The Information Age
in Which You Live:
Changing the Face of Business
&
Computer Hardware and Software
Why do we need to Study MIS?
Telecommuting
 Advantages?
 Disadvantages?
 Who can telecommute?
 Who cannot telecommute?
INTRODUCTION
 Information age
 Knowledge worker
 Outnumber all other types of workers at least four-to-
one
Opening Case:
Cell Phones Doom Phone Revenues
for Hotels
Opening Case:
Cell Phones Doom Phone Revenues
for Hotels
 The year 2000 – typical hotel could budget
annual revenue of $1,274 per room for in-room
phone charges
 The year 2009 – typical hotel could budget
annual revenue of only $178 per room for in-room
phone charges
 Cell phones and technologies of all kinds are
transforming entire industries
INTRODUCTION
Technology can have unintended consequences that can

transform an industry’s cost basis and revenue model
 Technology can create new industries.
 You live in a digital age
 Average American relies on more than 250 computers per
day
 Radio took 38 years to reach 50 million years, iPod took 3
years, FaceBook 2 years
 MIS – Management Information Systems: People
use IS to work with information.
Three Key Resources
1.
2.
3.
Information
People
Information Technology/Information Systems
MIS Resource #1:
Information
 Intellectual asset hierarchy – data, information
(data in context), business intelligence (making
decisions with information), knowledge (using past
intelligence to get new information)
Information Resource
Information is
often
aggregated
data that has
meaning such
as average
age, youngest
and oldest
customer, and
a histogram of
customer ages
Information Resource
 Business intelligence (BI) – collective
information about…




Customers
Competitors
Business partners
Competitive environment
 BI can help you make important, strategic
decisions
Information Resource
Information Resource – Quality
Attributes
 Timeliness
 When you need it
 Describing the right time period
 Location (no matter where you are)
 Form (audio, text, animation, etc)
 Validity (credibility)
Information Resource –
Organizational Perspective
Information Resource – Flows of
Information
 Upward
 Downward
 Horizontal
 Outward/Inward
Information Resource – What It
Describes




Internal: Internal operational information
External: Information on environment of business
Objective: Measurable, verifiable information
Subjective: Speculative, forecasting type information
Employment Information & Social Media: Employers use social media
to screen employee applicants. Applicants can use social media
feeds of companies to see what is going on with them. Also, use sites like
LinkedIn to network and get jobs that-a-way.
MIS Resource #2:
People
 People are the most important resource in any
organization, with a focus on



Technology literacy: HOW (which technology to use
and how to use it) and WHEN (should we use
technology at all for this or is ther another way?)
Information literacy: What information do I need to
solve my problem? Diaper & Beer example.
Ethical responsibilities: Principles and standards to
guide behavior. Illegal copies, cheating, hiding
information that can alter someone’s decisions.
People Resource - Ethics
You always want
your actions to fall in
Quadrant I – both
ethical and legal.
MIS Resource #3:
IT/IS
 Information technology (IT) : Infrastructure
available to everyone and offers no competitive
advantage.
 Information Systems( IS): Applications that run on
infrastructure and give us competitive advantage.
Six Categories of Hardware
Keyboard
(input)
CDs (storage)
Video card
(connecting)
CPU
Cable modem
(telecommunications)
Monitor (output)
Information Technology –
Software
Two types of software:
1. Application software: MS Office (excel, word,
Powerpoint, Access), email server and client, web
server and browser
System software
2.


Operating system software
Utility software
Analyzing Whether to Get a New
Technology
 Fixed Cost, Variable Cost and Revenue are needed for
break even analysis. How many movie posters do I
need to sell to break even if my fixed cost is $1500,
variable cost is $6 and revenue per unit is $9? 500
posters a year!
 Sometimes companies invest in IT/IS even if they lose
money, because of fear of obsolescence or keeping up
with the competition.
Can Technology Help Reduce These
Costs & Increase Revenue?
 Fixed Costs: Digital Storefronts (cheap store),
Telecommuting (no office), VOIP (cheap
communications to customers, Cloud Computing
(host your website for cheap and pay as it grows).
 Variable Costs: Send goods virtually if you can (music,
books). CrowdSourcing: Get people like your
customers to do your work for free!
 Revenue: Recommendation Engines to enhance sales.
Long Tailed Economics.
Long Tail
What is the Long Tail:
Niche, specialty products that enjoy distributed, educated markets
30-40% of Amazon sales are with titles that would not be found in
a regular bookstore. What does this tell us?
What other products fit this long tail?
-Music www.cdbaby.com
-Movies www.netflix.com
-Specialty foods http://www.uplandscheese.com/
-Tube amplifiers www.vista-audio.com
Any others?
Discussion: What are the implications on this for industry? What kind of
companies will benefit from this? How can IT help? Improved
product scope.
Drivers of the Long Tail
Supply Side:
-Etailers have unlimited shelf space
-Print on demand allows books to be printed economically.
CNN & Fox News can cover stories across the globe more economically,
leading to more diverse stories.
Consumer side:
-Sophisticated search capabilities allow mature tastes to develop
- www.cdbaby.com search feature
-netflix search capabilities www.netflix.com
-Amazon search capabilities www.amazon.com
The role of forums and reviews in changing tastes
http://audioroundtable.com/General/messages/4317.html
Long Term Effects of the Long Tail
-Specialized products, mass customized
-Lowering of breakeven points due to lower production costs in
music, movies, books
-Increased differentiation of consumer tastes
http://www.espressozone.com/
-Change in the concept of fame/superstar?
-Reduction in blockbuster products designed to appeal to all?
-Allow distributed niche markets as opposed to geographically
focused marketing
Is the Long Tail here to stay?
Speculation: Reduce urban centers?
Porter’s Five Forces Model
• Bargaining power of buyers
• Bargaining power of suppliers
• Threat of substitute products or services
• Threat of new entrants
• Competitive intensity in industry
Discussion: What are example industries of each type? Overall, how helpful is this
model?
-Bargaining power of buyers: Loyalty programs, lock customers in
-Bargaining power of suppliers: multiple suppliers, reverse auctions
-Switching costs are usually switching to another competitor but same product
OR switching to another similar product. E.g., DVDs, VHS & downloads
-Threat of new entrants: Can IT help or hurt here?
Discussion: Movie Rental Industry. What HBO Go& Netflix do?
How about a new entrant: what strategy should they follow? Redbook?
Porter’s Three Strategies
• Cost Leadership: Walmart model. Need very tight operations for this.
•Differentiation: Offer products that are unique and different. iPhone or Nest.
• Focus or Niche: Find a small segment that is underserved and make a
specialized product for them. Simplisafe.com
Run/Grow/Transform
Managers must decide how much to allocate to
Run: Improve existing infrastructure and IS.
Grow: Try to use technology to get into new markets or develop new product lines
Transform: Transform your business model. HBO?
Where do we go from here in IT/IS?
Four Phases of Technology in Business:
1950-1980: Automate on large mainframes
1980-1995: Push information onto employee PCs.
1995-2010: Use the Internet to connect companies and customers to drive
down costs.
2010- Present: Mobile Computing so Technology is available anywhere.
Future: Artificial Intelligence and Robots, Augmented Reality.