CHAPTER 1
INTRODUCTION TO
INFORMATION SYSTEMS
Management Information Systems, 9th edition,
By Raymond McLeod, Jr. and George P. Schell
© 2004, Prentice Hall, Inc.
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Learning Objectives:
• Understand how computer hardware has evolved
to its present level of sophistication.
• Understand the basics of computer and
communications architectures.
• Know the distinction between physical and
conceptual systems.
• Understand how business applications have
evolved from an initial emphasis on accounting
data to the current emphasis on information for
problem solving.
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Learning Objectives (cont.):
• Know how to tailor information systems to
managers based on where they are located in the
organizational structure and what they do.
• Know the relationship between problem solving
and decision making, and know the basic
problem-solving steps.
• Understand what enterprise resource planning
systems are and the reasons for their popularity.
• Know what innovations to expect in information
technology.
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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
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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
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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 6
[Insert Figure 1.1 here]
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Multitasking
• IBM revolutionized the computer industry
in the mid-1960s by introducing the IBM
System/360 line of computers
• These computers were the first to perform
multiple processing tasks concurrently
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Smaller Computers
• The first small-scale systems, called
minicomputers, were smaller and less
powerful but could handle processing for
small organizations more cheaply
• Even smaller microcomputers designed for
individual use were later developed, first by
Apple and Tandy Corp.
• In 1982, IBM introduced the first personal
computer, or PC, in 1982, which has since
become the standard for individual
computing 9
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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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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
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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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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
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THE EVOLUTION IN
COMPUTER APPLICATIONS
• An information system is a conceptual system
that enables managers to control and monitor a
firm’s physical systems used to transform input
resources into output resources
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Transaction Processing Systems
• A transaction processing systems is
shown in Figure 1.8
• It gathers data from the firm’s physical
system and environment and enters it into
its database
• The software also transforms the data into
information for the firm’s managers and
other individuals in the firm’s environment
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Management Information Systems
• Management information systems (MIS)
transform the data in frontline systems, such as
transaction processing systems into information
useful to managers
• Typical MIS modules are report-writing software,
and models that can simulate firm operations
• Information from the MIS is then used by
organizational problem solvers as an aid in decision-
making, as illustrated in Figure 1.9
• Firms can also interact with suppliers or others to
form inter organizational information systems
(IOS), in which the MIS supplies information to the
other members of the IOS as well as the firm's users22
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Virtual Office Systems
• Office automation - the use of electronics to
facilitate communication, began with word
processing
• Subsequent applications include electronic mail,
voice mail, electronic calendaring, and audio and
video conferencing
• These personal productivity systems now
account for a large portion of a firm's use of the
computer as a communications vehicle
• With improvements in networking, the concept of
a virtual office has developed, in which office
activities can be performed without the need for an
employee to be in a specific location 24
Decision Support Systems (DSS)
• A DSS is a system used to assist managers in
making decisions to help solve a specific problem
• Figure 1.10 shows the 3 sources for the
information to be delivered to users: a relational
database, a knowledge base, and a
multidimensional database
• Two additional types of DSS-related software are:
– group decision support systems: used in aiding a
group of managers work out decisions, and
– artificial intelligence: in which a program is created
for a computer to logically analyze a problem on its
own
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Enterprise Resource Planning
Systems (ERP)
• Over time, firms began to use many different
kinds of information systems throughout the firm
• During the 1990s firms began to see the value in
integrating all of these systems so that they could
function as a coordinated unit
• ERP systems are computer-based systems aimed
at meeting this need that enable the management
of all of a firm’s resources on an organization-
wide basis
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MANAGERS AS INFORMATION
SYSTEM USERS
• Managers exist at various managerial levels
and within various business areas of the firm
• What level an IS is developed for influences
how it operates (see Figure 1.11)
• The 3 primary management levels are (see
Figure 1.12):
1. Strategic planning level
2. Management control level
3. Operational control level
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What Managers Do
• Managerial Functions (Managers do the
following):
– Plan what they are to do
– Organize to meet the plan
– Staff their organization with resources
– Direct them to execute the plan
– Control the resources, keeping them on course (see
Figure 1.13)
• Managerial Roles:
– Mintzberg’s framework is made of 10 roles that
managers play, grouped into interpersonal,
informational, and decisional activities (see Table 1.1)
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THE ROLE OF INFORMATION IN
MANAGEMENT PROBLEM SOLVING
• While a problem can be harmful or potentially
harmful to a firm in a negative way, it can also be
beneficial or potentially beneficial in a positive way
• The outcome of the problem-solving activity is a
solution
• A decision is a particular selected course of action
• Simon described problem-solving as being made up
of four phases:
– Intelligence activity
– Design activity
– Choice activity
– Review activity 34
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THE FUTURE OF INFORMATION
TECHNOLOGY
• The future of information technology will
be driven by the following two trends:
– Ongoing cost reductions and increased power
of information technologies
– Convergence between computers and
communications
• To take advantage of these new
possibilities, managers must learn to
incorporate information systems into
decision making
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END OF CHAPTER 1
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