Chapter 1 Business Driven Technology Chapter 1: Management Information Systems: Business Driven MIS The focus of this course is to examine business initiatives and how technology supports those initiatives. Business initiatives should drive technology choices. What you will find in this text is that the text first addresses business needs and then addresses the technology that supports those needs. My goal in this course is to teach core fundamental concepts, but not specific technologies. Core fundamental concepts tend to remain the same, or get better. The specific technologies used are constantly changing. MANGT 366 Information Technology for Business

Class Focus this semester Business Driven Technology Business initiatives should drive technology choices Business needs first: technology supports those needs Core business fundamentals are constant or get better: technology changes Business Intelligence How do we acquire it? How do we use it? What do we do with it? Defined: A broad category of applications and technologies for gathering, storing, analyzing and providing access to data to help users make D decision making Also referred to as Management 665 Bus Intel/Data Mng and DB Mktg

Information Technology’s Role in Business Information technology is Many students enter this class asking: Why do I/we need to study information technology? Information is everywhere in business. Information is a strategic asset that is being created, stored, bought and sold. Without information, an organization can’t operate, or operate effectively. Information technology is everywhere in business, and understanding how information technology impacts business and business operations is important to those learning about business. Pictured are two business magazine. Fortune and Business Week. The yellow Post-it Notes are used to mark each page that contains either a technology-related article or a technology-related advertisement. As you can see, these magazines are full of technology-related items. You can find technology-related items in what I read, which is the Wall Street Journal. The picture above says it all – technology is everywhere in business. These are business magazines, not technology magazines, and yet they are filled with technology The goal of this course is to help you understand the business side of technology.

Information Technology’s Impact on Business Operations So, you might be asking yourself, what exactly is information technology’s impact on business operations, and what business functions receive the greatest benefits from using information technology? The greatest benefit probably comes in the area of customer service, closely followed by financing functions and sales and marketing functions. Customer service: click-to-talk, call scripting, auto answering, call centers Finance: accounting packages, systems used to meet and comply with the provisions found in the Sarbanes Oxley Act. Sales and marketing: campaign management, customer relationship management Operations: supply chain management Human resources: software to track employees at risk of leaving

Information Technology’s Impact on Business Operations Organizations are typically organized and operate by or functional silos While you might think these are independent, they are actually because they require information from They do not exist To be successful in business, you need to gain an understanding of how businesses function and what the different parts of a business do. Think about the different classes that you take or are required to take. Typically you think of each one in isolation. What you do in one does not seem to have any impact in what happens in another class. This is kinda like how people view business. We tend to think about business areas by the function they perform, and what happens in one area is independent from other areas. This is thought of as organization by functional silo. How often have you thought: I don’t need to learn about this other stuff. It is not part of my major. In reality, each of the business functional areas is interdependent, meaning that each area relies on other functional areas in order to work effectively and be successful. Why are functional areas interdependent? Departments cannot operate in isolation, they require information from around the organization to operate Lets examine sales and marketing, along with operations. Sales must understand information from operations to understand inventory, place orders, calculate transportation costs and know what product is going to be available (and when) based on production schedules. Do we have any items that are either overstocked or understocked? For an organization to succeed, every department and functional area must work together and share common information. We can’t have business silos.

Information Technology (IT) In order to be successful in business, you must understand Using IT and/or spending lots of money on IT will not equal business success. IT is used to of people IT by itself does not get the job done. IT is only useful if the right people know and effectively. IT is (and if you don’t know how to use the tool, then you won’t be successful) In order to be successful in business, you must understand how to use information technology and how you can use it to innovate. However, spending large amounts of money on information technology will not guarantee an organization to automatically be successful. Information technology is most useful when it leverages the talents of people. The key is for organizations to allocate resources on the right types of IT that correctly support their business operations to be successful. The right people have to know how to use and manage information technology for it to enable organization success. Just having IT (and spending money on it) will not be enough. That is why you are studying IT, along with learning about accounting, finance, marketing, management and operations management.

The function of the IT department is to get In order for this to happen, it is important to understand Data, information and business intelligence IT resources IT cultures Information technology is and if you want to be successful in business, you need to understand technology. The function of the IT department is to get people, technologies and procedures to worth together to solve business problems. In order for this to happen, it is important to understand 1. The difference between data, information and business intelligence, and the role each of those plays in today’s organizations. 2. IT resources 3. The IT culture of an organization. What types of sharing of information occurs in the organization and how is it is used to help out others.

Data R the characteristic of an event Data recording sales events in an Excel Spreadsheet If you are building a system to track students, data might include: Height, name, hair color, sex, major, course grade, etc. If you are building a system to track inventory, data might include: Chair manufacturer, chair color, chair size Point out to students that each column represents data that has no meaning without interpretation Sales Rep – just a name Product Name – just a name Quantity – just a number Profit – just a number Without analyzing the data it is just a bunch of names and numbers Without analyzing the data, it is just a

One person’s information might be (store manager vs CEO) Data is information Data turned into information By analyzing the data we can start to understand the information that the data is telling us. The above figure displays all chicken orders. You can see all of the customers who placed chicken orders, and in this case, you can see the sales rep for all of these customers was Roberta Cross. If you were tracking students, information would include such items as: The student to professor ratio, the percentage of marketing majors who are female, the average percentage of students who took the course. If you were tracking inventory, information would include such items as: The number of chairs required for students in each class, the average number of chairs needed to be replaced each semester. What is information in one circumstance might be data in another circumstance. What is considered information to a store manager would be considered data to a CEO. One person’s information might be (store manager vs CEO)

