MIS CHAPTER 1 INFORMATION SYSTEMS AN OVERVIEW Hossein

MIS CHAPTER 1 INFORMATION SYSTEMS: AN OVERVIEW Hossein BIDGOLI MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 1

Chapter 1 Information Systems: An Overview learning outcomes LO 1 Discuss common applications of computers and information systems. LO 2 Explain the differences between computer literacy and information literacy. LO 3 LO 4 LO 5 Define transaction processing systems. LO 6 Discuss the differences between data and information. Define management information systems. Describe the four major components of an information system. MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 2

Chapter 1 Information Systems: An Overview l e a r n i n g o u t c o m e s (cont’d. ) LO 7 Explain the importance and applications of information systems in functional areas of a business. LO 8 Discuss how information technologies are used to gain a competitive advantage. LO 9 Explain the Five Forces Model and strategies for gaining a competitive advantage. LO 10 Review the IT job market LO 11 Summarize the future outlook of information systems. MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 3

Chapter 1 Information Systems: An Overview Computers and Information Systems in Daily Life • Computers and information systems are all around you – – – Online classes Grading Grocery and retail PDA and smartphones Internet • “Information systems” versus “information technology” MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 4

Chapter 1 Information Systems: An Overview A New Era of Marketing: You. Tube is a popular video sharing service that can be used as a marketing tool. The following are examples of corporations that are using You. Tube to promote their products and services: • Quiksilver • Ford Models • University of Phoenix Online • The Home Depot • Nikefootball MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 5

Chapter 1 Information Systems: An Overview Computer Literacy and Information Literacy • Computer literacy – Having skills in using productivity software • Information literacy – Understanding the role of information in generating and using business intelligence • Business intelligence (BI) – Provides historical, current, and predictive views of business operations and environments – Gives organizations a competitive advantage in the marketplace MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 6

Chapter 1 Information Systems: An Overview Social Networking and the Vulnerability of Personal Information To reduce risk and improve the privacy of your personal information, consider the following: • Always use the privacy controls offered by the social networking sites • Use long passwords • Do not post a phone number or a full address • Do not post children’s names • Do not be specific when posting information about vacations or business trips MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 7

Chapter 1 Information Systems: An Overview The Beginning: Transaction Processing Systems • Transaction processing systems (TPSs) – – Focus on data collection and processing Cost reduction Operations repetitive Human involvement minimal MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 8

Chapter 1 Information Systems: An Overview Management Information Systems • Management information system (MIS) – Organized integration of hardware and software technologies, data, processes, and human elements – Designed to produce timely, integrated, relevant, accurate, and useful information • For decision-making purposes • Include: – Hardware components – MIS software – Processes MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 9

Chapter 1 Information Systems: An Overview Management Information Systems (cont’d. ) • Designing an MIS – Define objectives – Collect and analyze data – Provide information in useful format • Used in both the private and public sector • Many organizations use information systems to gain a competitive advantage MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 10

Chapter 1 Information Systems: An Overview Information Technology at Hertz Car Rental Company • Mainframe-based decision support system (DSS) • Executive information system (EIS) – Analyze essential information from both external and internal sources – Manipulate and refine data to make it more meaningful MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 11

Chapter 1 Information Systems: An Overview Major Components of an Information System • • Database Process Information MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 12

Exhibit 1. 3 MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning Major Components of an Information System 13

Chapter 1 Information Systems: An Overview Data • Data – Input to the system • Sources of data – External – Internal • Time orientation • Can be collected in different forms – Aggregated – Disaggregated MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 14

Chapter 1 Information Systems: An Overview Database • Database – Heart of an information system – Collection of all relevant data organized in a series of integrated files • Essential for the success of any information system • Managed with database management system (DBMS): e. g. , Oracle • Reduces personnel time needed to gather, process, and interpret data manually MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 15

Chapter 1 Information Systems: An Overview Process • Process – Generates the most useful type of information for decision making • Generally includes transaction-processing reports and models for decision analysis • Includes a wide range of models to support all levels of decision making MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 16

Chapter 1 Information Systems: An Overview Information • Information – Output of an information system – Facts that have been analyzed by the process component • Quality of information – – Timeliness Integration with other data and information Consistency and accuracy Relevance MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 17

