The Importance of MIS David Kroenke Using MIS 3e Chapter 1 The Importance of MIS David Kroenke

Chapter Preview We’ll begin this book by discussing the key skills that Jennifer (and you) need and explain why this course is the single best course in all of the business school for teaching you those key skills. You may find that last statement surprising. If you are like most students, you have no clear idea of what your MIS class will be about. If someone were to ask you, “What do you study in that class?” you might respond that the class has something to do with computers and maybe computer programming. Beyond that, you might be hard-pressed to say more. You might add, “Well, it has something to do with computers in business,” or maybe, “We are going to learn to solve business problems with computers using spreadsheets and other programs.” So, how could this course be the most important one in the business school? We begin with that question. After you understand how important this class will be to your career, we will discuss fundamental concepts. We’ll wrap up with some practice on one of the key skills you need to learn.

Opening Scenario: Fired? Why? Jennifer gets fired from FlexTime after four months on job. Her job was to find ways to increase revenues. She only followed orders, did not show self initiative. Did not become a team member. Did not collaborate with others. Did not understand business process concepts. Being reliable, hard working, honest, and having integrity is important, but today they’re not enough.

Study Questions Q1. Why is Introduction to MIS the most important class in the business school? Q2. What is MIS? Q3. How can you use the five-component model? Q4. What is information? Q5. What makes some information better than other information? Q6. What is the difference between information technology and information systems? Q7. 2020?

Introduction to MIS the Most Important Class in the Business School? Ultimate reason: Moore’s Law Moore’s Law (1965) “The number of transistors per square inch on an integrated chip doubles every 18 months.” Statement commonly misunderstood to be: “The speed of a computer doubles every 18 months,” which is incorrect, but captures the sense of principle.

Ratio of Price to Performance of Computers

Because of Moore’s Law Cost of data communications and data storage is essentially zero What happens when costs are essentially zero? YouTube iPhone Facebook Second Life HuLu Twitter LinkedIn

Are There Cost Effective Business Applications of Facebook and Twitter? Fitness instructors post announcements via Twitter that participants follow. FlexTime studio collects those tweets and posts them on its Facebook page. Total cost to FlexTime studio? Zero. How do you compute the benefit-cost ratio when the cost is zero?

First Reason Introduction MIS Most Important Future business professionals need to be able to assess, evaluate, and apply emerging information technology to business. You need the knowledge of this course to attain that skill.

Second Reason Introduction MIS Most Important The only job security that exists is “a marketable skill and the courage to use it.” Because cost of data storage and data communications is essentially zero, any routine skill can and will be outsourced to the lowest bidder.

Third Reason Introduction MIS Most Important “Rapid technological change and increased international competition place the spotlight on the skills and preparation of the workforce, particularly the ability to adapt to changing technology and shifting demand. Shifts in the nature of organizations…favor strong nonroutine cognitive skills.”(Lynn A Kaoly and Constantijn W.A. Panis, The 21st Century at Work. RAND Corporation, 2004, p. xiv) What are your marketable skills?

Examples of Critical Skills for Nonroutine Cognition Figure 1-2 here (new)

Experimenting in this Course You will be asked to use products with which you have no familiarity. It might be Microsoft Excel or Access, or features and functions of Blackboard you have not used. You may be asked to collaborate using Microsoft SharePoint or Google Docs & Spreadsheets. Will your instructor explain and show every feature of those products that you’ll need? You should hope not. You should hope your instructor will leave it up to you to experiment, to envision new possibilities on your own, and experiment with those possibilities, consistent with the time you have available.

Bottom Line of this Course It will give you the background you need to assess, evaluate, and apply emerging information systems technology to business. It can give you the ultimate in job security— marketable skills—by helping you learn abstraction, systems thinking, collaboration, and experimentation. With that introduction, let’s get started! Welcome aboard.

Study Questions Q2. What is MIS? Q1. Why is Introduction to MIS the most important class in the business school? Q2. What is MIS? Q3. How can you use the five-component model? Q4. What is information? Q5. What makes some information better than other information? Q6. What is the difference between information technology and information systems? Q7. 2020?

