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Chapter 1

Business Information Systems

Management Information Systems
Lecturer. Seang Lypengleang
Email: lypengleang@gmail.com, lseang@zamanuniversity.edu.kh
Zaman University


Business Information Systems
• The Information Age
• Business Information Systems
• Data, Information, and Information Systems
• Types of Information Systems
• Information Systems in Business Functions
• Careers in Information Systems
• Review and Discussion Questions

Business Information Systems
You will learn to:
1. Explain why information technology matters.
2. Define digital information and explain why digital systems are
so powerful and useful.
3. Explain why information systems are essential to business.
4. Describe how computers process data into useful information
for problem solving and decision making.
5. Identify the functions of different types of ISs in business.
6. Describe careers in information technology.

• Liz and Michael Kimball dreamed about opening their own
• Liz was a great cook and had accumulated many family recipes
for appetizers, entrees, and bakery desserts.
• Michael had a degree in business and several years of
experience in business management.
• They believed that it was the right time to think about new
careers and realize their dream.

• They live in Lakeside Heights, a suburb of a metropolitan city.
Many of the adults in the community are college-educated and
have professional jobs in business and manufacturing.
• Michael and Liz believe that a restaurant serving Liz’s specialties
of “home style” American, Italian, and seafood dishes would be
a good choice for their location.
• They are excited about the possibility of providing quality food
at a reasonable cost.

Researching the Business
• Before they start running their restaurant, they tried to use
some of the previous owner’s data to calculate the seasonal and
weekly trends.
• Then they estimated the weekly sales for the restaurant for the
first year. The entire spreadsheet calculated the variable costs
(labor, food) based on the number of meals served.
• After doing the survey, Liz and Michael could present these
forecasts and a business plan to a bank for a loan for the startup

Launching the Dream
• Kimball’s Restaurant opened in the strip mall location but their
reputation for quality, reasonably priced meals developed, Liz
and Michael knew their dream had become a reality.
• Three years later, Kimball’s was operating successfully and
profitably. Their dining room was often full of customers and
often had a small waiting line on weekend nights and very
satisfied with their dream.
• What would be next?

Business Challenges
• You will learn what Michael and Liz need to get started the
power of information systems to help build and grow their
• They will need to understand how information systems can
help with a restaurant’s short-term (operational) needs as well
as plan for long-term initiatives (strategic) to expand business.
• So for the business challenges, you will learn more about:
1. Business Information Systems
2. Strategic Uses of Information Systems
3. Business Functions and Supply Chains
Business Information Systems

Business Information Systems
• Whether withdrawing money from a bank’s ATM, using the web, or making a
hotel reservation on your phone. Information systems receive and process data
from various sources that become essential to successful business operations.

Business Information Systems
• Continuing the story of KIMBALL’S RESTAURANT over the last
three years, the growth was not so fast as to cause any “growing
pains” or problems with their business for 50 to 100 percent for
dining capacity.
Processing Orders and Payments
• The customer paid the cashier directly with cash or a credit card
and the hardcopy of the check was saved.
• Michael needed to focus more on the operations rather than
data entry, but he also wanted to collect and analyze data about
his business to manage it and plan effectively.
• So they decided to ask Tyler, their son, to join the business
because his education is familiar with family’s the business.
Business Information Systems
Defining the Problems
• Michael told Tyler for analysis without relying on manual data
entry such as completeness and accuracy of guest check
information, and check payment.
• Because the guests’ orders were handwritten, sometimes parts
of the orders were not legible, some of the information was
either inaccurate or incomplete for that meal choice (cooking
preferences, toppings, special preparation).
• Check payment was another problem whether they should pay
the server or the cashier or the issues whether the customer
paid the cashier or left without paying.
• Meals sometimes were not prepared properly and it was
impossible for the changes ordering.
Business Information Systems
Collecting Data to Address Problems and Make Decisions
• Michael would also like to know more details about the ordering
of meals, appetizers, or the specials.
• Liz wanted to know how much food based on past sales.
• Tyler categorized their questions into two areas:
• The marketing information can determine menu planning,
promotions, and customer satisfaction.
• How did they learn about the restaurant?
• Any monitoring of the operations as issues occurred

Business Information Systems
Does Information Technology Matter?
• The Smashburger engaged and promoted their consumers
directly through the social media like Facebook and Twitter.
• A survey demonstrated their adoption of mobile devices using
mobile banking applications to check their account balances
increase of 10 times within one year.
• Business professionals now use social media and mobile
computing clearly relying on a well-developed strategy across all
functions of business organizations and no longer count solely
on IT specialists to make decisions on development, purchasing,
and deployment of information systems like before.
Business Information Systems
The Power of Digital Systems
• In 2012, The Weather Channel developed a Facebook app that
alerts users when severe weather is approaching their friends
and track severe weather in relation to their friends’ locations
from a friend or family member than a generalized.
New Business Models.
• The online video services like Netflix for streaming, Apple
iTunes, Amazon, and others for downloading video has forever
changed how premium video is distributed and even created.