Chapter 1 Information Systems: An Overview Information (cont’d. ) • User interface – Must be flexible and easy to use – Graphical user interfaces (GUIs) • Ultimate goal of an information system – Generate business intelligence (BI) MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 18

Chapter 1 Information Systems: An Overview Examples of Information Systems • Example 1: a university – State university stores all student data in a database – Built-in query capability – Other types of analysis can be done • Example 2: Teletech – International textile company – Database stores data on products, suppliers, sales personnel, costs – Process components – Forecasting models MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 19

Chapter 1 Information Systems: An Overview Using Information Systems and Information Technologies • Information technologies – Achieve goals of information systems • Examples – – Internet Databases POS Systems RFID tags MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 20

Chapter 1 Information Systems: An Overview Information Technologies at Home Depot • POS system – Fast customer service – Improved inventory management • Wireless network – Efficient in-store communication • Web site – Communicate with customers – Increase sales with online orders • RFID tags – Better manage inventory MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 21

Chapter 1 Information Systems: An Overview The Importance of Information Systems • Information – Second most important resource in any organization • Four Ms of resources: – – Manpower Machinery Materials Money MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 22

Chapter 1 Information Systems: An Overview The Importance of Information Systems (cont’d. ) • Personnel information system (PIS) or human resource information system (HRIS) – Designed to provide information that helps decision makers in personnel carry out their tasks more effectively – Use Web technologies • Main difference between an intranet and the Internet – Intranets are private and the Internet is public MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 23

Chapter 1 Information Systems: An Overview The Importance of Information Systems (cont’d. ) • Logistics information system (LIS) – Designed to reduce the cost of transporting materials – Maintains safe and reliable delivery • Manufacturing information system (MFIS) – Manages manufacturing resources – Companies can reduce manufacturing costs, increase product quality, and improve inventory decisions MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 24

Chapter 1 Information Systems: An Overview The Importance of Information Systems (cont’d. ) • Financial information system (FIS) – Provides information to financial executives in a timely manner • Marketing information system (MKIS) – Improves marketing decisions – Provides timely, accurate, and integrated information about the marketing mix MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 25

Chapter 1 Information Systems: An Overview Information Technologies at UPS • UPS Delivery Intercept – Web-based service that allows customers to intercept and reroute packages before they are delivered • Package Flow Technology MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 26

Chapter 1 Information Systems: An Overview Wal-Mart Stores, Inc. • Wal-Mart Satellite Network – Largest private satellite communication system in the United States – Links branch stores with the home office in Bentonville, Arkansas • • POS systems Retail. Link Electronic data interchange RFID technologies MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 27

Chapter 1 Information Systems: An Overview Using Information Technologies for a Competitive Advantage • Michael Porter – Professor at Harvard Business School – Identified three strategies for competing in the marketplace successfully • Overall cost leadership • Differentiation • Focus MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 28

Chapter 1 Information Systems: An Overview Using Information Technologies for a Competitive Advantage (cont’d. ) • Information systems – Help organizations reduce the cost of products and services – Assist with differentiation and focus strategies – Can help bottom-line and top-line strategies • Enterprise systems – – Supply chain management (SCM) Customer relationship management (CRM) Enterprise resource planning (ERP) Collaboration software MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 29

Chapter 1 Information Systems: An Overview Using Information Technologies for a Competitive Advantage (cont'd. ) • Differentiation strategies – Make products and services different from competitors – Examples: Apple, Amazon. com MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 30

Chapter 1 Information Systems: An Overview Using Information Technologies for a Competitive Advantage (cont'd. ) • Focus strategies – Concentrate on a specific market segment – Attempt to achieve a cost or differentiation advantage – Examples: Apple, Abercrombie & Fitch, Nordstrom MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 31

Chapter 1 Information Systems: An Overview Porter’s Five Forces Model: Understanding the Business Environment • Five Forces Model – Michael Porter – For analyzing an organization, its position in the marketplace, and how information systems could be used to make it more competitive – Buyer power – Supplier power – Threat of substitute products or services – Threat of new entrants – Rivalry among existing competitors MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 32

Exhibit 1. 4 MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning The Five Forces Model 33

