case study information systems introduction

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Dave Bourgeois and David T. Bourgeois

Learning Objectives

Upon successful completion of this chapter, you will be able to:

• define what an information system is by identifying its major components;
• describe the basic history of information systems; and
• describe the basic argument behind the article “Does IT Matter?” by Nicholas Carr.

Please note, there is an updated edition of this book available at https://opentextbook.site . If you are not required to use this edition for a course, you may want to check it out.

Introduction

If you are reading this, you are most likely taking a course in information systems, but do you even know what the course is going to cover? When you tell your friends or your family that you are taking a course in information systems, can you explain what it is about? For the past several years, I have taught an Introduction to Information Systems course. The first day of class I ask my students to tell me what they think an information system is. I generally get answers such as “computers,” “databases,” or “Excel.” These are good answers, but definitely incomplete ones. The study of information systems goes far beyond understanding some technologies. Let’s begin our study by defining information systems.

Defining Information Systems

Almost all programs in business require students to take a course in something called information systems . But what exactly does that term mean? Let’s take a look at some of the more popular definitions, first from Wikipedia and then from a couple of textbooks:

• “Information systems (IS) is the study of complementary networks of hardware and software that people and organizations use to collect, filter, process, create, and distribute data.” [1]
• “Information systems are combinations of hardware, software, and telecommunications networks that people build and use to collect, create, and distribute useful data, typically in organizational settings.” [2]
• “Information systems are interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and viualization in an organization.” [3]

The Components of Information Systems

As I stated earlier, I spend the first day of my information systems class discussing exactly what the term means. Many students understand that an information system has something to do with databases or spreadsheets. Others mention computers and e-commerce. And they are all right, at least in part: information systems are made up of different components that work together to provide value to an organization.

The first way I describe information systems to students is to tell them that they are made up of five components: hardware, software, data, people, and process. The first three, fitting under the technology category, are generally what most students think of when asked to define information systems. But the last two, people and process, are really what separate the idea of information systems from more technical fields, such as computer science. In order to fully understand information systems, students must understand how all of these components work together to bring value to an organization.

Technology can be thought of as the application of scientific knowledge for practical purposes. From the invention of the wheel to the harnessing of electricity for artificial lighting, technology is a part of our lives in so many ways that we tend to take it for granted. As discussed before, the first three components of information systems – hardware, software, and data – all fall under the category of technology. Each of these will get its own chapter and a much lengthier discussion, but we will take a moment here to introduce them so we can get a full understanding of what an information system is.

Information systems hardware is the part of an information system you can touch – the physical components of the technology. Computers, keyboards, disk drives, iPads, and flash drives are all examples of information systems hardware. We will spend some time going over these components and how they all work together in chapter 2.

The third component is data. You can think of data as a collection of facts. For example, your street address, the city you live in, and your phone number are all pieces of data. Like software, data is also intangible. By themselves, pieces of data are not really very useful. But aggregated, indexed, and organized together into a database, data can become a powerful tool for businesses. In fact, all of the definitions presented at the beginning of this chapter focused on how information systems manage data. Organizations collect all kinds of data and use it to make decisions. These decisions can then be analyzed as to their effectiveness and the organization can be improved. Chapter 4 will focus on data and databases, and their uses in organizations.

Networking Communication: A Fourth Technology Piece?

Besides the components of hardware, software, and data, which have long been considered the core technology of information systems, it has been suggested that one other component should be added: communication. An information system can exist without the ability to communicate – the first personal computers were stand-alone machines that did not access the Internet. However, in today’s hyper-connected world, it is an extremely rare computer that does not connect to another device or to a network. Technically, the networking communication component is made up of hardware and software, but it is such a core feature of today’s information systems that it has become its own category. We will be covering networking in chapter 5.

The last component of information systems is process. A process is a series of steps undertaken to achieve a desired outcome or goal. Information systems are becoming more and more integrated with organizational processes, bringing more productivity and better control to those processes. But simply automating activities using technology is not enough – businesses looking to effectively utilize information systems do more. Using technology to manage and improve processes, both within a company and externally with suppliers and customers, is the ultimate goal. Technology buzzwords such as “business process reengineering,” “business process management,” and “enterprise resource planning” all have to do with the continued improvement of these business procedures and the integration of technology with them. Businesses hoping to gain an advantage over their competitors are highly focused on this component of information systems. We will discuss processes in chapter 8.

The Role of Information Systems

Now that we have explored the different components of information systems, we need to turn our attention to the role that information systems play in an organization. So far we have looked at what the components of an information system are, but what do these components actually do for an organization? From our definitions above, we see that these components collect, store, organize, and distribute data throughout the organization. In fact, we might say that one of the roles of information systems is to take data and turn it into information, and then transform that into organizational knowledge. As technology has developed, this role has evolved into the backbone of the organization. To get a full appreciation of the role information systems play, we will review how they have changed over the years. 

The Mainframe Era

From the late 1950s through the 1960s, computers were seen as a way to more efficiently do calculations. These first business computers were room-sized monsters, with several refrigerator-sized machines linked together. The primary work of these devices was to organize and store large volumes of information that were tedious to manage by hand. Only large businesses, universities, and government agencies could afford them, and they took a crew of specialized personnel and specialized facilities to maintain. These devices served dozens to hundreds of users at a time through a process called time-sharing. Typical functions included scientific calculations and accounting, under the broader umbrella of “data processing.”

In the late 1960s, the Manufacturing Resources Planning (MRP) systems were introduced. This software, running on a mainframe computer, gave companies the ability to manage the manufacturing process, making it more efficient. From tracking inventory to creating bills of materials to scheduling production, the MRP systems (and later the MRP II systems) gave more businesses a reason to want to integrate computing into their processes. IBM became the dominant mainframe company. Nicknamed “Big Blue,” the company became synonymous with business computing. Continued improvement in software and the availability of cheaper hardware eventually brought mainframe computers (and their little sibling, the minicomputer) into most large businesses.

