chapter 1 - introduction to mis

Management Information SystemsManagement Information SystemsMANAGING THE DIGITAL FIRM, 12TH EDITION

INFORMATION SYSTEMS IN BUSINESS TODAY

Chapter 1

Management Information SystemsManagement Information SystemsCHAPTER 1: INFORMATION IN BUSINESS SYSTEMS TODAY

• Understanding the effects of information systems on business and their relationship to globalization.

• Explain why information systems are so essential in business today.

• Define an information system and describe its management, organization, and technology components.

Learning Objectives

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• Define complementary assets and explain how they ensure that information systems provide genuine value to an organization.

Learning Objectives (cont.)


Where is the emphasis?Where should it be?

Information Technology

Information Technology

The stress should be on the ‘I’ rather than the ‘T’ in ‘IT’ (Davenport, 2000).

Peter Drucker stressed the importance of information to organisational competitiveness in 1993 when he wrote:

‘The industries that have moved into the center of the economy in the last forty years, have as their business, the production and distribution of knowledge and information rather than the production and distribution of things’.

What is data?

• Data are raw facts or observations that are considered to have little or no value until they have been processed and transformed into information.

• Example definitions:(a) a series of non-random symbols, numbers, values or

words;(b) a series of facts obtained by observation or research

and recorded;(c) a collection of non-random facts;(d) the record of an event or fact.

What is information?

• Information: Data that have been processed so that they are meaningful.

• Example definitions:(a) data that have been processed so that they are

meaningful;(b) data that have been processed for a purpose;(c) data that have been interpreted and understood

by the recipient.

Transforming data into information using a data process

Information – summary

• Information:• Involves transforming data using a defined process;• involves placing data in some form of meaningful

context;• Is produced in response to an information need and

therefore serves a specific purpose;• Helps reduce uncertainty, thereby improving decision

behavior.

Types of information processing

Activity 1.1 – data versus information

• Which of the following might be examples of information? Which might be examples of data?– (a) the date– (b) a bank statement– (c) the number 1355.76– (d) a National Insurance number– (e) a balance sheet– (f) a bus timetable– (g) a car registration plate– (h) your grade in a course– (i) employees who were late this month (list)– (j) number of sold items of certain products by region

• Development and use of information systems that help businesses achieve their goals and objectives.

• Computer-based information system

What is MIS?

Hardware—desktops, laptops, PDAs Software—operating systems, application programs Data—facts and figures entered into computers Procedures—how the other four components are used People—users, technologists, IS support

What is MIS?

Five Components of an Information System

Development• Information systems are built for business professionals (you) to

use.• You need to take an active role in specifying system requirements

and in managing development projects to ensure that the system meets your needs and the organization’s needs.

Use• You need to learn how to use to accomplish your goals.• You have responsibilities for protecting security of system and

data.• You have responsibilities for backing up data.• You will help in recover systems and data.

Development and Use of Information Systems

• Businesses themselves do not “do” anything.

• People within a business sell, buy, design, produce, finance, market, account, and manage.

• Information systems exist to help people in business achieve the goals and objectives of that business.

== IS goal is to leverage human being capabilities.

Achieving Business Goals and Objectives

Video of salesforce.com

• Five components interact with each other to create a complete system.

Actors—hardware and people take actions Instructions—software and procedures provide

instructions for actors Bridges—data bridges hardware/software and

people/procedures

How Can You Use the Five-Component Framework?

How Can You Use the Five-Component Framework?

• Low-tech IS Consists only of a file of email addresses and an

email program. Only small amount of work moved from the

human side to computer side. Considerable human work is required to

determine when to send which emails to which customers.

High-Tech vs. Low-Tech Information Systems

• High-tech IS Customer support system keeps track of

equipment customers have, maintenance schedules for equipment, and automatically generates email reminders to customers.

More work has been moved from human side to computer side.

Computer is providing more services on behalf of humans.


• Low-tech—using an email program and its addresses is low-tech because just a small amount of work is being accomplished by a computer system.

• High-tech—implementing a customer support system is high-tech because a large amount of work is being accomplished by the computer system rather than humans.

• Determining factor is amount of work that is moved from human side to computer side.


Ask questions• What new hardware will you need?

• What programs will you need to license?

• What databases and other data must you create?

• What procedures will need to be developed for both use and administration of the information system?

• What will be the impact of the new technology on people? Which jobs will change? Who will need training? How will the new technology affect morale? Will you need to hire new people? Will you need to reorganize?

Understanding the Scope of New Information Systems

Five IS components evaluated based on order of ease of change and amount of organizational disruption.

1. Hardware is simple to order and install.

2. Obtaining or developing new programs is more difficult.

3. Creating new databases or changing structure of existing databases is more difficult.

4. Changing procedures, requiring people to work in new ways, is even more difficult.

5. Changing personnel responsibilities and reporting relationships and hiring and terminating employees are both very difficult and very disruptive.

Components Ordered by Difficulty and Disruption

• Information technology (IT) pertains to things you buy: Hardware Software Data components

• Things you can buy or lease: Products Methods Inventions Standards (obtain predesigned procedures)

• Information technology drives the development of new information systems.

Difference Between Information Technology and Information Systems?

• Information Systems (IS) include five components: Hardware Software Data Procedures People

• New systems—always have training tasks (and costs), employees resistance to change to overcome, and need to manage employees as they utilize the new system.

