7795919_2.ppt chapter one information systems an overview

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MIS, Chapter 1
©2014, Cengage Learning
INFORMATION SYSTEMS:
AN OVERVIEW
CHAPTER 1
Hossein BIDGOLI
MIS

2. 2
MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
LO1Discuss common applications of computers and
information systems.
LO2Explain the differences between computer literacy
and information literacy.
LO3Define transaction processing systems.
LO4Define management information systems.
LO5Describe the four major components of an
information system.
LO6Discuss the differences between data and
information.
l e a r n i n g o u t c o m e s

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MIS, Chapter 1
©2014, Cengage Learning
LO7Explain the importance and applications of
information systems in functional areas of a
business.
LO8Discuss how information technologies are used to
gain a competitive advantage.
LO9Explain the Five Forces Model and strategies for
gaining a competitive advantage.
L1O Review the IT job market.
L11Summarize the future outlook of information
systems.
l e a r n i n g o u t c o m e s (cont’d.)
Chapter 1 Information Systems: An Overview

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MIS, Chapter 1
©2014, Cengage Learning
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”: Used interchangeably

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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 sectors
•Many organizations use information systems to
gain a competitive advantage

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MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
Major Components of an Information System
•Data
•Database
•Process
•Information

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MIS, Chapter 1
©2014, Cengage Learning
Exhibit 1.3 Major components of an information system

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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)

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
Information Technologies at The 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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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 / Internet is public

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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)
–Improve marketing decisions
–Provide timely, accurate, and integrated information
about the marketing mix

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
Information Technologies at Walmart
•Walmart Satellite Network
–Largest private satellite communication system in the
United States
–Links branch stores with the home office in
Bentonville, Arkansas
•POS systems
•RetailLink
•Electronic data interchange
•RFID technologies

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
Exhibit 1.4 The Five Forces Model

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
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 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

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MIS, Chapter 1
©2014, Cengage Learning
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

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MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
The IT Job Market
•One of the fastest growing segments in the
economy
•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

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MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
CTO/CIO
•Top information systems job belongs to the chief
technology officer (CTO) / chief information
officer (CIO)
–Oversees long-range planning
–Keeps an eye on new developments that can affect a
company’s success
•Also chief privacy officer (CPO)
–Responsibility for managing risks and business
impacts of privacy laws and policies

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MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
Manager of Information Systems Services
•Responsible for managing:
–Hardware
–Software
–Personnel within the information systems department

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MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
Systems Analyst
•Responsible for:
–Design and implementation of information systems
•Requires:
–Computer knowledge
–Information systems background
–Thorough understanding of business systems and
functional areas within a business organization

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MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
Outlook for the Future
•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

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MIS, Chapter 1
©2014, Cengage Learning
Chapter 1 Information Systems: An Overview
Outlook for the Future (cont'd.)
•Internet growth will continue
•Computer criminals will become more
sophisticated
–Protecting personal identity information will become
more difficult

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MIS, Chapter 1
©2014, Cengage Learning
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