Management
Management
Information Systems,
Information Systems,
10/e
10/e
Raymond McLeod and George
Raymond McLeod and George
Schell
© 2007 by Prentice Hall
© 2007 by Prentice Hall Management Information Systems, 10/e RManagement Information Systems, 10/e R
aymond McLeod and George Schell
aymond McLeod and George Schell
2
2
Chapter 8
Chapter 8
Information in Action
Learning Objectives
Learning Objectives
►
Know that a firm’s ability to develop effective
Know that a firm’s ability to develop effective
information systems can be a key factor in its success.
information systems can be a key factor in its success.
►
Recognize that the transaction processing system
Recognize that the transaction processing system
processes describes the firm’s basic daily operations.
processes describes the firm’s basic daily operations.
►
Be familiar with the processes performed by a
Be familiar with the processes performed by a
transaction processing system for a distribution firm.
transaction processing system for a distribution firm.
►
Recognize that organizational information systems
Recognize that organizational information systems
have been developed for business areas &
have been developed for business areas &
organizational levels.
organizational levels.
►
Be familiar with architectures of marketing, human
Be familiar with architectures of marketing, human
resources, manufacturing, & financial information
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Learning Objectives (Cont’d)
Learning Objectives (Cont’d)
►
Know the architecture of an executive information system.
Know the architecture of an executive information system.
►Understand what customer relationship management is &
Understand what customer relationship management is &
why is requires a large computer storage capability.
why is requires a large computer storage capability.
►
Recognize how a data warehouse differs from a database.
Recognize how a data warehouse differs from a database.
►Understand the architecture of a data warehouse system.
Understand the architecture of a data warehouse system.
►Know how data are stored in a data warehouse data
Know how data are stored in a data warehouse data
repository.
repository.
►
Know how a user navigates through the data repository.
Know how a user navigates through the data repository.
►Know what on-line analytical processing (OLAP) is.
Know what on-line analytical processing (OLAP) is.
Information as a Critical Success
Information as a Critical Success
Factor
Factor
►
Critical success factor (CSF)
Critical success factor (CSF)
was coined by
was coined by
Ronald Daniel to identify a few key activities
Ronald Daniel to identify a few key activities
that spell success or failure for any type of
that spell success or failure for any type of
organization.
organization.
►
Transaction processing system (TPS)
Transaction processing system (TPS)
is the
is the
information system that gathers data
information system that gathers data
describing the firm’s activities, transforms the
describing the firm’s activities, transforms the
data into information, & makes the information
data into information, & makes the information
available to users both inside & outside the
available to users both inside & outside the
firm.
firm.
© 2007 by Prentice H all
Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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System Overview
System Overview
►
Distribution system
Distribution system
is a TPS used by
is a TPS used by
distribution firms.
distribution firms.
►
Distribution firms distribute products or
Distribution firms distribute products or
services to their customers.
services to their customers.
►
We will use data flow diagrams, or
We will use data flow diagrams, or
DFDs, to document the system.
DFDs, to document the system.
[image:7.720.22.703.128.514.2]© 2007 by Prentice H all
Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Figure 8.2 Context Diagram of
Figure 8.2 Context Diagram of
Figure 8.3 Figure 0 Diagram of
Figure 8.3 Figure 0 Diagram of
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
10
Major Subsystems of
Major Subsystems of
Distribution System
Distribution System
►
Systems that fill customer orders.
Systems that fill customer orders.
Order entry system
Order entry system
enters customer orders into
enters customer orders into
the system.
the system.
Inventory system
Inventory system
maintains the inventory
maintains the inventory
records.
records.
Billing system
Billing system
prepares the customer invoices.
prepares the customer invoices.
Accounts receivable system
Accounts receivable system
collects the money
collects the money
from the customers.
from the customers.
►
Systems that order replenishment stock.
Systems that order replenishment stock.
Purchasing system
Purchasing system
issues purchase orders to
issues purchase orders to
suppliers for needed stock.
suppliers for needed stock.
Receiving system
Receiving system
receives the stock.
receives the stock.
Figure 8.4 Figure 1 Diagram of
Figure 8.4 Figure 1 Diagram of
Systems that Fills Customers
Systems that Fills Customers
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Figure 8.5 Figure 2 Diagram of
Figure 8.5 Figure 2 Diagram of
Major Subsystems of
Major Subsystems of
Distribution System (Cont’d)
Distribution System (Cont’d)
►
Systems that perform general ledger processes.
Systems that perform general ledger processes.
General ledger system
General ledger system
is the accounting system
is the accounting system
that combines data from other accounting systems
that combines data from other accounting systems
for the purpose of presenting a composite financial
for the purpose of presenting a composite financial
picture of the firm’s operations.
picture of the firm’s operations.
General ledger
General ledger
is the file that contains the
is the file that contains the
combined accounting data.
combined accounting data.
Updated general ledger system
Updated general ledger system
posts records
posts records
that describe various actions & transactions to the
that describe various actions & transactions to the
general ledger.
general ledger.
