MIS 300 Midterm Summary1 Sections Covered in 1 st Part of Course

MIS 300 Midterm Summary 1

Sections Covered in 1st Part of Course


Principles and Learning Objectives-1

• The value of information is directly linked to how it helps decision makers achieve the organization’s goals– Distinguish data from information and describe the

characteristics used to evaluate the quality of data

Information

Organization GOAL


Principles and Learning Objectives -2

• Knowing the potential impact of information systems and having the ability to put this knowledge to work can result in a successful personal career, organizations that reach their goals, and a society with a higher quality of life– Identify the basic types of business information

systems and discuss who uses them, how they are used, and what kinds of benefits they deliver


Chapter 1 Provides a Preview of All the Concepts Covered in the Course.

Note these especially


Introduction

• Information system (IS)– Set of interrelated components: collect, manipulate,

disseminate data and information– Provide feedback to meet an objective– Examples: ATMs, airline reservation systems, course

reservation systems

What is Information, really? Why have it?


What Herbert Simon Won the Nobel Prize For

Design Choice ExecutionIntelli-gence

SomethingHappens

MgmtDecisionRequired


What’s Behind the Model of Rational Decision Making

Reflect against what is known

Optimize or

Satisfice?

Select one alternative course of action

Implement the decision

Intelli-gence

SomethingHappens

MgmtDecisionRequired

Gather information

about pertinent events

All activity depends on

requirements and resources available


Information Concepts: Data Versus Information

• Data: raw facts– Alphanumeric, image, audio, and video

• Information– Organized collection of facts– Have value beyond the facts themselves

data or other information

components themselves

Recordings of machines’ experiences

Information is “information” only to the extent that it informs a user or consumer. That

means that the informationness of an experience depends on the observer and what

the observer has to do (intention)!


Figure 1.2: The Process of Transforming Data into Information

Data Versus Information (continued)

Selecting, organizing and manipulating, conditioned by existing models and subsequent need for action.


The Characteristics of Valuable Information

Table 1.2: Characteristics of Valuable Information


The Characteristics of Valuable Information (continued)

Table 1.2: Characteristics of Valuable Information (continued)


What Is an Information System?

Figure 1.3: The Components of an Information System

This is only one view. A system is much more complex. A behavioral view will

keep in mind intentions, skills, judgments, and prior knowledge (theory)


Computer-Based Information Systems

• Manual versus computerized information systems

• Computers are NOT necessary in information systems, but they have certain efficiencies

• Computer-based information system (CBIS)– Hardware, software, databases, telecommunications,

people, and procedures– Collect, manipulate, store, and process data into

information


Computer-Based Information Systems (continued)

Figure 1.4: The Components of a Computer-Based Information System

What you ex-

perience (above)

The infrastructur

e (left)


Electronic and Mobile Commerce

• E-commerce: any business transaction executed electronically between parties such as:– Companies (B2B)– Companies and consumers (B2C)– Consumers and other consumers (C2C)– Business and the public sector– Consumers and the public sector


Transaction Processing Systems

• Transaction: business-related exchange– Payments to employees– Sales to customers– Payments to suppliers

• Transaction processing system (TPS)– A collection of people, procedures, software,

databases, devices– Records completed business transactions


Transaction Processing Systems (continued)

Figure 1.7: A Payroll Transaction Processing System

The inputs (numbers of employee hours worked and pay rates) go through a transformation process to produce outputs (paychecks)


Enterprise Resource Planning

• Integrated programs that manage all business operations

• Coordinate planning, inventory control, production, and ordering among others

• Historically based in production systems

• Hard to translate to other types of business

• Necessarily complex


Chapters 2-5 Relate Material on These Topics

• Ch 2: Hardware (little emphasis)

• Ch 2: Software

• Ch 3: Data Management and Databases

• Ch 4: Networking

• Ch 5: E-Commerce

• Ch 5: Transaction Processing Systems

• Ch 5: Enterprise Resource Systems


Hardware Components

• Central processing unit (CPU) (The thinker)– Arithmetic/logic unit (ALU)– Control unit

• Input devices (what purpose?)

• Output devices (what purpose?)

CPUWhy are there two different kinds of input?