The PC Revolution

In 1975, the first microcomputer was announced on the cover of Popular Mechanics : the Altair 8800. Its immediate popularity sparked the imagination of entrepreneurs everywhere, and there were quickly dozens of companies making these “personal computers.” Though at first just a niche product for computer hobbyists, improvements in usability and the availability of practical software led to growing sales. The most prominent of these early personal computer makers was a little company known as Apple Computer, headed by Steve Jobs and Steve Wozniak, with the hugely successful “Apple II.” Not wanting to be left out of the revolution, in 1981 IBM (teaming with a little company called Microsoft for their operating-system software) hurriedly released their own version of the personal computer, simply called the “PC.” Businesses, who had used IBM mainframes for years to run their businesses, finally had the permission they needed to bring personal computers into their companies, and the IBM PC took off. The IBM PC was named Time  magazine’s “Man of the Year” for 1982.

Because of the IBM PC’s open architecture, it was easy for other companies to copy, or “clone” it. During the 1980s, many new computer companies sprang up, offering less expensive versions of the PC. This drove prices down and spurred innovation. Microsoft developed its Windows operating system and made the PC even easier to use. Common uses for the PC during this period included word processing, spreadsheets, and databases. These early PCs were not connected to any sort of network; for the most part they stood alone as islands of innovation within the larger organization.

Client-Server

In the mid-1980s, businesses began to see the need to connect their computers together as a way to collaborate and share resources. This networking architecture was referred to as “client-server” because users would log in to the local area network (LAN) from their PC (the “client”) by connecting to a powerful computer called a “server,” which would then grant them rights to different resources on the network (such as shared file areas and a printer). Software companies began developing applications that allowed multiple users to access the same data at the same time. This evolved into software applications for communicating, with the first real popular use of electronic mail appearing at this time.

This networking and data sharing all stayed within the confines of each business, for the most part. While there was sharing of electronic data between companies, this was a very specialized function. Computers were now seen as tools to collaborate internally, within an organization. In fact, these networks of computers were becoming so powerful that they were replacing many of the functions previously performed by the larger mainframe computers at a fraction of the cost. It was during this era that the first Enterprise Resource Planning (ERP) systems were developed and run on the client-server architecture. An ERP system is a software application with a centralized database that can be used to run a company’s entire business. With separate modules for accounting, finance, inventory, human resources, and many, many more, ERP systems, with Germany’s SAP leading the way, represented the state of the art in information systems integration. We will discuss ERP systems as part of the chapter on process (chapter 9).

The World Wide Web and E-Commerce

First invented in 1969, the Internet was confined to use by universities, government agencies, and researchers for many years. Its rather arcane commands and user applications made it unsuitable for mainstream use in business. One exception to this was the ability to expand electronic mail outside the confines of a single organization. While the first e-mail messages on the Internet were sent in the early 1970s, companies who wanted to expand their LAN-based e-mail started hooking up to the Internet in the 1980s. Companies began connecting their internal networks to the Internet in order to allow communication between their employees and employees at other companies. It was with these early Internet connections that the computer truly began to evolve from a computational device to a communications device.

In 1989, Tim Berners-Lee developed a simpler way for researchers to share information over the network at CERN laboratories, a concept he called the World Wide Web. [4] This invention became the launching point of the growth of the Internet as a way for businesses to share information about themselves. As web browsers and Internet connections became the norm, companies rushed to grab domain names and create websites.

In 1991, the National Science Foundation, which governed how the Internet was used, lifted restrictions on its commercial use. The year 1994 saw the establishment of both eBay and Amazon.com, two true pioneers in the use of the new digital marketplace. A mad rush of investment in Internet-based businesses led to the dot-com boom through the late 1990s, and then the dot-com bust in 2000. While much can be learned from the speculation and crazy economic theories espoused during that bubble, one important outcome for businesses was that thousands of miles of Internet connections were laid around the world during that time. The world became truly “wired” heading into the new millenium, ushering in the era of globalization, which we will discuss in chapter 11.

As it became more expected for companies to be connected to the Internet, the digital world also became a more dangerous place. Computer viruses and worms, once slowly propagated through the sharing of computer disks, could now grow with tremendous speed via the Internet. Software written for a disconnected world found it very difficult to defend against these sorts of threats. A whole new industry of computer and Internet security arose. We will study information security in chapter 6.

As the world recovered from the dot-com bust, the use of technology in business continued to evolve at a frantic pace. Websites became interactive; instead of just visiting a site to find out about a business and purchase its products, customers wanted to be able to customize their experience and interact with the business. This new type of interactive website, where you did not have to know how to create a web page or do any programming in order to put information online, became known as web 2.0. Web 2.0 is exemplified by blogging, social networking, and interactive comments being available on many websites. This new web-2.0 world, in which online interaction became expected, had a big impact on many businesses and even whole industries. Some industries, such as bookstores, found themselves relegated to a niche status. Others, such as video rental chains and travel agencies, simply began going out of business as they were replaced by online technologies. This process of technology replacing a middleman in a transaction is called disintermediation.

As the world became more connected, new questions arose. Should access to the Internet be considered a right? Can I copy a song that I downloaded from the Internet? How can I keep information that I have put on a website private? What information is acceptable to collect from children? Technology moved so fast that policymakers did not have enough time to enact appropriate laws, making for a Wild West–type atmosphere. Ethical issues surrounding information systems will be covered in chapter 12.

