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Chapter 18 Information Technology and Control Pamela S. Lewis Stephen H. Goodman Patricia M. Fandt Slides Prepared by Bruce R. Barringer University of Central Florida ©2001 South-Western College Publishing Learning Objectives Slide 1 of 3 1.Explain the differences between data and information. 2.Describe how cost-benefit analysis can be applied to the process of collecting and manipulating data. 3.Discuss the characteristics of useful information. 4.Describe the various components in an information system. © 2001 South-Western Publishing Transparency 18-2 Learning Objectives Slide 2 of 3 5.Illustrate the steps in the development of an information system. 6.Explain the various roles of information technology in organizations. 7.Describe a variety of types of technology that are changing the way we work. © 2001 South-Western Publishing Transparency 18-3 Learning Objectives Slide 3 of 3 8.Discuss the impact of information technology on the organization. 9.Explain the limitations of information technology. © 2001 South-Western Publishing Transparency 18-4 Purpose of Information Technology To monitor, process, and disseminate information to assist in managing, decision making, and controlling the organization. © 2001 South-Western Publishing Transparency 18-5 Information Versus Data Data Raw facts or details that represent some type of transaction or activity within an organization. © 2001 South-Western Publishing Information The result of the process of transforming data into meaningful facts useful for a specific purpose. Transparency 18-6 Evaluating Information Slide 1 of 3 • Cost-Benefit Analysis – The process of examining both the costs and the potential benefits of some endeavor to determine whether it will pay off. – The opportunity presented by the collection, analysis, and use of data within an organization has both a positive side (benefits) and a negative side (costs). © 2001 South-Western Publishing Transparency 18-7 Evaluating Information Slide 2 of 3 • Cost-Benefit Analysis (cont.) – Tangible costs • Costs that can be accurately predicted and quantified, due to the relative certainty associated with their occurrence. • Example: costs of hardware and software associated with data collection. – Intangible costs • Costs that are difficult to quantify, either because of the difficulty in precisely anticipating outcomes or the impossibility of predicting ultimate consequences. • Example: Work disruption due to changes in procedures. © 2001 South-Western Publishing Transparency 18-8 Evaluating Information Slide 3 of 3 • Cost-Benefit Analysis (cont.) – Tangible benefits • Include increases in sales, reduction in inventory costs, and identifiable improvements in worker productivity. – Intangible benefits • Include improvements in information availability, better employee morale, and improved customer service. © 2001 South-Western Publishing Transparency 18-9 Characteristics of Useful Information Slide 1 of 3 • Quality – High-quality information is accurate, clear, orderly, and available in a form that assists the decision maker. • Timeliness – Timely information has several ingredients: time sensitivity, currency, and frequency. © 2001 South-Western Publishing Transparency 18-10 Characteristics of Useful Information Slide 2 of 3 • Completeness – Information is complete when it is sufficient to allow the decision maker to make an accurate assessment of the situation and to arrive at a suitable decision. – Conciseness and detail are two additional aspects of completeness. © 2001 South-Western Publishing Transparency 18-11 Characteristics of Useful Information Slide 3 of 3 Data Data processing transformation © 2001 South-Western Publishing Information - Quality - Timeliness - Completeness Transparency 18-12 Information Systems for Management • Information systems provide managers a systematic approach to collecting, manipulating, maintaining, and distributing information throughout an organization. • Information systems have a long history. Early Teletype Machine © 2001 South-Western Publishing Transparency 18-13 Information System Components Computer-based information system Components of general information system Additional components Inputs Processing Outputs Feedback Control Hardware © 2001 South-Western Publishing Software Database Transparency 18-14 Steps in the Development of HighQuality MIS Slide 1 of 3 • Investigation – Organization determines whether a problem or opportunity exists that can be addressed by an information system. • Systems Analysis – Develop the functional requirements for the information system. © 2001 South-Western Publishing Transparency 18-15 Steps in the Development of HighQuality MIS Slide 2 of 3 • Systems Design – System's technological capabilities are addressed. • Systems Implementation – The hardware and software are developed or acquired, and the new information system is put together. © 2001 South-Western Publishing Transparency 18-16 Steps in the Development of HighQuality MIS Slide 3 of 3 • Systems Maintenance – Like any piece of equipment, an information system will need to be maintained to remain effective. – Systems development life cycle (SDLC) • Recognition that investigating, analyzing, designing, implementing, and maintaining an information system is an ongoing process. © 2001 South-Western Publishing Transparency 18-17 Systems Development Life Cycle Systems investigation Systems analysis Systems design Information system life and evolution Systems implementation Systems maintenance © 2001 South-Western Publishing Transparency 