Why are there two different kinds of output?

Control & Data Source

Results & Feedback

Ch 2


Overview of Software

• Computer programs: sequences of instructions

• Documentation: describes program functions

• Systems software: coordinates the activities of hardware and programs: “To serve and protect”

• Application software: helps users solve particular problems: “To get the job done”

What is software really doing? Why is it important?


Systems Software: Operating Systems

• Operating system (OS): set of programs that control and manage the hardware and act as an interface with applications

• Common hardware functions– Get input (e.g., keyboard)– Retrieve data from disks and store data on disks– Display information on a monitor or printer


Operating Systems (continued)

Figure 2.8: The role of the operating system and other systems software is as an interface or buffer between application software and hardware. It also controls and manages everything.


Operating Systems (continued)

• User interface– Allows individuals to access and command the

computer system– Command-based user interface: uses text

commands– Graphical user interface (GUI): uses icons and

menus to send commands to the computer system– Smart interface: anticipates users’ needs


Application Software

• Gives users the ability to solve problems and perform specific tasks

• Interacts with systems software; systems software then directs the hardware to perform the tasks

UserInterface

Applica-tion

Software

SystemSoftware

Hardware

Other I/ODevices


Types and Functions of Application Software

• Proprietary software: unique program for a specific application, usually developed and owned by a single company

• Off-the-shelf software: purchased software

• Customized package

Proprietary: “We build it”

Off-the-Shelf:“We buy it”


Programming Languages

I need informa-tion to solve a

problem!

I, the pro-

grammer, hear you!

Compiler orlanguage processor

Programming language

statements

Conversation about need Information

System

SavedCom-

mands

InformationSystem

Some Time Later

Hooray! Now I

KNOW!


Software Issues and Trends That Will Effect YOU!

• Software bugs– Program defects that keep it from performing correctly

• Copyrights and licenses

• Global software support

• Obsolescence

• Outsourcing

• Legal issues

• Commoditization

• Security


What is DATA?

• Machine “experience”, what a machine makes of its environment

Hmmmm. That feels just like “3” or maybe a “4”

but definitely not a 5

THREE POINT FIVE

Ch 3


What is INFORMATION?

• Human experience of Data: telling us something we didn’t know or weren’t able to predict.

Was it Jones or Smith we

promised the stock to? Gotta find out. Should be Smith, but…

Hey, Schmoey, Jones is here for his stock

OK, and thanks for the

INFORMATION!


Data “World”

The Organizational Data “Shadow”

Actual Event

Error: Lost Data

Error: SpuriousData

Error: IncorrectData

Sources of Error

Data “Impression”Real World


Events as Data

• Each event generates some data• The data are about the objects that play roles in the

event• The data describe the objects and perhaps how

they relate to one another• The events, too, relate to one another in various

ways.


Data Events

• Consider a sales “event”

• It involves a number of objects: items sold, salesperson, act of selling, customer, money (objects are also called “entities”)

• Each event generates data that describe each of the objects….


Data Representation: The Hierarchy of Data

• Bit (a binary digit): a circuit that is either on or off

• Byte: 8 bits

• Character: each byte represents a character; the basic building block of information

• Field: name, number, or characters that describe an aspect of a business object or activity


The Hierarchy of Data (continued)

• Record: a collection of related data fields

• File: a collection of related records

• Database: a collection of integrated and related files

• Hierarchy of data– Bits, characters, fields, records, files, and databases


The Traditional Approach Versus the Database Approach

• Traditional approach: separate data files are created for each application, i.e., each business problem– Results in data redundancy (duplication)– Data redundancy conflicts with data integrity

• Database approach: pool of related data is shared by multiple applications– Significant advantages over traditional approach– Besides, all elements of business are related


The Database Approach

Figure 3.4: The Database Approach to Data Management


Advantages of the Database Approach

Table 3.1: Advantages of the Database Approach


Disadvantages of the Database Approach

Table 3.2: Disadvantages of the Database Approach


ER Diagrams Tell a Story

Figure 3.5: An Entity-Relationship (ER) Diagram for a Customer Order Database

It reads like a

story…

“Once upon a time there was a customer order database. In this database were salespeople, each of whom serviced one or more customers. Each customer could place one or more orders, each of which included one or more line items. Many of these line items could specify the same product. Each order generated one and only one invoice”