What is MIS? Development and use of information systems that help businesses achieve their goals and objectives. Computer-based information system (video)

Figure 1-3 Five Components of an Information System What is MIS? Information systems components (video link) Hardware—desktops, laptops, PDAs Software—operating systems, application programs Data—facts and figures entered into computers Procedures—how the other four components are used People—users, technologists, IS support Figure 1-3 Five Components of an Information System

Development and Use of Information Systems Information systems are built for business professionals (you) to use. You need to take an active role in specifying system requirements and in managing development projects to ensure that the system meets your needs and the organization’s needs. Use You need to learn how to use to accomplish your goals. You have responsibilities for protecting security of system and data. You have responsibilities for backing up data. You will help in recover systems and data.

Achieving Business Goals and Objectives Businesses themselves do not “do” anything. People within a business sell, buy, design, produce, finance, market, account, and manage. Information systems exist to help people in business achieve the goals and objectives of that business.

Achieving Business Goals and Objectives “Every other has a Facebook presence” is the wrong reason for developing an information system. Not asking right questions, such as: “What is the purpose of our Facebook page?” “What is it going to do for us?” “Is Facebook the best choice?” “Should we be using Microsoft Vine, instead?” “Are the costs of maintaining the page sufficiently offset by the benefits?”

Study Questions Q3. How can you use the five-component model? Q1. Why is Introduction to MIS the most important class in the business school? Q2. What is MIS? Q3. How can you use the five-component model? Q4. What is information? Q5. What makes some information better than other information? Q6. What is the difference between information technology and information systems? Q7. 2020?

How Can You Use the Five-Component Framework? Five components interact with each other to create a complete system. Actors—hardware and people take actions Instructions—software and procedures provide instructions for actors Bridges—data bridges hardware/software and people/procedures

How Can You Use the Five-Component Framework? Figure 1-3 Characteristics of the Five Components

The Most Important Component—YOU [Video] You are part of every information system that you use. Even if you have the perfect information system, if you do not know what to do with the information that it produces, you are wasting your time and money. Your quality of thinking is a large part of the quality of an information system. Substantial cognitive research has shown that you cannot increase your basic IQ. You can dramatically increase the quality of your thinking by changing the way you have programmed your brain to work.

High-Tech vs. Low-Tech Information Systems Low-tech IS Consists only of a file of email addresses and an email program. Only small amount of work moved from the human side to computer side. Considerable human work is required to determine when to send which emails to which customers.

High-Tech vs. Low-Tech Information Systems High-tech IS Customer support system keeps track of equipment customers have, maintenance schedules for equipment, and automatically generates email reminders to customers. More work has been moved from human side to computer side. Computer is providing more services on behalf of humans.

High-Tech vs. Low-Tech Information Systems Low-tech—using an email program and its addresses is low-tech because just a small amount of work is being accomplished by a computer system. High-tech—implementing a customer support system is high-tech because a large amount of work is being accomplished by the computer system rather than humans. Determining factor is amount of work that is moved from human side to computer side.

Understanding the Scope of New Information Systems Ask questions What new hardware will you need? What programs will you need to license? What databases and other data must you create? What procedures will need to be developed for both use and administration of the information system? What will be the impact of the new technology on people? Which jobs will change? Who will need training? How will the new technology affect morale? Will you need to hire new people? Will you need to reorganize?

Components Ordered by Difficulty and Disruption Five IS components evaluated based on order of ease of change and amount of organizational disruption. Hardware is simple to order and install. Obtaining or developing new programs is more difficult. Creating new databases or changing structure of existing databases is more difficult. Changing procedures, requiring people to work in new ways, is even more difficult. Changing personnel responsibilities and reporting relationships and hiring and terminating employees are both very difficult and very disruptive.

Study Questions Q4. What is information? Q1. Why is Introduction to MIS the most important class in the business school? Q2. What is MIS? Q3. How can you use the five-component model? Q4. What is information? Q5. What makes some information better than other information? Q6. What is the difference between information technology and information systems? Q7. 2020?