The Post-PC World

After thirty years as the primary computing device used in most businesses, sales of the PC are now beginning to decline as sales of tablets and smartphones are taking off. Just as the mainframe before it, the PC will continue to play a key role in business, but will no longer be the primary way that people interact and do business. The limited storage and processing power of these devices is being offset by a move to “cloud” computing, which allows for storage, sharing, and backup of information on a massive scale. This will require new rounds of thinking and innovation on the part of businesses as technology continues to advance.

Can Information Systems Bring Competitive Advantage?

It has always been the assumption that the implementation of information systems will, in and of itself, bring a business competitive advantage. After all, if installing one computer to manage inventory can make a company more efficient, won’t installing several computers to handle even more of the business continue to improve it?

In 2003, Nicholas Carr wrote an article in the Harvard Business Review  that questioned this assumption. The article, entitled “IT Doesn’t Matter,” raised the idea that information technology has become just a commodity. Instead of viewing technology as an investment that will make a company stand out, it should be seen as something like electricity: It should be managed to reduce costs, ensure that it is always running, and be as risk-free as possible.

As you might imagine, this article was both hailed and scorned. Can IT bring a competitive advantage? It sure did for Walmart (see sidebar). We will discuss this topic further in chapter 7.

Sidebar: Walmart Uses Information Systems to Become the World’s Leading Retailer

Walmart is the world’s largest retailer, earning $15.2 billion on sales of $443.9 billion in the fiscal year that ended on January 31, 2012. Walmart currently serves over 200 million customers every week, worldwide. [5] Walmart’s rise to prominence is due in no small part to their use of information systems.

One of the keys to this success was the implementation of Retail Link, a supply-chain management system. This system, unique when initially implemented in the mid-1980s, allowed Walmart’s suppliers to directly access the inventory levels and sales information of their products at any of Walmart’s more than ten thousand stores. Using Retail Link, suppliers can analyze how well their products are selling at one or more Walmart stores, with a range of reporting options. Further, Walmart requires the suppliers to use Retail Link to manage their own inventory levels. If a supplier feels that their products are selling out too quickly, they can use Retail Link to petition Walmart to raise the levels of inventory for their products. This has essentially allowed Walmart to “hire” thousands of product managers, all of whom have a vested interest in the products they are managing. This revolutionary approach to managing inventory has allowed Walmart to continue to drive prices down and respond to market forces quickly.

Today, Walmart continues to innovate with information technology. Using its tremendous market presence, any technology that Walmart requires its suppliers to implement immediately becomes a business standard.

In this chapter, you have been introduced to the concept of information systems. We have reviewed several definitions, with a focus on the components of information systems: technology, people, and process. We have reviewed how the business use of information systems has evolved over the years, from the use of large mainframe computers for number crunching, through the introduction of the PC and networks, all the way to the era of mobile computing. During each of these phases, new innovations in software and technology allowed businesses to integrate technology more deeply.

We are now to a point where every company is using information systems and asking the question: Does it bring a competitive advantage? In the end, that is really what this book is about. Every businessperson should understand what an information system is and how it can be used to bring a competitive advantage. And that is the task we have before us.

Study Questions

• What are the five components that make up an information system?
• What are three examples of information system hardware?
• Microsoft Windows is an example of which component of information systems?
• What is application software?
• What roles do people play in information systems?
• What is the definition of a process?
• What was invented first, the personal computer or the Internet (ARPANET)?
• In what year were restrictions on commercial use of the Internet first lifted? When were eBay and Amazon founded?
• What does it mean to say we are in a “post-PC world”?
• What is Carr’s main argument about information technology?
• Suppose that you had to explain to a member of your family or one of your closest friends the concept of an information system. How would you define it? Write a one-paragraph description  in your own words  that you feel would best describe an information system to your friends or family.
• Of the five primary components of an information system (hardware, software, data, people, process), which do you think is the most important to the success of a business organization? Write a one-paragraph answer to this question that includes an example from your personal experience to support your answer.
• We all interact with various information systems every day: at the grocery store, at work, at school, even in our cars (at least some of us). Make a list of the different information systems you interact with every day. See if you can identify the technologies, people, and processes involved in making these systems work.
• Do you agree that we are in a post-PC stage in the evolution of information systems? Some people argue that we will always need the personal computer, but that it will not be the primary device used for manipulating information. Others think that a whole new era of mobile and biological computing is coming. Do some original research and make your prediction about what business computing will look like in the next generation.
• The Walmart case study introduced you to how that company used information systems to become the world’s leading retailer. Walmart has continued to innovate and is still looked to as a leader in the use of technology. Do some original research and write a one-page report detailing a new technology that Walmart has recently implemented or is pioneering.
• Wikipedia entry on "Information Systems ," as displayed on August 19, 2012.  Wikipedia: The Free Encyclopedia . San Francisco: Wikimedia Foundation. http://en.wikipedia.org/wiki/Information_systems_(discipline). ↵
• Excerpted from Information Systems Today - Managing in the Digital World , fourth edition. Prentice-Hall, 2010. ↵
• Excerpted from Management Information Systems , twelfth edition, Prentice-Hall, 2012. ↵
• CERN's "The Birth of the Web." http://public.web.cern.ch/public/en/about/web-en.html ↵
• Walmart 2012 Annual Report. ↵

Information Systems for Business and Beyond Copyright © 2014 by Dave Bourgeois and David T. Bourgeois is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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Part I: What is an information system?

Chapter 1: What Is an Information System?

Learning Objectives

Upon successful completion of this chapter, you will be able to:

• define what an information system is by identifying its major components;
• describe the basic history of information systems; and
• describe the basic argument behind the article “Does IT Matter?” by Nicholas Carr.

