INFORMATION SYSTEMS: AN OVERVIEW

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©2011 Course Technology, a part of 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 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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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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Major Components of an Information System

• Data• Database• Process• Information

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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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Using Information Systems and Information Technologies

• Information technologies– Achieve goals of information systems

• Examples– Internet– Databases– POS Systems– RFID tags

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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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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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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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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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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

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INFORMATION SYSTEMS: AN OVERVIEW