You can buy IT, you cannot buy IS.

Difference Between Information Technology and Information Systems?


• How information systems are transforming business– Increase in wireless technology use, Web sites– Increased business use of Web 2.0 technologies– Cloud computing, mobile digital platform allow more

distributed work, decision-making, and collaboration

• Globalization opportunities– Internet has drastically reduced costs of operating on

global scale– Presents both challenges and opportunities

The Role of Information Systems in Business Today



• In the emerging, fully digital firm– Significant business relationships are digitally

enabled and mediated– Core business processes are accomplished through

digital networks– Key corporate assets are managed digitally

• Digital firms offer greater flexibility in organization and management– Time shifting, space shifting



Management Information SystemsManagement Information Systems

Read the Interactive Session and discuss the following questions

CHAPTER 1: INFORMATION IN BUSINESS SYSTEMS TODAY

• What are the advantages of using mobile handheld devices? What are the disadvantages?

• What features are needed in a mobile to make it a business solution?

• What business functions can be performed by using handhelds alone? How have other companies utilized handhelds?


MIS IN YOUR POCKET



• Growing interdependence between ability to use information technology and ability to implement corporate strategies and achieve corporate goals

• Business firms invest heavily in information systems to achieve six strategic business objectives:1. Operational excellence2. New products, services, and business models3. Customer and supplier intimacy4. Improved decision making5. Competitive advantage6. Survival




• Operational excellence:– Improvement of efficiency to attain higher

profitability– Information systems, technology an

important tool in achieving greater efficiency and productivity

– Walmart’s RetailLink system links suppliers to stores for superior replenishment system




• New products, services, and business models:– Business model: describes how company

produces, delivers, and sells product or service to create wealth

– Information systems and technology a major enabling tool for new products, services, business models• Examples: Apple’s iPod, iTunes, iPhone, iPad,

Google’s Android OS.




• Customer and supplier intimacy:– Serving customers well leads to customers

returning, which raises revenues and profits• Example: High-end hotels that use computers to

track customer preferences and use to monitor and customize environment

– Intimacy with suppliers allows them to provide vital inputs, which lowers costs• Example: J.C.Penney’s information system which

links sales records to contract manufacturer




• Improved decision making– Without accurate information:

• Managers must use forecasts, best guesses, luck• Leads to:

– Overproduction, underproduction of goods and services– Misallocation of resources– Poor response times

• Poor outcomes raise costs, lose customers– Example: Verizon’s Web-based digital dashboard to

provide managers with real-time data on customer complaints, network performance, line outages, etc.




• Operational excellence:– Improvement of efficiency to attain higher profitability

• New products, services, and business models:– Enabled by technology

• Customer and supplier intimacy:– Serving customers raises revenues and profits– Better communication with suppliers lowers costs

• Improved decision making– More accurate data leads to better decisions




• Competitive advantage– Delivering better performance

– Charging less for superior products

– Responding to customers and suppliers in real time

– Examples: Apple, Walmart, UPS




• Survival– Information technologies as necessity of business– May be:

• Industry-level changes, e.g. Citibank’s introduction of ATMs

• Governmental regulations requiring record-keeping

– Examples: Toxic Substances Control Act, Sarbanes-Oxley Act




• Information system: – Set of interrelated components – Collect, process, store, and distribute information– Support decision making, coordination, and control

Perspectives on Information Systems



Management Information SystemsManagement Information SystemsChapter 1 Information Systems in Global Business TodayChapter 1 Information Systems in Global Business Today

An information system contains information about an organization and its surrounding environment. Three basic activities—input, processing, and output—produce the information organizations need. Feedback is output returned to appropriate people or activities in the organization to evaluate and refine the input. Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory agencies, interact with the organization and its information systems.

Functions of an Information SystemFunctions of an Information System



Information Systems Are More Than Computers

Using information systems effectively requires an understanding of the •organization,•management, and•information technology shaping the systems. An information system creates value for the firm as an organizational and management solution to challenges posed by the environment.



• Organizational dimension of information systems– Hierarchy of authority, responsibility

• Senior management• Middle management• Operational management• Knowledge workers• Data workers• Production or service workers




• Organizational dimension of information systems (cont.)– Separation of business functions

• Sales and marketing• Human resources• Finance and accounting• Manufacturing and production

– Unique business processes– Unique business culture– Organizational politics




• Management dimension of information systems– Managers set organizational strategy for

responding to business challenges– In addition, managers must act creatively:

• Creation of new products and services• Occasionally re-creating the organization




• Technology dimension of information systems– Computer hardware and software– Data management technology– Networking and telecommunications technology

• Networks, the Internet, intranets and extranets, World Wide Web

– IT infrastructure: provides platform that system is built on




• Investing in information technology does not guarantee good returns

• Considerable variation in the returns firms receive from systems investments

• Factors: – Adopting the right business model– Investing in complementary assets

(organizational and management capital)




• Complementary assets: – Assets required to derive value from a

primary investment– Firms supporting technology investments

with investment in complementary assets receive superior returns

– E.g.: invest in technology and the people to make it work properly



• The main aim of the science of MIS is to “leverage human being

capabilities”, on the other hand, some see that depending a lot

on IS will result in replacing human beings inside the

organization with systems that don’t mistake and don’t get

tired!!

• Which of the views do you support? Explain your answer?! How

important are employees in relation to IS?!

Individual homework

chapter 1 - introduction to mis

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