information systems: an overview

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©2014, Cengage Learning

INFORMATION SYSTEMS: AN OVERVIEW

CHAPTER 1

Hossein BIDGOLI

MIS

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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.

LO4 Define management information systems.

LO5 Describe the four major components of an information system.

LO6 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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LO7 Explain the importance and applications of information systems in functional areas of a business.

LO8 Discuss how information technologies are used to gain a competitive advantage.

LO9 Explain the Five Forces Model and strategies for gaining a competitive advantage.

L1O Review the IT job market.

L11 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”: Used interchangeably

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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 sectors• Many organizations use information

systems to gain a competitive advantage

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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 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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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 / 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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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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• 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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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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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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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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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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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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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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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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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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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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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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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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Manager of Information Systems Services

• Responsible for managing:– Hardware– Software– Personnel within the information systems

department

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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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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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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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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

information systems: an overview

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