to business than data

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Generating Information
• Process: the manipulation of data
– Usually produces information – May produce more data

• A piece of information (output of a process) in one context may be considered data (input to a process) in another context

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Generating Information (continued)

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Information in Context
• Not all information is useful • To be useful, information must be: – Relevant – Complete – Accurate

• In business, information must also be:
– Current – Obtained in a cost-effective manner

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