Introduction

Welcome to the world of information systems, a world that seems to change almost daily. Over the past few decades information systems have progressed to being virtually everywhere, even to the point where you may not realize its existence in many of your daily activities. Stop and consider how you interface with various components in information systems every day through different electronic devices. Smartphones, laptop, and personal computers connect us constantly to a variety of systems including messaging, banking, online retailing, and academic resources, just to name a few examples. Information systems are at the center of virtually every organization, providing users with almost unlimited resources.

Have you ever considered why businesses invest in technology? Some purchase computer hardware and software because everyone else has computers. Some even invest in the same hardware and software as their business friends even though different technology might be more appropriate for them. Finally, some businesses do sufficient research before deciding what best fits their needs. As you read through this book be sure to evaluate the contents of each chapter based on how you might someday apply what you have learned to strengthen the position of the business you work for, or maybe even your own business. Wise decisions can result in stability and growth for your future enterprise.

Information systems surround you almost every day. Wi-fi networks on your university campus, database search services in the learning resource center, and printers in computer labs are good examples. Every time you go shopping you are interacting with an information system that manages inventory and sales. Even driving to school or work results in an interaction with the transportation information system, impacting traffic lights, cameras, etc. Vending machines connect and communicate using the Internet of Things (IoT). Your car’s computer system does more than just control the engine – acceleration, shifting, and braking data is always recorded. And, of course, everyone’s smartphone is constantly connecting to available networks via Wi-fi, recording your location and other data.

Can you think of some words to describe an information system? Words such as “computers,” “networks,” or “databases” might pop into your mind. The study of information systems encompasses a broad array of devices, software, and data systems. Defining an information system provides you with a solid start to this course and the content you are about to encounter.

Defining Information Systems

Many programs in business require students to take a course in information systems . Various authors have attempted to define the term in different ways. Read the following definitions, then see if you can detect some variances.

• “An information system (IS) can be defined technically as a set of interrelated components that collect, process, store, and distribute information to support decision making and control in an organization.” [1]
• “Information systems are combinations of hardware, software, and telecommunications networks that people build and use to collect, create, and distribute useful data, typically in organizational settings.” [2]
• “Information systems are interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization.” [3]

The Components of Information Systems

Information systems can be viewed as having five major components: hardware, software, data, people, and processes. The first three are technology . These are probably what you thought of when defining information systems. The last two components, people and processes, separate the idea of information systems from more technical fields, such as computer science. In order to fully understand information systems, you will need to understand how all of these components work together to bring value to an organization.

Technology can be thought of as the application of scientific knowledge for practical purposes. From the invention of the wheel to the harnessing of electricity for artificial lighting, technology has become ubiquitous in daily life, to the degree that it is assumed to always be available for use regardless of location. As discussed before, the first three components of information systems – hardware, software, and data – all fall under the category of technology. Each of these will be addressed in an individual chapter. At this point a simple introduction should help you in your understanding.

Hardware is the tangible, physical portion of an information system – the part you can touch. Computers, keyboards, disk drives, and flash drives are all examples of information systems hardware. How these hardware components function and work together will be covered in Chapter 2.

Software comprises the set of instructions that tell the hardware what to do. Software is not tangible – it cannot be touched.  Programmers create software by typing a series of instructions telling the hardware what to do. Two main categories of software are: Operating Systems and Application software. Operating Systems software provides the interface between the hardware and the Application software. Examples of operating systems for a personal computer include Microsoft Windows and Ubuntu Linux. The mobile phone operating system market is dominated by Google Android and Apple iOS. Application software allows the user to perform tasks such as creating documents, recording data in a spreadsheet, or messaging a friend. Software will be explored more thoroughly in Chapter 3.

The third technology component is data. You can think of data as a collection of facts. For example, your address (street, city state, postal code), your phone number, and your social networking account are all pieces of data. Like software, data is also intangible, unable to be seen in its native state. Pieces of unrelated data are not very useful. But aggregated, indexed, and organized together into a database, data can become a powerful tool for businesses. Organizations collect all kinds of data and use it to make decisions which can then be analyzed as to their effectiveness. The analysis of data is then used to improve the organization’s performance. Chapter 4 will focus on data and databases, and how it is used in organizations.

Networking Communication

Besides the technology components (hardware, software, and data) which have long been considered the core technology of information systems, it has been suggested that one other component should be added: communication. An information system can exist without the ability to communicate – the first personal computers were stand-alone machines that did not access the Internet. However, in today’s hyper-connected world, it is an extremely rare computer that does not connect to another device or to a enetwork. Technically, the networking communication component is made up of hardware and software, but it is such a core feature of today’s information systems that it has become its own category. Networking will be covered in Chapter 5.

When thinking about information systems, it is easy to focus on the technology components and forget to look beyond these tools to fully understand their integration into an organization. A focus on the people involved in information systems is the next step. From the front-line user support staff, to systems analysts, to developers, all the way up to the chief information officer (CIO), the people involved with information systems are an essential element. The people component will be covered in Chapter 9.

The last component of information systems is process. A process is a series of steps undertaken to achieve a desired outcome or goal. Information systems are becoming more integrated with organizational processes, bringing greater productivity and better control to those processes. But simply automating activities using technology is not enough – businesses looking to utilize information systems must do more. The ultimate goal is to improve processes both internally and externally, enhancing interfaces with suppliers and customers. Technology buzzwords such as “business process re-engineering,” “business process management,” and “enterprise resource planning” all have to do with the continued improvement of these business procedures and the integration of technology with them. Businesses hoping to gain a competitive advantage over their competitors are highly focused on this component of information systems. The process element in information systems will be discussed in Chapter 8.

