INFORMATION SYSTEMS: AN OVERVIEW - Wikispacesmrkpinedahau.wikispaces.com/file/view/Chapter1+-+Information... · 6/21/2013 1 MIS, Chapter 1 1 ©2011 Course Technology, a part of Cengage

6/21/2013

1

1MIS, Chapter 1

©2011 Course Technology, a part of Cengage Learning

INFORMATION SYSTEMS:

AN OVERVIEW

CHAPTER 1

Hossein BIDGOLI

MIS

2MIS, Chapter 1


Chapter 1 Information Systems: An Overview

LO1 Discuss common applications of computers and

information systems.

LO2 Explain the differences between computer literacy

and information literacy.

LO3 Define transaction processing systems and

management information systems.

LO4 Describe the four major components of an

information system.

LO5 Discuss 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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LO6 Explain the importance and applications of

information systems in functional areas of a business.

LO7 Discuss how information technologies are used to

gain a competitive advantage.

LO8 Explain the Five Forces Model and strategies for

gaining a competitive advantage.

LO9 Summarize the future outlook of information

systems.

l e a r n i n g o u t c o m e s (cont’d.)


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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”

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TJX Companies, Inc.: Credit Card Breach

• January 2007

• Identity thieves stole more than 46.5 million credit cards

– Used sophisticated hacking techniques to break through security systems

– Stored the stolen information on servers in Eastern Europe and the United States

• Shows the international nature of cybercrime

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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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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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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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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 sect

• Many organizations use information systems to gain a competitive advantage

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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

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Major Components of an Information System

• Data

• Database

• Process

• Information

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Exhibit 1.3 Major components of an information system

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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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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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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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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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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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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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Using Information Systems and Information

Technologies

• Information technologies

– Achieve goals of information systems

• Examples

– Internet

– Databases

– POS Systems

– RFID tags

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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

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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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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

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• 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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• 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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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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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

• RetailLink

• Electronic data interchange

• RFID technologies

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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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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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Advantage (cont'd.)

• Differentiation strategies

– Make products and services different from competitors

– Examples: Apple, Amazon.com

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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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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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Exhibit 1.4 The Five Forces Model

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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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• 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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• Rivalry among existing competitors

– High when many competitors occupy the same marketplace position

– Low when there are few competitors

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Information Technology at Boeing

• Intelligent information systems

– Artificial intelligence technologies

– Expert systems

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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

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Future Outlooks (cont'd.)

• Internet growth and acceptance will continue

• Computer criminals will become more sophisticated

– Protecting personal identity information will become more difficult

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Information Technologies at Charles Schwab

• First discount brokerage to offer automated, around-the-clock phone service

• Internet

• Wired and wireless networks

• Automated data centers

• Comprehensive sales system

• Customer information system

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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

Documents

INFORMATION SYSTEMS: AN OVERVIEW - Wikispacesmrkpinedahau.wikispaces.com/file/view/Chapter1+-+Information... · 6/21/2013 1 MIS, Chapter 1 1 ©2011 Course Technology, a part of Cengage