Definitions Vary Information system—an assembly of hardware, software, data, procedures, and people that interact to produce information. Various definitions of information: Knowledge derived from data (most common) Data presented in a meaningful context Data processed by summing, ordering, averaging, grouping, comparing, or other similar operations A difference that makes a difference Any of these definitions will do. Choose one definition that makes sense to you and the situation. Important point is to discriminate between data and information.

Information is Subjective Meaningful context varies: Information in one person’s context is just a data point in another person’s context because what may be important to you may not hold the same level of importance to someone else. Context changes occur in information systems when output from one system is input to another system (Figure 1-5). Data in a manufacturing system may be very important to that system. When it’s combined with data from other systems, it may lose its prominence in the larger context.

Context Change Process Figure 1-5

Study Questions Q1. Why is Introduction to MIS the most important class in the business school? Q2. What is MIS? Q3. How can you use the five-component model? Q4. What is information? Q5. What makes some information better than other information? Q6. What is the difference between information technology and information systems? Q7. 2020?

Characteristics of Good Information Figure 1-6 here

What Makes Some Information Better than Other Information? Accurate—correct and complete data, and processed correctly. Accuracy is crucial; managers must be able to rely on results of their information systems. Timely—produced in time for its intended use. Relevant—both to the context and to the subject. Just barely sufficient—for purpose for which it is generated. Avoid information overload. Worth its cost—appropriate relationship between cost of information and its value.

Study Questions Q1. Why is Introduction to MIS the most important class in the business school? Q2. What is MIS? Q3. How can you use the five-component model? Q4. What is information? Q5. What makes some information better than other information? Q6. What is the difference between information technology and information systems? Q7. 2020?

Difference Between Information Technology and Information Systems? Information technology (IT) pertains to things you buy: Hardware Software Data components Things you can buy or lease: Products Methods Inventions Standards (obtain predesigned procedures) Information technology drives the development of new information systems.

Difference Between Information Technology and Information Systems? Information Systems (IS) include five components: Hardware Software Data Procedures People New systems—always have training tasks (and costs), employees resistance to change to overcome, and need to manage employees as they utilize the new system. You can buy IT, you cannot buy IS.

Study Questions Q1. Why is Introduction to MIS the most important class in the business school? Q2. What is MIS? Q3. How can you use the five-component model? Q4. What is information? Q5. What makes some information better than other information? Q6. What is the difference between information technology and information systems? Q7. 2020?

Take a Guess at Technology in the Year 2020 Computers won’t look like computers Kindle (now) The Future of Computers Most products networked to computers College textbooks? Who will be the big winners? College classrooms and campuses? Think about it—who are the winners and the losers in the computers-in-most-products era?

Guide: Ethics of Misdirected Information Use Situation A: Suppose you overhear a confidential conversation from which you could get information that would give you advantage in real estate negotiations. Should you listen? Do you use that information?

Guide: Ethics of Misdirected Information Use Situation B: Suppose you receive that same information in an email. Perhaps an administrative assistant at the agent’s office confuses you and the other customer and mistakenly sends you the terms of the other party’s offer. Do you read that email? If so, do you use the information that you read to your advantage?

Guide: Ethics of Misdirected Information Use Situation C: Suppose you sell computer software. In the midst of a sensitive price negotiation, your customer accidentally sends you an internal email that contains the maximum amount that the customer can pay for your software. Do you read that email? Do you use that information to guide your negotiating strategy? If your customer discovers that the email may have reached you and asks, “Did you read my email?” how do you answer?

Guide: Ethics of Misdirected Information Use Situation D: Suppose a friend mistakenly sends you an email that contains sensitive personal medical data. Further, suppose you read the email before you know what you’re reading and you’re embarrassed to learn something very personal that truly is none of your business. Your friend asks you, “Did you read that email?” How do you respond?

Guide: Ethics of Misdirected Information Use Situation E: Suppose you work as a network administrator and your position allows you unrestricted access to the mailing lists for your company. Assume that you have the skill to insert your email address into any company mailing list without anyone knowing about it. You insert your address into several lists and begin to receive confidential email that no one intended for you to see. One of those emails indicates that your best friend’s department is about to be eliminated and all of its personnel fired. Do you forewarn your friend?