Business Information Systems
E-commerce Expanding
• Facebook, YouTube, Twitter, and Tumblr along with Netflix,
Apple Beats music service, and many other media firms the
new face of e-commerce by selling services.
• The vision of e-commerce is still very powerful and the fastest-
growing form of retail in the United States, based on selling
services, not goods. It’s a services model of e-commerce.
• Information Systems and technologies are the foundation of
this new services-based e-commerce.

Business Information Systems
Management Changes
• The management of business firms has changed: With new
mobile smartphones, high-speed wireless Wi-Fi networks, and
tablets, remote salespeople on the road are only seconds away
from their managers’ questions and oversight.
• Managers on the move are in direct, continuous contact with
their employees with online, nearly instant access to the really
important information they need for accurate and timely

Business Information Systems
The Purpose of Information Systems
• People require information for many reasons:
• You might seek information for entertainment and
enlightenment by viewing television, watching movies,
browsing the Internet, listening to the radio, and reading
newspapers, magazines, and books.
• In business, people and organizations seek and use
information mainly to make sound decisions and to solve
problems to be success.
• For decision making, there are many ways to promote the car,
television advertising, radio advertising, newspaper advertising,
web advertising, auto shows, direct mail, social media.
Business Information Systems
Be Well-Versed in Information Systems
• All knowledge workers—professionals, scientists, managers, and
others who create new information and knowledge in their
work—must be familiar with IT.
• They must know which IT is relevant for their work and what
information they can obtain with a certain technology or
networked resource.
• Successful professionals must know which ISs are available to
their organizations and what systems might be developed in the

Business Information Systems
The Interdependence between Organizations and Information Systems

Data, Information, and Information Systems
Data and Information
• The word data is derived from the Latin datum,
literally a given or fact, which might take the form of
a number, a statement, or a picture. Data is the raw
material in the production of information.

• Information has meaning within a context by

manipulating through tabulation, statistical analysis,
or any other operation that leads to greater
understanding of a situation.
Data, Information, and Information Systems
• A process: manipulate the raw materials of data to produce the useful information.

Data, Information, and Information Systems
Functions of an Information System

Data, Information, and Information Systems
Systems and Subsystems
• System consists of several
subsystems—with sub goals,
all contributing to meeting
the main goal.
• With the same concept, the
accounting system consists of
several subsystems to
Several subsystems make up this corporate accounting
suppliers and service system
providers; and a reporting
mechanism, generates reports
reflecting the company’s
financial status.
Data, Information, and Information Systems
Closed vs. Open Systems
• A closed system stands alone, with no connection to another system
like a small check-producing system that prints and cuts checks when
an employee enters data through a keyboard.
• An open system interfaces and interacts with other systems like the
accounting system that records accounts receivable, accounts
payable, and cash flow is open if it receives its payroll figures from
the payroll system.
Information Systems
• An information system (IS) consists of all the components that work
together to process data and produce information.

Data, Information, and Information Systems
Information Systems are More than Computers

Data, Information, and Information Systems
Information Systems in Organizations

Data, Information, and Information Systems
Several trends of ISs very important in business:
● The data storage devices has grown while their prices have
● The variety software applications have increased.
● A “modern technology” such as mobile computing, tablets, and
cloud computing.
● Quick and reliable communication lines and access to the Internet
and the web using Software as a Service (SaaS).
● The fast growth of the Internet has opened opportunities and
encouraged competition in global markets.
● The convergence of technology innovations such as smart phones,
mobile applications, and cloud storage systems have expanded both
technology adoption and functionality. 28
Data, Information, and Information
Computer Equipment for ISs
• For the data processing functions:
• Input devices introduce data into
the IS.
• The computer processes data
through the IS.
• Output devices display
• Storage devices store data and
• Networking devices and
communications lines transfer data
and information over various

Types of Information Systems
Transaction Processing Systems
• TPSs include POS machines (record
sales), automatic teller machines
(record cash withdrawals), deposits,
and transfers; and purchase order
systems using a credit card.
• The IS can automatically collect,
process the data immediately and
store it for later access on demand.

Types of Information Systems
Supply Chain Management Systems (SCM)
• The activities include marketing,
purchasing raw materials,
manufacturing and assembly, packing
and shipping, billing, collection, and after
the-sale services and monitoring
customer portfolios.
• Therefore, IS that support these
activities to provide information on any
stage of a business process are called
SCM systems or an enterprise
application because each business
process are connected to each other to
form one large IS. With enterprise applications, the organization can access the same
data and share information for their own management tasks such
as iNetSoft shows the various sales, inventory, and quota metrics
Types of Information Systems
Customer Relationship Management Systems (CRM)
• CRM systems help manage an organization’s
relationships with its customers.
• CRM systems help maintain customer records to
sophisticated systems that dynamically analyze and
detect buying patterns and predict when a specific
customer is about to switch to a competitor.
• The main goals of CRM systems are to increase the
quality of customer service, reduce the amount of labor
involved in serving customers, and learn as much as
possible about the buying habits and service
preferences of individual customers.
• CRM systems are often linked to web applications that
track online shopping and process online transactions. 32
Types of Information Systems
Business Intelligence (BI) Systems
• ISs gather data relationships and trends to compete better are (BI)
systems and it consists of statistical models and can access large
pools of data, usually stored in large databases called data
• With proper analysis models, BI systems might discover particular
buying patterns of consumers, such as combinations of products
purchased for a competitor; and other valuable BI that helps
managers quickly decide on changing a strategy.