You can analyze that data even further by to gain help us gain a better understanding of our data and information: primary business analysis tool

Business Intelligence The analysis of data and information from to gain a impacting your business Analyze Attempt to determine P analytics (develop models to predict behavior) Used in business decision-making (Data Analytics) These multiple sources include: Suppliers Customers Competitors Business partners Data from industry Data from governmental sources Manipulate multiple variables from multiple sources (sometimes even manipulate hundreds of variables) to of the data. Having information is nice. Having Business Intelligence is even better. Business Intelligence is taking the data and information, analyzing it to gain a comprehensive picture of the factors that impact your business, and then using it as part of business decision-making. Business Intelligence entails understanding the environment that your business is operating in and the factors that impact your operations. By using analysis we can determine all kinds of business intelligence from who is our best customer to who is our best sales representative and what is our best selling product. Advanced analytical tools, such as Excel pivot tables, uncover business intelligence in data. Ask your students what they could do with this information? How can BI help run a business?

IT Resources P use Information technology I The single most important resource in any organization is . Your greatest asset is your (your ability to think). Information technology (IT) is simply a that helps you IT in and of itself is not useful unless the right people know how to use and manage it efficiently and effectively People, information, and information technology (in that order of priority) are inextricably linked If one fails, they all fail

Important IT Skills for Functional Areas Accounting Accounting Information Systems S D and Management Web Research Network Management E software Database Management Web sites and web portals Finance S Modeling S Analysis to identify and measure risk. Database Management Web sites and Search Engines Marketing C Management S Software ( ) Database Management, Data Communications software and desktop publishing Obviously, Information Technology is everywhere in business, and to be successful in business, you must understand information technology. Operations Management Advanced Statistical techniques and advanced spreadsheet modeling Scheduling software, software, software

The following slides are details related to the prior slide The following slides are details related to the prior slide. I won’t specifically talk about these details in class, but you do need to study them because they provide additional information related to the specific IT skills that are typically needed for employees in the various business functional areas

Accounting Accounting Information Systems: almost all accounting systems are computerized. Database Management: Accounting information is stored in databases and that info. is used to create accounting reports. Database Design: In order to audit accounting systems, accountants must understand the design of the database and be able to follow transactions through the system. Web Research: Accountants frequently consult rules and regulations available on the Internet: must be able to rapidly search for and apply information found. Network Security: Knowledge of a company’s computer systems and networks is required to assure the security of a company’s information. Spreadsheet modeling: financial projections and analyses require extensive use of electronic spreadsheets and accountants must be very skilled in the use of spreadsheets.

Finance Spreadsheet modeling : advanced knowledge is essential as you forecast cash flows and evaluate changes in assumptions. Statistical Packages and Statistical Analysis: Used to help decision makers identify and measure project risk. Database Management: Must be able to create, maintain and manipulate financial measures stored in a database. Internet Sites and Web Portals: Corporations use web sites to provide investors with company information. Automated bill paying impacts both accounts receivable and accounts payable. Search Engines: Must be able to accurately and efficiently gather required business information from external sources. Must understand the technological strategy and technological innovation being used in the industry. For example, what are banks doing?

Marketing Must understand the use of Customer Relationship Management (CRM) software and how it can be used to manage relationships with customers. Must understand Budget Analysis/Impact Software and Spreadsheet Software: Used to evaluate financial feasibility of new products and services, as well as advertising and promotion strategies. Must be able to run “What If” scenarios. Database Management: Marketers work with vast amount of information that is stored in databases, and you must know how that information is organized and how it can be accessed. Data Warehouses and Data-Mining Tools provide a way to summarize large amounts of information and understand it from a different perspective. Must be able to extract information from a data warehouse and be able to analyze it. Must be able to work with communications support software, including email and contact management software. Must be familiar with desktop publishing software which is often used to create marketing materials.

Management Must understand the role of Enterprise Resource Planning Systems (ERP) and how ERP systems promote the corporate-wide sharing and communication of information. Managers use spreadsheets to calculate value, display financial information and work with numbers. The information used by managers and the people that they supervise can be found in databases. Internet Sites and Web Portals: Corporations use web sites to display and access information, as well as link employees, recruiters and other institutions. One of the new areas of business is Electronic Commerce, and managers must understand the potential of information technology and the skills needed to be successful in business-to-business and business-to-consumer electronic commerce.

Production and Operations Management For most careers in POM, a detailed knowledge of statistical tools and techniques is essential. Advanced decision support spreadsheet functions, such as goal seeking, optimization, and statistical tools, provides support for many POM careers. A knowledge of Supply Chain Management Systems allows a person to work with each department of a company, integrating solutions to maximize customer value. Must have an understanding of Material Requirements Planning Software (part of ERP) and how the business operates from beginning to end and how to optimally model those operations. Must be able to use scheduling software to optimally schedule business resources (people, plant equipment, transportation modes, manufacturing operations). Must be proficient in the use of Data-Mining Tools and other statistical techniques in order to be able to find relationships in the information contained within data warehouses.