Ethics Guide: Understanding Perspectives and Points of View Every human being speaks and acts from the perspective of a personal point of view. A “problem” is defined as a “perceived difference between what is and what ought to be.” An information system development team must have common definition and understanding of the problem in order to communicate with each other. What can a development team do to create common definitions and understandings? Figure 1-6 Computer Price/Performance Ratio Decreases

Ethics Guide: Understanding Perspectives and Points of View Suppose you buy a new laptop and it fails within a few days. Repeated calls to customer support produces short-term fixes, but your problem continues. Three plausible reasons for the problem: Customer service does not have data about prior customer contacts. Customer support recommended a solution that did not work. Company is shipping too many defective laptops.

Ethics Guide: Understanding Perspectives and Points of View What happens if you are meeting with three people who have three different views concerning a customer support problem? Q: How would they behave? Q: Which thinking style would lead to a more productive meeting? Why? When you enter the business world, being able to discern and adapt to the perspectives and goals of those with whom you work will make you much more effective.

Guide: Passwords and Password Etiquette Characteristics of a strong password: Has seven or more characters Does not contain your user name, real name, or company name Does not contain a complete dictionary word, in any language Is different from previous passwords you have used Contains both upper and lowercase letters, numbers, and special characters (such as ~ ! @; # $ % ^ &; * ( ) _ +; - =; { } | [ ] \ : “ ; ’ <; >; ? , ./) Examples of good passwords are: Qw37^T1bb?at 3B47qq<3>5!7b

Guide: Passwords and Password Etiquette Remembering Passwords Base them on first letter of the words in a phrase Examples: Iwba3:00AMiR,NY (“I was born at 3:00 A.M. in Rome, New York”)

Guide: Passwords and Password Etiquette Proper password etiquette: mark of a professional Never write down your password, and do not share it with others. Never ask someone else for his password. Never give your password to someone else. Enter your password yourself. What if you need someone else’s password? Offer your keyboard to them, and look away while she enters her password.

Active Review Q1. Why is Introduction to MIS the most important class in the business school? Q2. What is MIS? Q3. How can you use the five-component model? Q4. What is information? Q5. What makes some information better than other information? Q6. What is the difference between information technology and information systems? Q7. 2020?

Case Study 1: Requirements Creep at the IRS (Video) IRS processes over 200 million tax returns from more than 180 million individuals and more than 45 million businesses. Employs more than 100,000 people in over 1,000 different sites. Adapts to more than 200 tax law changes and services more than 23 million telephone calls each year. Using information systems designed and developed in 1960s. Business System Modernization (BSM) project that would replace antiquated system with modern technology and capabilities started mid-1990s. By 2003, project was a disaster after billions of dollars spent on project, all major components of the new system are months or years behind schedule.

Requirements Creep at the IRS Causes of failure: Inadequate business unit ownership and sponsorship of projects, which resulted in unrealistic business cases and continuous project scope “creep”. Lack of desired environment of trust, confidence, and teamwork between the IRS business units, the BSM organization, the Information Technology Services (ITS), and primary contractor, Computer Sciences Corporation. This resulted in an inefficient working environment and, at times, finger pointing when problems arose.

Requirements Creep at the IRS Recommendations: “The IRS business units must take direct leadership and ownership of the Modernization program and each of its projects. In particular, this must include defining the scope of each project, preparing realistic and attainable business cases, and controlling scope changes throughout each project’s life cycle….” “Create an environment of trust, confidence, and teamwork between the business units, the BSM and ITS organizations, and the Prime….”

Requirements Creep at the IRS In 2004, IRS hired Richard Spires to take over and manage the BSM project. Facilitated a turnaround in BSM project and was subsequently appointed Chief Information Officer, the senior IT person at the IRS. Spires left the IRS in 2008. Not publicly known what specific steps Spires took to affect this turnaround. What is known is that because of the initial mistake of not involving users in specification of requirements and the feasibility of potential solutions, the IRS endured a 10-year delay and billions of dollars of cost overruns.

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