Entity

Relationship


Database Management Systems (DBMS)

• Interface between– Database and application programs – Database and the user

• Database types– Flat file– Single user– Multiple users


Data Warehouses, Data Marts, and Data Mining

• Data warehouse: collects business information from many sources in the enterprise

• Data mart: a subset of a data warehouse

• Data mining: an information-analysis tool for discovering patterns and relationships in a data warehouse or a data mart


Business Intelligence

• Business intelligence (BI): gathering the right information in a timely manner and usable form and analyzing it to have a positive impact on business

• Knowledge management: capturing a company’s collective expertise and distributing it wherever it can help produce the biggest payoff


Distributed Databases

• Distributed database– Data may be spread across several smaller

databases connected via telecommunications devices– Corporations get more flexibility in how databases are

organized and used

• Replicated database– Holds a duplicate set of frequently used data


An Overview of Telecommunications and Networks

• Telecommunications: the electronic transmission of signals for communications

• Telecommunications medium: anything that carries an electronic signal and interfaces between a sending device and a receiving device

• Telecommunications carrier: any business that provides (leases, services) telecommunications media.

• Telecommunications service: any service to customers at least partially facilitated by telecommunications

Ch 4


Communication Model

Sender Channel ReceiverEncoding Decoding

M e s s a g e

Meaning-1

Meaning-2

Challenges:

1. Various processes2. Will meanings match?3. Why encode?4. Purpose? Intention?

Expression Interpretation


Characteristics of Communication

• Encoding/decoding scheme• Speed of transmission (baud)• Directionality (one-way, bidirectional, switchable)• Noise• Equivocation (loss of signal)• Ambiguity (loss of meaning)• Turntaking (protocol)


The Telecommunications Problem


Distance: Sender and Receiver are not in direct contactEquivocation: Message loses power over distanceNoise: Channel introduces unwanted messageCoordination: It’s not clear what a message event is


Solutions to the problems


Distance: Long “wires” of various typesEquivocation: Boosting of power (introduces noise)Noise: Special encoding schemesCoordination: Coordination messages (protocols)

Notice: Nothing about meaning, intention


Basic Economics

• Sources aren’t “on” all the time• Sources make mistakes; repetition is dangerous and costly• Channels are usually relatively expensive• Sharing channels is a good use of an expensive resource;

sharing is costly• All channels are error-prone; the way to compensate is

redundancy• The more complex the scheme, the higher the cost and the

more likely is failure or error.


ANALOG signal: strength

is proportional to “content”

1

What Is a Signal?

• A communication event

• Has a definite start and stop

• Carries information (which is NOT the signal)

0

DIGITAL signal: strength is fixed at either 0 or a

constant

1 1 11 0 0 0


What Is the Advantage of Digital Signalling?

• First, simplicity, only two signal levels

• Second, resistance to noise

• Third, amplification can work without amplifying noise

• Fourth, potential to add check bits to reconstruct byte in the event of errors (for example, parity checking).


Carriers and Services

• Local exchange carrier (LEC): a public telephone company in the United States that provides service to homes and businesses within its defined geographical area

• Competitive local exchange carrier (CLEC): a company that is allowed to compete with the LECs, such as a wireless, satellite, or cable service provider

• Long-distance carrier: a traditional long-distance phone provider, such as AT&T, Sprint, or MCI


What Are Networks For?

• At an electrical level, networks move electrons along paths between nodes

• At a signal level, networks move coded characters along links connecting nodes

• At a transportation level, networks move packages or packets of characters between source and destination along paths within the network

• At a session level, networks move messages from sender to receiver.

• At the application level, networks move information from a server to a client.

Businesses can select various ways for this to happen.