The Role of Information Systems

You should now understand that information systems have a number of vital components, some tangible, others intangible, and still others of a personnel nature. These components collect, store, organize, and distribute data throughout the organization. You may have even realized that one of the roles of information systems is to take data and turn it into information, and then transform that information into organizational knowledge. As technology has developed, this role has evolved into the backbone of the organization, making information systems integral to virtually every business. The integration of information systems into organizations has progressed over the decades. 

The Mainframe Era

From the late 1950s through the 1960s, computers were seen as a way to more efficiently do calculations. These first business computers were room-sized monsters, with several machines linked together. The primary work was to organize and store large volumes of information that were tedious to manage by hand. Only large businesses, universities, and government agencies could afford them, and they took a crew of specialized personnel and dedicated facilities to provide information to organizations.

Time-sharing allowed dozens or even hundreds of users to simultaneously access mainframe computers from locations in the same building or miles away. Typical functions included scientific calculations and accounting, all under the broader umbrella of “data processing.”

In the late 1960s, Manufacturing Resources Planning (MRP) systems were introduced. This software, running on a mainframe computer, gave companies the ability to manage the manufacturing process, making it more efficient. From tracking inventory to creating bills of materials to scheduling production, the MRP systems gave more businesses a reason to integrate computing into their processes. IBM became the dominant mainframe company.  Continued improvement in software and the availability of cheaper hardware eventually brought mainframe computers (and their little sibling, the minicomputer) into most large businesses.

Today you probably think of Silicon Valley in northern California as the center of computing and technology. But in the days of the mainframe’s dominance corporations in the cities of Minneapolis and St. Paul produced most computers. The advent of the personal computer resulted in the “center of technology” eventually moving to Silicon Valley.

The PC Revolution

In 1975, the first microcomputer was announced on the cover of Popular Mechanics : the Altair 8800. Its immediate popularity sparked the imagination of entrepreneurs everywhere, and there were soon dozens of companies manufacturing these “personal computers.” Though at first just a niche product for computer hobbyists, improvements in usability and the availability of practical software led to growing sales. The most prominent of these early personal computer makers was a little company known as Apple Computer, headed by Steve Jobs and Steve Wozniak, with the hugely successful “Apple II.” Not wanting to be left out of the revolution, in 1981 IBM teamed with Microsoft, then just a startup company, for their operating system software and hurriedly released their own version of the personal computer simply called the “PC.” Small businesses finally had affordable computing that could provide them with needed information systems. Popularity of the IBM PC gave legitimacy to the microcomputer and it was named Time  magazine’s “Man of the Year” for 1982.

Because of the IBM PC’s open architecture, it was easy for other companies to copy, or “clone” it. During the 1980s, many new computer companies sprang up, offering less expensive versions of the PC. This drove prices down and spurred innovation. Microsoft developed the Windows operating system, with version 3.1 in 1992 becoming the first commercially successful release. Typical uses for the PC during this period included word processing, spreadsheets, and databases. These early PCs were standalone machines, not connected to a network.

Client-Server

In the mid-1980s, businesses began to see the need to connect their computers as a way to collaborate and share resources. Known as “client-server,” this networking architecture allowed users to log in to the Local Area Network (LAN) from their PC (the “client”) by connecting to a central computer called a “server.” The server would lookup permissions for each user to determine who had access to various resources such as printers and files. Software companies began developing applications that allowed multiple users to access the same data at the same time. This evolved into software applications for communicating, with the first popular use of electronic mail appearing at this time.

This networking and data sharing all stayed mainly within the confines of each business. Sharing of electronic data between companies was a very specialized function. Computers were now seen as tools to collaborate internally within an organization. These networks of computers were becoming so powerful that they were replacing many of the functions previously performed by the larger mainframe computers at a fraction of the cost. It was during this era that the first Enterprise Resource Planning (ERP) systems were developed and run on the client-server architecture. An ERP system is an application with a centralized database that can be used to run a company’s entire business. With separate modules for accounting, finance, inventory, human resources, and many more, ERP systems, with Germany’s SAP leading the way, represented the state of the art in information systems integration. ERP systems will be discussed in Chapter 9.

The Internet, World Wide Web and E-Commerce

The first long distance transmission between two computers occurred on October 29, 1969 when developers under the direction of Dr. Leonard Kleinrock sent the word “login” from the campus of UCLA to Stanford Research Institute in Menlo Park, California, a distance of over 350 miles. The United States Department of Defense created and funded ARPA Net (Advanced Research Projects Administration), an experimental network which eventually became known as the Internet. ARPA Net began with just four nodes or sites, a very humble start for today’s Internet. Initially, the Internet was confined to use by universities, government agencies, and researchers. Users were required to type commands (today we refer to this as “command line”) in order to communicate and transfer files. The first e-mail messages on the Internet were sent in the early 1970s as a few very large companies expanded from local networks to the Internet. The computer was now evolving from a purely computational device into the world of digital communications.

In 1989, Tim Berners-Lee developed a simpler way for researchers to share information over the Internet, a concept he called the World Wide Web . [4] This invention became the catalyst for the growth of the Internet as a way for businesses to share information about themselves. As web browsers and Internet connections became the norm, companies rushed to grab domain names and create websites.

The digital world also became a more dangerous place as virtually all companies connected to the Internet. Computer viruses and worms, once slowly propagated through the sharing of computer disks, could now grow with tremendous speed via the Internet. Software and operating systems written for a standalone world found it very difficult to defend against these sorts of threats. A whole new industry of computer and Internet security arose. Information security will be discussed in Chapter 6.

