Introduction to Information Systems

Yong ChoiBPA

CSUB

An Information System (IS) is interrelated components to collect, process, store and distribute information to support mainly decision makings in an organization.

Information technology (IT) describes the combination of computer technology (hardware and software) with telecommunications technology (data, image, and voice networks).

CBIS vs. Manual IS

What is an Information System?

Information Age◦ Bill Gates (how much rich?), List of GDP◦ Major TANGIBLE product of Microsoft◦ Information age phenomena

Population of “facebook.com” : 800 million active user

US: 310 million

Why study MIS?

Find a job or business that complies with rules of information age….

Structured◦ small independent travel agencies ◦ Routine & Repetitive◦ Problems are predictable◦ Problems can be solved by applying standard

solutions

Why study MIS? (con’t)

Sarbanes-Oxley Act of 2002◦ Mandates strict reforms to improve financial

disclosures from corporations and prevent accounting fraud (such as WorldCom).

Section 409 – Requires disclosure to the public on a

“rapid and current” basis of material changes in an organization’s financial condition.

impossible w/o MIS

Why study MIS? (con’t)

Fierce competitors to AT&T and Sprint Used to have:

◦ 88,000 employees◦ 60,000 miles of telephone lines around the world◦ Revenue of $40 billion

Collapsed because of the accounting fraud◦ $11 billion◦ One of the biggest (second: Lehman Brothers, ENRON)

A main trigger◦ Simple: failure integration of four different billing DB

Kaiser: Northern, CA and Southern, CA

WorldCom scandal

1) Globalization (Nike Corporation)◦ Global management thru IS

2) Organizational Change◦ Less traditional middle management : collect,

process, store and distribute information for various decision makings

◦ Cross functional (project based – virtual team or organization)

Why study MIS? (con’t)

$490 – credit card number and PIN $147 – driver’s license number $147 – birth certificate $6 – PayPal logon and password $78-$294 – billing data including account

number, address, birth date, etc

Downside of information age

Post information age IBM Watson MOOC: massive open online course

◦ Udacity◦ khan Academy

What’s ahead?

Functions of an information system

Background of MIS

SOCIOLOGY

POLITICAL SCIENCE

PSYCHOLOGY

COMPUTER

SCIENCE OPERATIONS

RESEARCH

MANAGEMENT

SCIENCE

MIS

TECHNICAL

BEHAVIORAL

Definition of competitive advantage◦ Competitive advantage is a significant benefit

(ideally long term) to a business over its competitors because of the quality or superiority of products or services which will persuade customers to buy from them rather than from competitors.

Initiative # 1: Cost leadership◦ Achieve competitive advantage by providing lower

cost than competitors◦ Wal-Mart: Always Low Price (read this article!):

lower price using computerized purchasing and inventory system

Competitive Advantage Thru MIS

Initiative # 2: Differentiation◦ Achieve competitive advantage by providing more

unique and value added products/services than competitors

◦ First ATM system by Citibank Initiative # 3: Focus (Cost leadership +

Differentiation)◦ Achieve competitive advantage by providing

lower cost + unique and value added products/services

◦ Amazon.com (others: SW, DVD, games and extra value added information for each product)

Competitive Advantage Thru MIS

Initiative #4: Enhance products and services◦ First Online Order Tracking system by FedEx

Initiative #5: Create new products and services◦ E*Trade.com

Competitive Advantage Thru MIS

IS can be easily copied by competitors. IS can bring on litigation or regulation

◦ SABRE by AA: first computer-based online reservation system.

◦ Monopolization of the entire market by monopolizing information

Bad timing ◦ on-line home banking in the early 1980s by

chemical bank Fail to integrate system: WorldCom

Risks of IS or IS success

Monitor competitors IS usage Monitor change of government regulations Review competitor’s web sites

◦ Information about new products and projects◦ Trend in budgeting (e.g., annual report)◦ Advertising strategies

Analyze competitor’s newsgroup on the Internet◦ Newsgroup participants discuss what they like or dislike

about competitor’s products or services

Manager’s job in information age