1 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning INFORMATION SYSTEMS: AN OVERVIEW CHAPTER 1 Hossein BIDGOLI MIS Cambios en este color por el prof. José Díaz Caballero

2 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning 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

3 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning 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.) Chapter 1 Information Systems: An Overview

4 MIS, Chapter 1 ©2011 Course Technology, a part of 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

5 MIS, Chapter 1 ©2011 Course Technology, a part of 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 sect Many organizations use information systems to gain a competitive advantage

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

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

8 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning Chapter 1 Information Systems: An Overview 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

9 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning Chapter 1 Information Systems: An Overview 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

10 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning Chapter 1 Information Systems: An Overview 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

11 MIS, Chapter 1 ©2011 Course Technology, a part of 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)

12 MIS, Chapter 1 ©2011 Course Technology, a part of 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

13 MIS, Chapter 1 ©2011 Course Technology, a part of 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

14 MIS, Chapter 1 ©2011 Course Technology, a part of 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 and the Internet is public

15 MIS, Chapter 1 ©2011 Course Technology, a part of 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

16 MIS, Chapter 1 ©2011 Course Technology, a part of 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

17 MIS, Chapter 1 ©2011 Course Technology, a part of 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

18 MIS, Chapter 1 ©2011 Course Technology, a part of 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

19 MIS, Chapter 1 ©2011 Course Technology, a part of 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

20 MIS, Chapter 1 ©2011 Course Technology, a part of 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

21 MIS, Chapter 1 ©2011 Course Technology, a part of 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

22 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning Exhibit 1.4 The Five Forces Model

23 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning Chapter 1 Information Systems: An Overview Porter’s Five Forces Model: Understanding the Business Environment (cont'd.) 1.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 2.Supplier power –High when customers have fewer options –Low when customers have more options –Use information systems to make their products and services cheaper

24 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning Chapter 1 Information Systems: An Overview Porter’s Five Forces Model: Understanding the Business Environment (cont'd.) 3.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 4.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

25 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning Chapter 1 Information Systems: An Overview Porter’s Five Forces Model: Understanding the Business Environment (cont'd.) 5.Rivalry among existing competitors –High when many competitors occupy the same marketplace position –Low when there are few competitors

26 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning 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

27 MIS, Chapter 1 ©2011 Course Technology, a part of Cengage Learning 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

28 MIS, Chapter 1 ©2011 Course Technology, a part of 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