Networks

• Computer network: the communications media, devices, and software needed to connect two or more computer systems or devices

• Network nodes: the computers and devices on the networks

Node


Basic Processing Strategies

• Centralized processing: all processing occurs in a single location or facility

• Decentralized processing: processing devices are placed at various remote locations

• Distributed processing: computers are placed at remote locations but connected to each other via a network


Terminal-to-Host, File Server, and Client/Server Systems

• Connecting computers in distributed information processing: – Terminal-to-host: the application and database

reside on one host computer, and the user interacts with the application and data using a “dumb” terminal

– File server: the application and database reside on the one host computer, called the file server

– Client/server: multiple computer platforms are dedicated to special functions, such as database management, printing, communications, and program execution


Communications Software and Protocols

• Communications software: software that provides a number of important functions in a network, such as error checking and data security

• Network operating system (NOS)

• Network management software

• Communications protocol: a standard set of rules that controls a telecommunications connection


Packet Switching

• Sender’s message is broken into (generally short, fixed-length) packets

• Each packet is numbered and sent “into” the network

• The network transmits the packets• The node assembles the packets in order (not an

easy task)• The receiver gets the message from the node.


How the Internet Works

• The Internet transmits data from one computer (called a host) to another

• If the receiving computer is on a network to which the first computer is directly connected, it can send the message directly

• If the receiving computer is not on a network to which the sending computer is connected, the sending computer relays the message to another computer that can forward it


How the Internet Works (continued)

• Data is passed in chunks called packets

• Internet Protocol (IP): communications standard that enables traffic to be routed from one network to another as needed

• Transmission Control Protocol (TCP): widely used transport-layer protocol that is used in combination with IP by most Internet applications

• Uniform Resource Locator (URL): an assigned address on the Internet for each computer


Internet Service Providers

• Internet service provider (ISP): any company that provides individuals or organizations with access to the Internet

• Most charge a monthly fee

• Many ISPs and online services offer broadband Internet access through digital subscriber lines (DSLs), cable, or satellite transmission


The World Wide Web

• The Web, WWW or W3

• A menu-based system that uses the client/server model

• Organizes Internet resources throughout the world into a series of menu pages, or screens, that appear on your computer

• Hypermedia: tools that connect the data on Web pages, allowing users to access topics in whatever order they want


The World Wide Web (continued)

• Hypertext Markup Language (HTML): the standard page description language for Web pages

• HTML tags: codes that let the browser know how to format the text on a Web page and whether images, sound, and other elements should be inserted


Web Browsers

• Web browser: software that creates a unique, hypermedia-based menu on a computer screen, providing a graphical interface to the Web

• The menu consists of graphics, titles, and text with hypertext links

• Ubiquitous and non-proprietary web browsers make it possible for the Internet to be a business platform.


Search Engines

• Search engine: a Web search tool

• Examples: Yahoo.com, Google.com

• Most search engines are free

• Searches can use words, such as AND and OR, to refine the search


Intranets and Extranets

• Intranet– Internal corporate network built using Internet and

World Wide Web standards and products– Used by employees to gain access to corporate

information– Slashes the need for paper


Intranets and Extranets (continued)

• Extranet– A network based on Web technologies that links

selected resources of a company’s intranet with its customers, suppliers, or other business partners

• Virtual private network (VPN): a secure connection between two points across the Internet

• Tunneling: the process by which VPNs transfer information by encapsulating traffic in IP packets over the Internet


Net Issues

• Management issues– No centralized governing body controls the

Internet

• Service and speed issues– Web server computers can be overwhelmed by

the amount of “hits” (requests for pages) – More and more Web sites have video, audio clips,

or other features that require faster Internet speeds


Net Issues (continued)

• Privacy– Spyware: hidden files and information trackers that

install themselves secretly when you visit some Internet sites

– Cookie: a text file that an Internet company can place on the hard disk of a computer system

• Fraud– Phishing


Net Issues (continued)

• Security with encryption and firewalls– Cryptography: converting a message into a secret

code and changing the encoded message back to regular text

– Digital signature: encryption technique used to verify the identity of a message sender for processing online financial transactions

– Firewall: a device that sits between an internal network and the Internet, limiting access into and out of a network based on access policies


The Supply Chain

Suppliers

Focal Firm (Producer or

Service Provider)

Buyers

The Value Chain coexists with the supply chain, adding “value” at every link in the chain

Procurement, inbound logistics, production, outbound logistics, sales, servicing

Ch 5


The E-Commerce Supply Chain

Suppliers

Focal Firm (Producer or

Service Provider)

Buyers

These links are all electronic.