As the world recovered from the dot-com bust, the use of technology in business continued to evolve at a frantic pace. Websites became interactive. Instead of just visiting a site to find out about a business and then purchase its products, customers wanted to be able to customize their experience and interact online with the business. This new type of interactive website, where you did not have to know how to create a web page or do any programming in order to put information online, became known as Web 2.0. This new stage of the Web was exemplified by blogging, social networking, and interactive comments being available on many websites. The new Web 2.0 world, in which online interaction became expected, had a major impact on many businesses and even whole industries. Many bookstores found themselves relegated to a niche status. Video rental chains and travel agencies simply began going out of business as they were replaced by online technologies. The newspaper industry saw a huge drop in circulation with some cities such as New Orleans no longer able to support a daily newspaper. Disintermediation is the process of technology replacing a middleman in a transaction. Web 2.0 allowed users to get information and news online, reducing dependence of physical books and newspapers.

As the world became more connected, new questions arose. Should access to the Internet be considered a right? Is it legal to copy a song that had been downloaded from the Internet? Can information entered into a website be kept private? What information is acceptable to collect from children? Technology moved so fast that policymakers did not have enough time to enact appropriate laws. Ethical issues surrounding information systems will be covered in Chapter 12.

The Post-PC World, Sort of

Ray Ozzie, a technology visionary at Microsoft, stated in 2012 that computing was moving into a phase he called the post-PC world. [5] Now six years later that prediction has not stood up very well to reality. As you will read in Chapter 13, PC sales have dropped slightly in recent years while there has been a precipitous decline in tablet sales. Smartphone sales have accelerated, due largely to their mobility and ease of operation. Just as the mainframe before it, the PC will continue to play a key role in business, but its role will be somewhat diminished as people emphasize mobility as a central feature of technology. Cloud computing provides users with mobile access to data and applications, making the PC more of a part of the communications channel rather than a repository of programs and information. Innovation in the development of technology and communications will continue to move businesses forward.

Can Information Systems Bring Competitive Advantage?

It has always been the assumption that the implementation of information systems will bring a business competitive advantage. If installing one computer to manage inventory can make a company more efficient, then it can be expected that installing several computers can improve business processes and efficiency.

In 2003, Nicholas Carr wrote an article in the Harvard Business Review  that questioned this assumption. Entitled “I.T. Doesn’t Matter.” Carr was concerned that information technology had become just a commodity. Instead of viewing technology as an investment that will make a company stand out, Carr said technology would become as common as electricity – something to be managed to reduce costs, ensure that it is always running, and be as risk-free as possible.

The article was both hailed and scorned. Can I.T. bring a competitive advantage to an organization? It sure did for Walmart (see sidebar). Technology and competitive advantage will be discussed in Chapter 7.

Sidebar: Walmart Uses Information Systems to Become the World’s Leading Retailer

Walmart is the world’s largest retailer, earn  8.1 billion for the fiscal year that ended on January 31, 2018. Walmart currently serves over 260 million customers every week worldwide through its 11,700 stores in 28 countries. [6] In 2018 Fortune magazine for the sixth straight year ranked Walmart the number one company for annual revenue as they again exceeded $500 billion in annual sales. The next closest company, Exxon, had less than half of Walmart’s total revenue. [7] Walmart’s rise to prominence is due in large part to making information systems a high priority, especially in their Supply Chain Management (SCM) system known as Retail Link. ing $14.3 billion on sales of $30

This system, unique when initially implemented in the mid-1980s, allowed Walmart’s suppliers to directly access the inventory levels and sales information of their products at any of Walmart’s more than eleven thousand stores. Using Retail Link, suppliers can analyze how well their products are selling at one or more Walmart stores with a range of reporting options. Further, Walmart requires the suppliers to use Retail Link to manage their own inventory levels. If a supplier feels that their products are selling out too quickly, they can use Retail Link to petition Walmart to raise the inventory levels for their products. This has essentially allowed Walmart to “hire” thousands of product managers, all of whom have a vested interest in the products they are managing. This revolutionary approach to managing inventory has allowed Walmart to continue to drive prices down and respond to market forces quickly.

Today Walmart continues to innovate with information technology. Using its tremendous market presence, any technology that Walmart requires its suppliers to implement immediately becomes a business standard. For example, in 1983 Walmart became the first large retailer to require suppliers to the use Uniform Product Code (UPC) labels on all products. Clearly, Walmart has learned how to use I.T. to gain a competitive advantage.

In this chapter you have been introduced to the concept of information systems. Several definitions focused on the main components: technology, people, and process. You saw how the business use of information systems has evolved over the years, from the use of large mainframe computers for number crunching, through the introduction of the PC and networks, all the way to the era of mobile computing. During each of these phases, new innovations in software and technology allowed businesses to integrate technology more deeply into their organizations.

Virtually every company uses information systems which leads to the question: Does information systems bring a competitive advantage? In the final analysis the goal of this book is to help you understand the importance of information systems in making an organization more competitive. Your challenge is to understand the key components of an information system and how it can be used to bring a competitive advantage to every organization you will serve in your career.