Prepare management reports system
Prepare management reports system
uses the
uses the
contents of the general ledger to prepare the
contents of the general ledger to prepare the
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Figure 8.6 Figure 3 Diagram of
Figure 8.6 Figure 3 Diagram of
Systems that Perform General
Systems that Perform General
Organizational Information
Organizational Information
Systems
Systems
►
Organizational information systems
Organizational information systems
are developed to meet the needs for
are developed to meet the needs for
information relating to those particular
information relating to those particular
parts of the organization.
parts of the organization.
►
Marketing information system
Marketing information system
(MKIS)
(MKIS)
provides information that relates
provides information that relates
to the firm’s marketing activities.
to the firm’s marketing activities.
Consists of a combination of input & output
Consists of a combination of input & output
subsystems connected by a database.
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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MKIS
MKIS
►
Output subsystems
Output subsystems
provide information about
provide information about
critical elements in marketing mix.
critical elements in marketing mix.
►
Marketing mix
Marketing mix
consists of 4 main ingredients that
consists of 4 main ingredients that
management manages in order to meet customers’
management manages in order to meet customers’
needs at a profit.
needs at a profit.
Product subsystemProduct subsystem provides information about the firm’s provides information about the firm’s
products. products.
Place subsystemPlace subsystem provides information about the firm’s provides information about the firm’s
distribution network. distribution network.
Promotion subsystemPromotion subsystem provides information about the provides information about the
firm’s advertising & personal selling activities. firm’s advertising & personal selling activities.
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MKIS (Cont’d)
MKIS (Cont’d)
►
Database
Database
is populated with data from the
is populated with data from the
three MKIS input subsystems.
three MKIS input subsystems.
►
Input subsystems
Input subsystems
Transaction processing system
Transaction processing system
gathers data
gathers data
from both internal & environmental sources & enters
from both internal & environmental sources & enters
the data into the database.
the data into the database.
Marketing research subsystem
Marketing research subsystem
gathers internal
gathers internal
& environmental data by conducting special studies.
& environmental data by conducting special studies.
Marketing intelligence subsystem
Marketing intelligence subsystem
gathers
gathers
environmental data that serves to keep
environmental data that serves to keep
management informed of activities of the firm’s
management informed of activities of the firm’s
competitors & customers & other elements that can
competitors & customers & other elements that can
influence marketing operations.
Other Organizational
Other Organizational
Information System
Information System
►
Human Resources information system
Human Resources information system
(
(
HRIS
HRIS
) provides information to managers
) provides information to managers
throughout the firm concerning the firm’s
throughout the firm concerning the firm’s
human resources.
human resources.
►
Manufacturing information system
Manufacturing information system
provides information to managers throughout
provides information to managers throughout
the firm concerning the firm’s manufacturing
the firm concerning the firm’s manufacturing
operations.
operations.
►
Financial information system
Financial information system
provides
provides
information to managers throughout the firm
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Figure 8.9 Model of
Figure 8.9 Model of
Manufacturing Information
Manufacturing Information
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Figure 8.10 Model of Financial
Figure 8.10 Model of Financial
Executive Information
Executive Information
System
System
►
Executive information system (EIS)
Executive information system (EIS)
is a
is a
system that provides information to
system that provides information to
upper-level managers on the overall performance
level managers on the overall performance
of the firm; also called
of the firm; also called
Executive support
Executive support
system (ESS)
system (ESS)
.
.
►
Drill-down capability
Drill-down capability
allows for executives
allows for executives
to bring up a summary display & then
to bring up a summary display & then
successively display lower levels of detail
successively display lower levels of detail
until executives are satisfied that they have
© 2007 by Prentice H all
Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Figure 8.12 Drill-down
Figure 8.12 Drill-down
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Customer Relationship
Customer Relationship
Management
Management
►
Customer relationship management
Customer relationship management
(
(
CRM
CRM
) is the management of the relationships
) is the management of the relationships
between the firm & its customers so that both
between the firm & its customers so that both
the firm & its customers receive maximum
the firm & its customers receive maximum
value from the relationship.
value from the relationship.
►
CRM system
CRM system
accumulates customer data over
accumulates customer data over
a long term – 5 years, 10 years, or more - &
a long term – 5 years, 10 years, or more - &
uses that data to produce information for
uses that data to produce information for
users.
users.
Data Warehousing
Data Warehousing
►
Data warehouse
Data warehouse
describes data storage that
describes data storage that
has the following characteristics:
has the following characteristics:
Storage capacity is very large.
Storage capacity is very large.
Data are accumulated by adding new records, as
Data are accumulated by adding new records, as
opposed to being kept current by updating existing
opposed to being kept current by updating existing
records with new information.
records with new information.
Date are easily retrievable.
Date are easily retrievable.
Date are used solely for decision making, not for use
Date are used solely for decision making, not for use
in the firm’s daily operations.
in the firm’s daily operations.
►
Data mart
Data mart
is a database that contains data
is a database that contains data
describing only a segment of the firm’s
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Data Warehousing System
Data Warehousing System
►
Data warehousing
Data warehousing
is the creation & use
is the creation & use
of a data warehouse or data mart.
of a data warehouse or data mart.