Info is maintained in

data bases

These links are all electronic.

Info is maintained in

data bases


E-Commerce Supply Chain Management

• Supply chain management is a key value chain composed of:– Demand planning– Supply planning– Demand fulfillment

• It’s actually a supply network.

• The supply chain is the upstream aspect of the value chain.

• The value chain is actually a value network.


Mobile Commerce

• Mobile commerce (m-commerce) relies on the use of wireless devices, such as personal digital assistants, cell phones, and smart phones, to place orders and conduct business

• What does it mean to “be mobile”?

• Issues confronting m-commerce– User-friendliness of the wireless device– Network speed– Security


Mobile Commerce (continued)

• Handheld devices used for m-commerce have limitations that complicate their use

• Wireless application protocol (WAP): a standard set of specifications for Internet applications that run on handheld, wireless devices


Electronic Payment Systems

• Digital certificate: an attachment to an e-mail message or data embedded in a Web page that verifies the identity of a sender or a Web site

• Electronic cash: an amount of money that is computerized, stored, and used as cash for e-commerce transactions


Electronic Payment Systems (continued)

• Electronic wallet: a computerized stored value that holds credit card information, electronic cash, owner identification, and address information

• Credit card

• Charge card

• Debit card

• Smart card


An Overview of Transaction Processing Systems

• Provide data for other business processes:– Management information system/decision support

system (MIS/DSS)– Special-purpose information systems

• Process the detailed data necessary to update records about the fundamental business operations

• Include order entry, inventory control, payroll, accounts payable, accounts receivable, and the general ledger.


An Overview of Transaction Processing Systems (continued)

Figure 5.6: TPS, MIS/DSS, and Special Information Systems in Perspective


Traditional Transaction Processing Methods and Objectives

• Batch processing system: method of computerized processing in which business transactions are accumulated over a period of time and prepared for processing as a single unit or batch

• Online transaction processing (OLTP): computerized processing in which each transaction is processed immediately, without the delay of accumulating transactions into a batch


Transaction Processing Activities

• TPSs– Capture and process data that describes fundamental

business transactions– Update databases– Produce a variety of reports

• Transaction processing cycle: the process of data collection, data editing, data correction, data manipulation, data storage, and document production


Transaction Processing Activities (continued)

Figure 5.8: Data Processing Activities Common to TPSs



• Data collection– Should be collected at source– Should be recorded accurately, in a timely fashion

• Data editing

• Data correction



• Data manipulation

• Data storage

• Document production and reports


International Issues

• Issues that multinational corporations face in planning, building, and operating their TPSs– Different languages and cultures– Disparities in IS infrastructure– Varying laws and customs rules– Multiple currencies


Enterprise Resource Planning: An Overview of Enterprise Resource

Planning

• Enterprise resource planning (ERP) systems are used in large, midsized, and small companies

• Real-time monitoring of business functions

• Timely analysis of key issues, such as quality, availability, customer satisfaction, performance, and profitability


Definition

• The adoption of an integrated, comprehensive set of applications that communicate easily with one another to handle all of a firm’s business


Basic Philosophy

• Division of labor, basis of bureaucracy isn’t whole story

• Business is an integrated, tightly cohesive system

• Structure follows form follows function follows information!

• Redundancy, duplication are bad

• Variety is the enemy


Typically, corporate IT use is …

SalesPOS

System

ProductionSystem

AccountsReceivable

FinanceSpreadsheet

Sales MgmtSoftware

ProductionMgmt

Application

AccountingSystem

DebtManagementApplication

Sales EISProduction

DSSCorporate

AccountabilityFinance

ESS

Man

agem

ent

Leve

l

Division, Function, Responsibility


Fragmented, Fractured…

SalesPOS

System

ProductionSystem

AccountsReceivable

FinanceSpreadsheet

Sales MgmtSoftware

ProductionMgmt

Application

AccountingSystem


Sales EISProduction

DSSCorporate


ESS

Man

agem

ent

Leve

l


No communication across functions

No

ag

gre

gat

ion

or

dis

sem

inat

ion

acr

oss

lev

els

of

resp

on

sib

ilit

y


Integration Proceeds in Two Dimensions

SalesPOS

System

ProductionSystem

AccountsReceivable

FinanceSpreadsheet

Sales MgmtSoftware

ProductionMgmt

Application

AccountingSystem


Sales EISProduction

DSSCorporate


ESS


Common data formats, real-time data processing, client-server platforms, and Internet-based extranets enable data to move “seamlessly” across divisional boundaries, lubricating the movement of semi-finished inventory, product, etc. One barrier to integration is removed.