Study Questions

• What are the five major components that make up an information system?
• List the three examples of information system hardware?
• Microsoft Windows is an example of which component of information systems?
• What is application software?
• What roles do people play in information systems?
• What is the definition of a process?
• What was invented first, the personal computer or the Internet?
• In what year were restrictions on commercial use of the Internet first lifted?
• What is Carr’s main argument about information technology?
• Suppose that you had to explain to a friend the concept of an information system. How would you define it? Write a one-paragraph description  in your own words  that you feel would best describe an information system to your friends or family.
• Of the five primary components of an information system (hardware, software, data, people, process), which do you think is the most important to the success of a business organization? Write a one-paragraph answer to this question that includes an example from your personal experience to support your answer.
• Everyone interacts with various information systems every day: at the grocery store, at work, at school, even in our cars. Make a list of the different information systems you interact with daily. Can you identify the technologies, people, and processes involved in making these systems work.
• Do you agree that we are in a post-PC stage in the evolution of information systems? Do some original research and cite it as you make your prediction about what business computing will look like in the next generation.
• The Walmart sidebar introduced you to how information systems was used to make them the world’s leading retailer. Walmart has continued to innovate and is still looked to as a leader in the use of technology. Do some original research and write a one-page report detailing a new technology that Walmart has recently implemented or is pioneering.
• Examine your PC. Using a four column table format identify and record the following information: 1st column: Program name, 2nd column: software manufacturer, 3rd column: software version, 4th column: software type (editor/word processor, spreadsheet, database, etc.).
• Examine your mobile phone. Create another four column table similar to the one in Lab #1. This time identify the apps, then record the requested information.
• In this chapter you read about the evolution of computing from mainframe computers to PCs and on to smartphones. Create a four column table and record the following information about your own electronic devices: 1st column – Type: PC or smartphone, 2nd column – Operating system including version, 3rd column – Storage capacity, 4th column – Storage available.
• Laudon, K.C. and Laudon, J. P. (2014) Management Information Systems , thirteenth edition. Upper Saddle River, New Jersey: Pearson.
• Valacich, J. and Schneider, C. (2010). Information Systems Today – Managing in the Digital World , fourth edition. Upper Saddle River, New Jersey: Prentice-Hall.
• Laudon, K.C. and Laudon, J. P. (2012). Management Information Systems , twelfth edition. Upper Saddle River, New Jersey: Prentice-Hall.
• CERN . (n.d.) The Birth of the Web. Retrieved from http://public.web.cern.ch/public/en/about/web-en.html
• Marquis, J. (2012, July 16) What is the Post-PC World? Online Universities.com. Retrieved from https://www.onlineuniversities.com/blog/2012/07/what-post-pc-world/
• Walmart . (n.d.) 2017 Annual Report. Retrieved from http://s2.q4cdn.com/056532643/files/doc_financials/2017/Annual/WMT_2017_AR-(1).pdf
• McCoy, K. (2018, May 21). Big Winners in Fortune 500 List. USA Today . Retrieved from http://https://www.usatoday.com/story/money/2018/05/21/big-winners-fortune-500-list-walmart-exxon-mobil-amazon/628003002/

Information Systems for Business and Beyond (2019) by David Bourgeois is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License , except where otherwise noted.

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Chapter 10. Case Study: Student Information System

Introduction.

IT projects are not limited to organizations with IT departments. They also exist in small nonprofits such as Deep Thought Academy—a small, nonprofit, private school. Deep Thought Academy enrolls children from preschool through eighth grade and boasts small class sizes that allow personalized instruction for all students. This case study describes how Deep Thought Academy sought to use a purchased product to help them address issues they had with enrollment and communication.

The school tries to keep the students up-to-date with respect to technology, including a curriculum that relies heavily on the use of laptops and tablets. The technology used for the running of the ...

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Integrating case study and survey research methods: an example in information systems

• Original Article
• Published: 01 January 1994
• Volume 3 , pages 112–126, ( 1994 )

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• G.G. Gable 1  

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The case for combining research methods generally, and more specifically that for combining qualitative and quantitative methods, is strong. Yet, research designs that extensively integrate both fieldwork (e.g. case studies) and survey research are rare. Moreover, some journals tend tacitly to specialise by methodology thereby encouraging purity of method. The multi-method model of research, while not new, has not been appreciated. In this respect it is useful to describe its usage through example. By reference to a recently completed study of IS consultant engagement success factors this paper presents an analysis of the benefits of integrating case study and survey research methods. The emphasis is on the qualitative case study method and how it can complement more quantitative survey research. Benefits are demonstrated through specific examples from the reference study.

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Evidence-Based Survey Operations: Choosing and Mixing Modes

Systems Research Reporting

Using Multi-Informant Designs to Address Key Informant and Common Method Bias

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Department of Information Systems and Computer Science, National University of Singapore, 0511 Singapore

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Gable, G. Integrating case study and survey research methods: an example in information systems. Eur J Inf Syst 3 , 112–126 (1994). https://doi.org/10.1057/ejis.1994.12

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Home » Management Case Studies » Case Study on MIS: Information System in Restaurant

Case Study on MIS: Information System in Restaurant

Case Summary:

A waiter takes an order at a table, and then enters it online via one of the six terminals located in the restaurant dining room. The order is routed to a printer in the appropriate preparation area: the cold item printer if it is a salad , the hot-item printer if it is a hot sandwich or the bar printer if it is a drink . A customer’s meal check-listing (bill) the items ordered and the respective prices are automatically generated. This ordering system eliminates the old three-carbon-copy guest check system as well as any problems caused by a waiter’s handwriting. When the kitchen runs out of a food item, the cooks send out an ‘out of stock’ message, which will be displayed on the dining room terminals when waiters try to order that item. This gives the waiters faster feedback, enabling them to give better service to the customers. Other system features aid management in the planning and control of their restaurant business. The system provides up-to-the-minute information on the food items ordered and breaks out percentages showing sales of each item versus total sales. This helps management plan menus according to customers’ tastes. The system also compares the weekly sales totals versus food costs, allowing planning for tighter cost controls. In addition, whenever an order is voided, the reasons for the void are keyed in. This may help later in management decisions, especially if the voids consistently related to food or service. Acceptance of the system by the users is exceptionally high since the waiters and waitresses were involved in the selection and design process. All potential users were asked to give their impressions and ideas about the various systems available before one was chosen.

• In the light of the system, describe the decisions to be made in the area of strategic planning , managerial control and operational control? What information would you require to make such decisions?
• What would make the system a more complete MIS rather than just doing transaction processing?
• Explain the probable effects that making the system more formal would have on the customers and the management.