►
Primary data sources
Primary data sources
are TPS & data
are TPS & data
obtained from other sources, both
obtained from other sources, both
internal & environmental; any data
internal & environmental; any data
identified as having potential value in
identified as having potential value in
decision making.
decision making.
►
Staging area
Staging area
is where the data
is where the data
undergoes extraction, transformation, &
undergoes extraction, transformation, &
loading (abbrev. as
Data Warehousing System
Data Warehousing System
(Cont’d)
(Cont’d)
►
Extraction
Extraction
process combines data from the
process combines data from the
various sources.
various sources.
►
Transformation
Transformation
process cleans the data, puts it
process cleans the data, puts it
into standardized format, & prepares summaries.
into standardized format, & prepares summaries.
Data stored in both detail & summary form.
Data stored in both detail & summary form.
►
Loading
Loading
process involves the entry of the data
process involves the entry of the data
into the data warehouse repository.
into the data warehouse repository.
►
Metadata
Metadata
“
“
Data about data”.
Data about data”.
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Figure 8.13 Model of Data
Figure 8.13 Model of Data
Storing Data in the Warehouse
Storing Data in the Warehouse
Data Repository
Data Repository
►
Dimension tables
Dimension tables
store the identifying &
store the identifying &
descriptive data.
descriptive data.
Dimension
Dimension
provides the basis for viewing the
provides the basis for viewing the
data from
data from
various perspectives
various perspectives
or
or
dimensions
dimensions
.
.
►
Fact tables
Fact tables
are separate tables containing
are separate tables containing
the quantitative measures of an entity.
the quantitative measures of an entity.
Combined with dimension table data, various
Combined with dimension table data, various
analyses can be prepared.
analyses can be prepared.
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Figure 8.14 Simple Dimension
Figure 8.14 Simple Dimension
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Storing Data … (Cont’d)
Storing Data … (Cont’d)
►
Information package
Information package
identifies all of the
identifies all of the
dimensions that will be used in analyzing a
dimensions that will be used in analyzing a
particular activity.
particular activity.
►
Star schema
Star schema
- for each dimension, a key
- for each dimension, a key
identifies the dimension & provides the link to
identifies the dimension & provides the link to
the information package which results in a
the information package which results in a
structure that is similar to the pattern of a star.
structure that is similar to the pattern of a star.
The warehouse data repository contains multiple
The warehouse data repository contains multiple
star schemas, one for each type of activity to be
star schemas, one for each type of activity to be
analyzed.
Figure 8.16 Information Package
Figure 8.16 Information Package
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Figure 8.17 Sample Information
Figure 8.17 Sample Information
Figure 8.18 Star Schema
Figure 8.18 Star Schema
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Figure 8.19 A Sample Star
Figure 8.19 A Sample Star
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Management Information S ystems, 10/e Raymond Mc Leod and George Schell
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Figure 8.21 Drilling Across
Figure 8.21 Drilling Across
Hierarchies Produces Multiple
Hierarchies Produces Multiple
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OLAP
OLAP
►
On-line analytical processing
On-line analytical processing
(
(
OLAP
OLAP
) enables the
) enables the
user to communicate with the data warehouse either
user to communicate with the data warehouse either
through a GUI or a Web interface & quickly produce
through a GUI or a Web interface & quickly produce
information in a variety of forms, including graphics.
information in a variety of forms, including graphics.
►
Relational OLAP
Relational OLAP
(
(
ROLAP
ROLAP
) uses a standard relational
) uses a standard relational
database management system.
database management system.
ROLAP data exists in detailed form.ROLAP data exists in detailed form.
Analyses must be performed to produce summaries.Analyses must be performed to produce summaries. Constrained to a limited number of dimensions.Constrained to a limited number of dimensions.
►
Multidimensional OLAP
Multidimensional OLAP
(
(
MOLAP
MOLAP
) uses a special
) uses a special
multidimensional database management system.
multidimensional database management system.
MOLAP data are preprocessed to produce summaries at the MOLAP data are preprocessed to produce summaries at the
various levels of detail & arranged by the various dimensions. various levels of detail & arranged by the various dimensions.
Faster summary ability, can use many dimensions – 10 or Faster summary ability, can use many dimensions – 10 or
Figure 8.22 ROLAP & MOLAP
Figure 8.22 ROLAP & MOLAP
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Figure 8.23 Example Report
Figure 8.23 Example Report
Figure 8.24 Example Report
Figure 8.24 Example Report
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Data Mining
Data Mining
►
Data mining
Data mining
is the process of finding
is the process of finding
relationships in data that are unknown to the
relationships in data that are unknown to the
user.
user.
►
Hypothesis verification
Hypothesis verification
begins with the user’s
begins with the user’s
hypothesis of how data are related.
hypothesis of how data are related.
Retrieval process guided entirely by user.
Retrieval process guided entirely by user.
Selected information can be no better than user’s
Selected information can be no better than user’s
understanding of the data.
understanding of the data.
Traditional way to query a database.
Traditional way to query a database.
►
Knowledge discovery
Knowledge discovery
is when the data
is when the data
warehousing system analyzes the warehouse
warehousing system analyzes the warehouse
data repository, looking for groups with common
data repository, looking for groups with common
characteristics.
