Lecture Business driven information systems (4/e): Chapter 1 - Paige Baltzan

Chapter 1 - Management information systems: Business driven MIS. Learning objectives of this chapter include: Describe the information age and the differences among data, information, business intelligence, and knowledge; identify the different departments in a company and why they must work together to achieve success; explain systems thinking and how management information systems enable business communications.

© 2014 by McGraw-Hill Education This is proprietary material solely for authorized instructor use Not authorized for sale or distribution in any manner This document may not be copied,

scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

CHAPTER ONE OVERVIEW

 SECTION 1.1 – BUSINESS DRIVEN MIS

• Competing in the Information Age

• The Challenge: Departmental Companies

• The Solution: Management Information Systems

 SECTION 1.2 – BUSINESS STRATEGY

• Identifying Competitive Advantages

• The Five Forces Model – Evaluating Industry

© 2014 by McGraw-Hill Education This is proprietary material solely for authorized instructor use Not authorized for sale or distribution in any manner This document may not be copied,

scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

BUSINESS

DRIVEN MIS

LEARNING OUTCOMES

1 Describe the information age and the

differences between data, information,

business intelligence, and knowledge

2 Identify the different departments in a

company and why they must work together to achieve success

3 Explain systems thinking and how

management information systems enable

business communications

COMPETING IN THE INFORMATION AGE

Did you know

 Avatar, the movie, took over 4 yrs

to make and cost $450 million

 Lady Gaga’s real name is Joanne

Angelina Germanotta

 It costs $2.6 million for a

30-second advertising time slot

during the Super Bowl

nformation age - The present time,

during which infinite quantities of facts

are widely available to anyone who

can use a computer

COMPETING IN THE INFORMATION AGE

 Examples of the power of business

and technology

• Amazon – Not a technology company;

primary business focus is selling books

• Netflix – Not a technology company;

primary business focus is renting videos

• Zappos – Not a technology company;

primary business focus is selling shoes

 Data - Raw facts that describe the characteristics

of an event or object

 Information - Data converted into a meaningful

and useful context

Business Intelligence

 Business intelligence -

Information collected from

multiple sources such as

suppliers, customers,

competitors, partners, and

industries that analyzes

patterns, trends, and

relationships for strategic

decision making

 Knowledge - Skills, experience, and

expertise coupled with information and

intelligence that creates a person’s

intellectual resources

 Knowledge worker – Individual

valued for their ability to interpret and

analyze information

THE CHALLENGE:

DEPARTMENTAL COMPANIES

Common Departments Working Independently

Common Departments Working Interdependently

INFORMATION SYSTEMS

THE SOLUTION: MANAGEMENT

INFORMATION SYSTEMS

INFORMATION SYSTEMS

THE SOLUTION: MANAGEMENT

INFORMATION SYSTEMS

 Systems thinking – A way of monitoring the entire

system by viewing multiple inputs being processed

or transformed to produce outputs while

continuously gathering feedback on each part

INFORMATION SYSTEMS

 Management Information Systems (MIS) –

A business function, like accounting and human resources, which moves information about

people, products, and processes across the

company to facilitate decision-making and

problem-solving

MIS Department Roles and Responsibilities

 Chief information officer (CIO) – Oversees all

uses of IT and ensures the strategic alignment

of IT with business goals and objectives

 Chief knowledge officer (CKO) - Responsible

for collecting, maintaining, and distributing the organization’s knowledge

 Chief privacy officer (CPO) – Responsible for

ensuring the ethical and legal use of

information

Roles and Responsibilities

 Chief security officer (CSO) –

Responsible for ensuring the security of IT

systems

 Chief technology officer (CTO) –

Responsible for ensuring the throughput,

speed, accuracy, availability, and

reliability of IT

© 2014 by McGraw-Hill Education This is proprietary material solely for authorized instructor use Not authorized for sale or distribution in any manner This document may not be copied,

scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

BUSINESS

STRATEGY

LEARNING OUTCOMES

4 Explain why competitive advantages are

temporary

5 Describe Porter’s Five Forces Model and

explain each of the five forces

6 Compare Porter’s three generic strategies

7 Demonstrate how a company can add value

by using Porter’s value chain analysis

IDENTIFYING COMPETITIVE

ADVANTAGES

 Business strategy – A leadership plan that

achieves a specific set of goals or objectives

such as

 Developing new products or services

 Entering new markets

 Increasing customer loyalty

 Attracting new customers

 Increasing sales

ADVANTAGES

IDENTIFYING COMPETITIVE

ADVANTAGES

 Competitive advantage – A product or service

that an organization’s customers place a greater value on than similar offerings from a competitor

 First-mover advantage – Occurs when an

organization can significantly impact its market

share by being first to market with a competitive

advantage

 Competitive intelligence – The process of

gathering information about the competitive

environment to improve the company’s ability to

succeed

 Competitive intelligence tools

• Porter’s Five Forces Model

• Porter’s Three Generic Strategies

• Porter’s Value Chain Analysis

THE FIVE FORCES MODEL –

EVALUATING INDUSTRY ATTRACTIVENESS

Porter’s Five

Forces Model

Buyer Power

 Buyer power – The ability of

buyers to affect the price of an item

• Switching cost – Manipulating costs

that make customers reluctant to

switch to another product

• Loyalty program – Rewards

customers based on the amount of

business they do with a particular

organization

Supplier Power

 Supplier power – The suppliers’ ability to

influence the prices they charge for supplies

• Supply chain – Consists of all parties involved in

the procurement of a product or raw material

Products or Services

 Threat of substitute products

or services – High when there

are many alternatives to a

product or service and low when

there are few alternatives

Threat of New Entrants

 Threat of new entrants – High when it is

easy for new competitors to enter a market

and low when there are significant entry

barriers

• Entry barrier – A feature of a product or service

that customers have come to expect and

entering competitors must offer the same for

survival

Existing Competitors

 Rivalry among existing competitors –

High when competition is fierce in a

market and low when competitors are

more complacent

• Product differentiation – Occurs when a

company develops unique differences in its

products or services with the intent to

influence demand

Analyzing the Airline Industry

 Perform a Porter’s Five Forces analysis of each of the following for a company entering the

commercial airline industry

• Buyer power

• Supplier power

• Threat of substitute products/services

• Threat of new entrants

• Rivalry among competitors

CHOOSING A BUSINESS FOCUS

Porter’s Three Generic Strategies

THE THREE GENERIC STRATEGIES

CHOOSING A BUSINESS FOCUS

Porter’s Three Generic Strategies

EXECUTING BUSINESS STRATEGIES

 Business process – A

standardized set of activities that

accomplish a specific task, such as

a specific process

 Value chain analysis – Views a

firm as a series of business

processes that each add value to

the product or service

VALUE CHAIN ANALYSIS –

EXECUTING BUSINESS STRATEGIES

 Primary value activities

• Inbound logistics - Acquires raw materials and

resources, and distributes

• Operations - Transforms raw materials or inputs into

goods and services

• Outbound logistics - Distributes goods and services to

EXECUTING BUSINESS STRATEGIES

 Support value activities

• Firm infrastructure – Includes the company format or

departmental structures, environment, and systems

• Human resource management – Provides employee

training, hiring, and compensation

• Technology development – Applies MIS to processes

to add value

• Procurement – Purchases inputs such as raw materials,

resources, equipment, and supplies

VALUE CHAIN ANALYSIS –

EXECUTING BUSINESS STRATEGIES

Porter’s Value Chain

EXECUTING BUSINESS STRATEGIES

Value Chain and Porter’s Five Forces Model

LEARNING OUTCOME REVIEW

please review the learning outcomes in

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