Solution of Management Information System in Restaurant Case Study:

1. A management information system (MIS) is an organized combination of people, hardware, communication networks and data sources that collects, transforms and distributes information in an organization. An MIS helps decision making by providing timely, relevant and accurate information to managers. The physical components of an MIS include hardware, software, database, personnel and procedures.

Management information is an important input for efficient performance of various managerial functions at different organization levels. The information system facilitates decision making. Management functions include planning, controlling and decision making. Decision making is the core of management and aims at selecting the best alternative to achieve an objective. The decisions may be strategic, tactical or technical. Strategic decisions are characterized by uncertainty. They are future oriented and relate directly to planning activity. Tactical decisions cover both planning and controlling. Technical decisions pertain to implementation of specific tasks through appropriate technology. Sales region analysis, cost analysis, annual budgeting, and relocation analysis are examples of decision-support systems and management information systems.

There are 3 areas in the organization. They are strategic, managerial and operational control.

Strategic decisions are characterized by uncertainty. The decisions to be made in the area of strategic planning are future oriented and relate directly to planning activity. Here basically planning for future that is budgets, target markets, policies, objectives etc. is done. This is basically a top level where up-to-the minute information on the food items ordered and breaks out percentages showing sales of each item versus total sales is provided. The top level where strategic planning is done compares the weekly sales totals versus food costs, allowing planning for tighter cost controls. Executive support systems function at the strategic level, support unstructured decision making, and use advanced graphics and communications. Examples of executive support systems include sales trend forecasting, operating plan development, budget forecasting , profit planning , and manpower planning .

The decisions to be made in the area of managerial control are largely dependent upon the information available to the decision makers. It is basically a middle level where planning of menus is done and whenever an order is voided, the reasons for the void are keyed in which later helps in management decisions, especially if the voids are related to food or service. The managerial control that is middle level also gets customer feedback and is responsible for customer satisfaction.

The decisions to be made in the area of operational control pertain to implementation of specific tasks through appropriate technology. This is basically a lower level where the waiter takes the order and enters it online via one of the six terminals located in the restaurant dining room and the order is routed to a printer in the appropriate preparation area. The item’s ordered list and the respective prices are automatically generated. The cooks send ‘out of stock’ message when the kitchen runs out of a food item, which is basically displayed on the dining room terminals when waiter tries to order that item. This basically gives the waiters faster feedback, enabling them to give better service to the customers. Transaction processing systems function at the operational level of the organization. Examples of transaction processing systems include order tracking, order processing, machine control, plant scheduling, compensation, and securities trading.

The information required to make such decision must be such that it highlights the trouble spots and shows the interconnections with the other functions. It must summarize all information relating to the span of control of the manager. The information required to make these decisions can be strategic, tactical or operational information.

Advantages of an online computer system:

• Eliminates carbon copies
• Waiters’ handwriting issues
• Out-of-stock message
• Faster feedback, helps waiters to service the customers

Advantages to management:

• Sales figures and percentages item-wise
• Helps in planning the menu
• Cost accounting details

2. If the management provides sufficient incentive for efficiency and results to their customers, it would make the system a more complete MIS and so the MIS should support this culture by providing such information which will aid the promotion of efficiency in the management services and operational system. It is also necessary to study the keys to successful Executive Information System (EIS) development and operation. Decision support systems would also make the system a complete MIS as it constitutes a class of computer-based information systems including knowledge-based systems that support decision-making activities. DSSs serve the management level of the organization and help to take decisions, which may be rapidly changing and not easily specified in advance.

Improving personal efficiency, expediting problem solving (speed up the progress of problems solving in an organization), facilitating interpersonal communication, promoting learning and training, increasing organizational control, generating new evidence in support of a decision, creating a competitive advantage over competition, encouraging exploration and discovery on the part of the decision maker, revealing new approaches to thinking about the problem space and helping automate the managerial processes would make the system a complete MIS rather than just doing transaction processing.

3. The management system should be an open system and MIS should be so designed that it highlights the critical business, operational, technological and environmental changes to the concerned level in the management, so that the action can be taken to correct the situation. To make the system a success, knowledge will have to be formalized so that machines worldwide have a shared and common understanding of the information provided. The systems developed will have to be able to handle enormous amounts of information very fast.

An organization operates in an ever-increasing competitive, global environment. Operating in a global environment requires an organization to focus on the efficient execution of its processes, customer service, and speed to market. To accomplish these goals, the organization must exchange valuable information across different functions, levels, and business units. By making the system more formal, the organization can more efficiently exchange information among its functional areas, business units, suppliers, and customers.

As the transactions are taking place every day, the system stores all the data which can be used later on when the hotel is in need of some financial help from financial institutes or banks. As the inventory is always entered into the system, any frauds can be easily taken care of and if anything goes missing then it can be detected through the system.

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• Case Study: Management Information System at Dell
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• Data storage in Management Information Systems (MIS)
• Role and Impact of Management Information Systems (MIS) in an Organization
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• Case Study on Information Systems: Cisco Systems
• Case Study of FedEx: Leveraging Information Technology to Grow Business
• Concept of Management Information Systems (MIS)

5 thoughts on “ Case Study on MIS: Information System in Restaurant ”

please give me solution of case study urgent.

Just read the post thoroughly, you’ll find the solution there.

Please I have a similar case study. Can you help me with the solutions

A small company has for some years being using a manual system for processing of billing, payment of creditors and payroll system. The company is considering purchasing a computer on which it will run these application and others that it will develop in the near future. You have been asked to prepare a report on the implication of this proposed course of action.

1. Identify and describe six major issues which would be considered in an investigation of the feasibility of the proposal. 2. Suggest the outline structure of the report.

In fact am much impressed with your trend and solution layout. Thanks

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