Common user interfaces enable better communication and movement of human resources among divisions

1. Cross-Functional


Typically, corporate IT use is …

SalesPOS

System

ProductionSystem

AccountsReceivable

FinanceSpreadsheet

Sales MgmtSoftware

ProductionMgmt

Application

AccountingSystem


Sales EISProduction

DSSCorporate


ESS

Man

agem

ent

Leve

l

Central repositories, common formats, real-time processing, updated security, mobile technologies enable executives, managers, supervisors and workers at all levels to create, access, use, and update information according to their needs.

2. Vertical-ly Integra-

ted


Result?

Sales datageneratedfrom POS

Available to SalesManagers to forecast

demand

And to productionstations forschedule generation

And to productionmanagement to monitorproductivity, anticipate

problems

And to CFO to updateinformation for loan

repayment, renegotiation

And to customers to estimate deliverytime, options, etc.

Extra-net

And to all em-ployees to keepthem informedabout working

conditions

Intra-

net


Why Is Enterprise Computing Important?

• Integrates the supply chain

• Provides for organizational learning

• Introduces strong IT efficiencies through common approaches

• Solves management problems of burgeoning IT costs (consolidation)

• Recognizes IT’s central role in integration, lubrication of business processes


What Makes ERP/EC Difficult?

• Sheer volume of data• Divisional lore• Actual divisions of labor• Human nature (undesirability of change)• Poorly thought-through problem statement• High initial cost• Legacy systems, sunk costs• Near-monopoly supplier situation (SAP, Bahn, Peoplesoft,

Oracle are really only suppliers)


Advantages and Disadvantages of ERP

• Elimination of costly, inflexible legacy systems

• Improvement of work processes

• Increase in access to data for operational decision making

• Upgrade of technology infrastructure

• Expense and time in implementation


Advantages and Disadvantages of ERP (continued)

• Difficulty implementing change

• Difficulty integrating with other systems

• Risks in using one vendor

• Risk of implementation failure


Plus Material NOT in the Book

• *Internet as E-Commerce Platform (.asp)• *The Business Platform Idea (.ppt) What business

needs to function• *The Computer Idea (.ppt) Computers as ideal

office assistants• *The Database Idea (.ppt) Integrating data• *The Economy of Style Idea (.ppt) Another basis

for competition• *Transaction Processing Systems (.ppt) Gold in old

transactions

http://www.sba.oakland.edu/Faculty/licker/Personal/MIS300/CommonMaterials/SupplementaryMaterials/InternettoECommerce.asp

http://www.sba.oakland.edu/Faculty/licker/Personal/MIS300/CommonMaterials/SupplementaryMaterials/TheBusinessPlatformIdea.ppt



http://www.sba.oakland.edu/Faculty/licker/Personal/MIS300/CommonMaterials/SupplementaryMaterials/TheComputerIdea.ppt



http://www.sba.oakland.edu/Faculty/licker/Personal/MIS300/CommonMaterials/SupplementaryMaterials/The%20Database%20Idea.ppt



http://www.sba.oakland.edu/Faculty/licker/Personal/MIS300/CommonMaterials/SupplementaryMaterials/TheEconomyofStyleIdea.ppt



http://www.sba.oakland.edu/Faculty/licker/Personal/MIS300/CommonMaterials/SupplementaryMaterials/Cinderella.ppt




Information Laws

• Conservation: Information cannot come from nowhere

• Utilization: Data cannot go nowhere

• Logical Data Flow: Outputs must be completely determined by inputs plus processing

• Data Integrity: All changes to data stores must be made by processes inside a system

Documents

MIS 300 Midterm Summary1 Sections Covered in 1 st Part of Course