Chapter 1 Information Systems: An Overview Porter’s Five Forces Model: Understanding the Business Environment (cont'd. ) • Buyer power – High when customers have many choices – Low when they have few choices – Limit buyers’ choices by offering services that make it difficult for customers to switch • Supplier power – High when customers have fewer options – Low when customers have more options – Use information systems to make their products and services cheaper MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 34

Chapter 1 Information Systems: An Overview Porter’s Five Forces Model: Understanding the Business Environment (cont'd. ) • Threat of substitute products or services – High when many alternatives for an organization’s products or services are available – Add services to make organization more distinct – Add fees to discourage customers from switching • Threat of new entrants – Low when duplicating a company’s product or service is difficult – Use focus strategies to ensure that this threat remains low MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 35

Chapter 1 Information Systems: An Overview Porter’s Five Forces Model: Understanding the Business Environment (cont'd. ) • Rivalry among existing competitors – High when many competitors occupy the same marketplace position – Low when there are few competitors MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 36

Chapter 1 Information Systems: An Overview Information Technology at Boeing • Intelligent information systems – Artificial intelligence technologies – Expert systems MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 37

Chapter 1 Information Systems: An Overview The IT Job Market IT jobs fall into the following categories: • Operations and help desk • Programming • Systems design • Web design and Web hosting • Network design and maintenance • Database design and maintenance • Robotics and artificial intelligence MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 38

Chapter 1 Information Systems: An Overview The IT Job Market (cont'd. ) CTO/CIO • The top job in the information systems field belongs to either the chief technology officer (CTO) or the chief information officer (CIO) • This person is responsible for long-range information systems planning and for keeping abreast of new developments in the field that can affect a company's productivity or competitiveness MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 39

Chapter 1 Information Systems: An Overview The IT Job Market (cont'd. ) Manager of Information Systems Services This person is responsible for managing all the hardware, software, and personnel within the information systems department MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 40

Chapter 1 Information Systems: An Overview The IT Job Market (cont'd. ) Systems Analyst • This person is responsible for the design and implementation of information systems • In addition to computer knowledge and an information systems background, this position also requires a thorough understanding of business systems and functional areas within a business organization MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 41

Chapter 1 Information Systems: An Overview The IT Job Market (cont'd. ) Network Administrator • This person oversees a company's internal and external network systems, designing and implementing network systems that deliver correct information to the right decision-maker in a timely manner • Providing network and cybersecurity is part of this position’s responsibility MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 42

Chapter 1 Information Systems: An Overview The IT Job Market (cont'd. ) Database Administrator • A database administrator (DBA) is responsible for database design and implementation • Additionally, a database administrator should have knowledge and understanding of data warehouses and data mining tools MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 43

Chapter 1 Information Systems: An Overview The IT Job Market (cont'd. ) Computer Programmer • A computer programmer writes computer programs or software pieces that allow the information system to perform a specific task • There are many computer languages available, and each one requires a specific knowledge suitable for a specific application MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 44

Chapter 1 Information Systems: An Overview The IT Job Market (cont'd. ) Webmaster • A webmaster designs and maintains the organization’s Web site • Because of the popularity of e-commerce applications, webmasters have been in high demand MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 45

Chapter 1 Information Systems: An Overview Requirements for IT Positions • The educational backgrounds for an IT position can include an AA, BS, MS, or MBA in information systems and related fields • The salaries vary based on educational background, experience, and the job’s location • Salaries range from $52, 000 for a programmer to over $180, 000 for a CIO MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 46

Chapter 1 Information Systems: An Overview Future Outlooks • Hardware and software costs continue to decline – Processing information less expensive in the future • Artificial intelligence and related technologies will continue to improve and expand • Computer literacy will improve • Networking technology will improve • Personal computers will continue to improve in power and quality MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 47

Chapter 1 Information Systems: An Overview Future Outlooks (cont'd. ) • Internet growth and acceptance will continue • Computer criminals will become more sophisticated – Protecting personal identity information will become more difficult MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 48

Chapter 1 Information Systems: An Overview Summary • Examples of uses for computers and information systems • Difference between computer literacy and information literacy • Management information system (MIS) – Data, database, process, and information • Porter – Three competitive strategies – Five Forces Model MIS, Chapter 1 © 2011 Course Technology, a part of Cengage Learning 49