18-18 Pitfalls in System Design Slide 1 of 3 • Feasibility – Organizational feasibility • Refers to how well the proposed system supports the strategic objectives of the organization. – Economic feasibility • Focuses on whether the expected benefits of an information system will be able to cover the anticipated costs. © 2001 South-Western Publishing Transparency 18-19 Pitfalls in System Design Slide 2 of 3 • Feasibility – Technical feasibility • Refers to the capability of the hardware and software of the proposed information system to provide the decision makers in the organization with the needed information. – Operational feasibility • Refers to the willingness and ability of all concerned parties to operate and support the information system as it is proposed and implemented. © 2001 South-Western Publishing Transparency 18-20 Pitfalls in System Design Slide 3 of 3 • Ability to Meet Needs of Diverse Users – An additional concern in the system design process is whether the system will ultimately meet the users’ needs. • User Expectations – Finally, in many instances the expectations of the users and the organization are too high. © 2001 South-Western Publishing Transparency 18-21 Applications of Computer-Based Information Systems • Management Information Systems (MIS) – Focuses on the routine, structured, regular reporting and information requirements of the organization. • Decision Support Systems (DSS) – Computer-based information system that uses imbedded analytical models to assist decision makers in analyzing and solving semistructured problems. © 2001 South-Western Publishing Transparency 18-22 Decision Support System (DSS) User Interactive computer work station © 2001 South-Western Publishing DSS - Models - Software - Database Firm database Transparency 18-23 Telecommunications Slide 1 of 3 • The transmission of information in any form from one location to another using electronic or optical means. – Wide-area network (WAN) • Information system that extends over a broad geographic area, such as cities, regions, countries, or the world. © 2001 South-Western Publishing Transparency 18-24 Telecommunications Slide 2 of 3 • Transmission of information from one location to another (cont.) – Local-area network (LAN) • Information system that connects users in a small area, such as a building, an office, or a manufacturing plant. © 2001 South-Western Publishing Transparency 18-25 Telecommunications Slide 3 of 3 • Electronic Data Interchange (EDI) – Electronic transmission of transaction data using telecommunications. • Electronic Funds Transfer (EFT) – Electronic manipulation of financial transactions. © 2001 South-Western Publishing Transparency 18-26 Telecommuting • Telecommuting – The practice of working at a remote site by using a computer linked to a central office or other employment location. © 2001 South-Western Publishing Transparency 18-27 Electronic Mail and Electronic Commerce (E-Commerce) • E-mail – A computer-based system that allows individuals to exchange and store messages through computerized text-processing and communication networks. • Electronic Commerce – The process of buying and selling goods and services electronically with computerized business transactions. © 2001 South-Western Publishing Transparency 18-28 Artificial Intelligence • Artificial Intelligence (AI) – Refers to the process of developing computers systems that can behave intelligently. • Expert system - A computer-based system that contains and can use knowledge about a specific, relatively narrow, complex application. • Robotics - Use of machines with humanlike characteristics, such as dexterity, movement, vision, and strength. © 2001 South-Western Publishing Transparency 18-29 Office Automation • Systems for office automation are typically computer-based information systems that assist the organization in the processing, storage, collection, and transmission of electronic documents and messages among individuals, work groups, and organizations. © 2001 South-Western Publishing Transparency 18-30 Components of Office Automation Slide 1 of 3 • Electronic Work and Training – Telecommuting – Multimedia • Electronic Documents and Image Processing Systems – Word processing – Desktop publishing – Document management © 2001 South-Western Publishing Transparency 18-31 Components of Office Automation Slide 2 of 3 • Electronic Communications – E-mail – Voice mail – Fax • Electronic Meeting Systems – Electronic meeting management systems – Collaborative work systems – Teleconferencing © 2001 South-Western Publishing Transparency 18-32 Components of Office Automation Slide 3 of 3 • Office Management Systems – Electronic office tools – Electronic calendar © 2001 South-Western Publishing Transparency 18-33 Guidelines for Successful Managers of the Future Slide 1 of 2 • Understand the importance of quality information that is obtained in a timely fashion. • Employ information systems capable of providing quality information that is both timely and complete. • Are able to use that information to their advantage in the organizational decisionmaking process. © 2001 South-Western Publishing Transparency 18-34 Guidelines for Successful Managers of the Future Slide 2 of 2 • Are well versed in the latest technological innovations for information gathering, processing, and disseminating. • Are aware of the impact of information technology on management efficiency, organizational social relationships, and organizational structure. • Are aware of the limitations of computerbased information systems. © 2001 South-Western Publishing Transparency 18-35