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McGraw-Hill/Irwin
©2005 The McGraw-Hill
Companies,
All rights reserved
CHAPTER 1
THE INFORMATION AGE
IN WHICH YOU LIVE
Changing the Face of
Business
McGraw-Hill/Irwin
©2005 The McGraw-Hill Companies, All rights reserved
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
1-3
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
1-4
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
1-5
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
1-6
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
1-7
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
1-8
INTRODUCTION
1-9
INTRODUCTION
• Telecommuting – the use of technologies to
work in a place other than a central location
1-10
INFORMATION AS A KEY RESOURCE
• Data – raw facts
• Information – data that have a particular
meaning within a specific context
1-11
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
1-12
Personal Dimensions of Information
1-13
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
1-14
Organizational Dimensions of
Information
1-15
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
1-16
Organizational Dimensions of
Information
• Information granularity – extent of detail
within the information
– Lower organizational levels – tremendous detail
(fine)
– Higher organizational levels – summarized
information (coarse)
1-17
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
1-18
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
1-19
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
1-20
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
1-21
Your Ethical Responsibilities
Try to always be
here
1-22
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
1-23
Key Technology Categories
1-24
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
• Module A covers technology categories in
detail
1-25
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
1-26
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.)
1-27
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
1-28
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)
1-29
Decentralized Computing, Share
Information, & Mobile Computing
1-30
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
1-31
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
1-32
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
1-33
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
1-34
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
1-35
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
1-36
Operational Excellence
1-37
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
1-38
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
1-39
Supply Chain Management
1-40
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
1-41
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”
1-42
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
1-43
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
1-44
Executive Information System (EIS)
1-45
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
1-46
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
1-47
Organizational Transformation
• Organizations must continually transform to…
– Stay ahead of the competition
– Offer a competitive advantage
– Survive
1-48
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
1-49
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
1-50
Ethics, Security, & Privacy
• Ethics must be a priority for you
• So must security and privacy
1-51
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
1-52
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
1-53
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
1-54
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
1-55
CHAPTER 1
End of Chapter 1
McGraw-Hill/Irwin
©2005 The McGraw-Hill Companies, All rights reserved