Types of Information Systems
Geographic Information Systems
• The geographic information systems
(GISs) can be used to tie data to
physical locations related to a map
that contains data about a building,
neighborhood, city, county, state,
country, or even the entire world.
• Many GISs use information from global positioning system (GPS) satellites,
especially to show the current location of a vehicle or person on a map or to
provide directions or information on traffic congestion, alternate routes, or various
services along a route.
• This mobile type of GIS has become popular, preinstalled in vehicles, sold as a
portable device, or integrated into a smartphone.
What Is an Information System?
Contemporary (existing at the same time) Approaches to Information Systems

What Is an Information System?
A Sociotechnique Perspective on Information Systems

• The performance of a system is optimized when both the technology and the
organization mutually adjust to one another until a satisfactory fit is obtained.

What Is an Information System?

Business Information Systems

What Is an Information System?
Examples of Functional Business Processes

What Is an Information System?
The Order Fulfillment Process

Fulfilling a customer order involves a

complex set of steps that requires the
close coordination of the sales,
accounting, and manufacturing
What Is an Information System?
Transaction Processing Systems

What Is an Information System?
How MISs Obtain Their Data from The Organization’s TPS

Three TPS supply summarized transaction

data to the MIS reporting system at the end of
the time period. Managers gain access to the
organizational data through the MIS, which
provides them with the appropriate reports.

What Is an Information System?
Sample MIS Report

What Is an Information System?
Voyage-estimating Decision-support System

It is used daily by managers who

must develop bids on shipping
contracts. 44
What Is an Information System?
• A digital dashboard delivers
comprehensive and accurate
information for decision
making, using a single screen.
• The graphical overview of key
performance indicators helps
managers quickly spot areas
that need attention.

What Is an Information System?
Enterprise Application Architecture

Enterprise applications
automate processes that
span multiple business
functions and
levels and may extend
outside the organization.

What Is an Information System?
Applications of Social Business

What Is an Information System?
Enterprise Social Networking Software Capabilities

What Is an Information System?
The Time/Space Collaboration and Social Tool Matrix

What Is an Information System?
The Business Information Value Chain

Careers in Information Systems
Cracking the Coding Interview
• This is the most recommended book for
programming/coding job interviews because it
contains frequently asked questions from various
tech companies.
• 189 in total can refresh your knowledge. It should
be the first book you read because by reading this
you will automatically gain all the experience you
need to crack a technical job interview.
• The tech companies like Google, Apple and
Microsoft with job interview process make this
book an invaluable resource for all programmers
preparing for tech jobs.
Careers in Information Systems

Careers in Information Systems

Careers in Information Systems

Careers in Information Systems
IT Offers Career Opportunities Money
U.S. News & World Report (out of 25) #1 Soft ware Architect
#3 Soft ware Developer #2 Video Game Designer
#7 Computer System Analyst #8 Database Developer
#8 Information Security Analyst #9 Information Assurance (Security)
#11 Web Developer Analyst
#21 IT Manager #11 Clinical Applications Specialist (IT in
Forbes (out of 10) healthcare)
#8 Soft ware Engineer #14 User Experience Designer
#10 Computer Systems Analyst #17 IT Program Manager

Careers in Information Systems

Review and Discussion Questions
1. What are the pro and con of using social media for advertising
brand building, market research, and customer service?
2. Example of a business decision that was facilitated by using social
media to interest with customers.
3. What kind of companies are best suited to use social technology
for customer service and marketing?
4. Collaboration and teamwork projects should use tools such as
Google Drive, Google Docs, or email, instant messaging
(telegram…), and other open source tools.

Review and Discussion Questions
1. How do TPSs and DSSs differ? Webmaster vs web developer?
2. How do traditional commerce and web-based commerce differ?
What aspects of traditional shopping do you prefer over online
shopping? How has mobile computing altered web-based
3. When would a business use mobile computing or web-based
information systems in their operations?
4. What are the challenges of implementing mobile technology? Are
the savings similar to web-based systems?
5. What does the new IS trends include?

Review and Discussion Questions
1. Describe the characteristics of management information systems
(MIS) and explain how MIS differ from TPS and from DSS.
2. Describe the characteristics of decision support systems (DSS) and
how they benefit businesses.
3. Describe the characteristics of executive support systems (ESS) and
explain how these systems differ from DSS.
4. Explain how enterprise applications improve organizational
5. Define enterprise systems, supply chain management systems,
customer relationship management systems, and knowledge
management systems and describe their business benefits.
6. What is the difference between e-business, e-commerce, and e-
government? 59