Chapter 1
The Importance of MIS
Jason C. H. Chen, Ph.D.
Professor of MIS
School of Business Administration
Gonzaga University
Spokane, WA 99258
chen@jepson.gonzaga.edu
Dr. Chen, Management Information Systems
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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.
Dr. Chen, Management Information Systems
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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: Why is the difference between information
technology and information systems important?
Q5: What is information?
Q6: What are necessary data characteristics?
Q7: 2022?
Dr. Chen, Management Information Systems
Why Information Systems?
“Chaotics”
technology are the two main forces
Globalization and __________
that helped to create a new level of interlocking
fragility in the world economy. While global
interdependence works in everyone’s favor in good
times, it rapidly spreads much pain and damage in
bad times.
by Philip Kolter and John Caslione (AMACOM 2009)
N
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Top-Ten Innovation Mistakes a Company
Can Make During a Turbulent Economy
•
•
•
•
•
•
•
•
•
•
Fire talent.
Cut
back on technology.
__________________
Reduce risk.
Stop product development.
Allow boards to replace growth-oriented CEOs with costcutting CEOs.
Retreat from globalization.
Allow CEOs to replace innovation as key strategy.
Change performance metrics.
Reinforce hierarchy over collaboration.
Retreat into walled castle.
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Q1: Why Is Introduction to MIS the Most
Important Class in the Business
School?
• 1. Learn to assess, evaluate, and apply
emerging information technology to
business
• 2. Gain marketable skills and perspectives
• 3. Moore’s Law creates infinite
opportunities for innovation
Dr. Chen, Management Information Systems
First Reason Introduction MIS Most
Important
1. Future business professionals need to be
able to assess, evaluate, and apply
emerging information technology to
business.
• You need the knowledge of this course
(BMIS235) to attain that skill.
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Second Reason Introduction MIS Most
Important
2. The only job security that exists is “a
marketable skill and the courage to use it.”
- Learning
What is the only entity that remained
unchanged in the “Business”?
- Learning to Learn and
- Learning to Change
• Because cost of data storage and data
communications is essentially zero, any
routine skill can and will be outsourced to the
lowest bidder.
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How Can I Attain Job Security?
• Develop non-routine
cognitive skills and
ability
• Knowledge and skills
are your job security
• Ability to cope with
rapid technological
change
“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
“Capacity to Learn”
Dr. Chen, Management Information Systems
)
•What are your marketable
skills?
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How Can Intro to MIS Help You Learn Nonroutine Skills?
Abstraction: Concealing irrelevant details from the user.
Abstraction is the process of temporarily ignoring underlying details so we
can focus on the big picture of the large problem at hand
Figure 1-2: Examples of Critical Skills for Nonroutine Cognition
Dr. Chen, Management Information Systems
Routine Skills and Moore’s Law
• Because cost of data storage and data
communications is essentially zero, any routine
skill can and will be outsourced to the lowest
bidder.
• We will study Moore’s Law with its relation to
ZERO advantage in the next slides.
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Third Reason 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.
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Ratio of Price to
Performance of Computers
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Consequences Moore’s Law
•
•
•
•
YouTube
iPad
Facebook
Woot.com
• Pandora
• Twitter
• LinkedIn
• Foursquare
Dr. Chen, Management Information Systems
What happens when data
storage and communications
costs are essentially zero?
Are There Cost-Effective Business
Applications of Facebook and
Twitter? (see next slide)
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?
FREE
________ADVANTAGE
– related to Moore’s Law?
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Achieving Business Goals and Objectives
• Q/A: “Everyone has a Facebook presence, therefore, I
should also develop my own one” .
• YES/NO
• What questions should be asked (clarified) before
making the decision?
–
–
–
–
–
“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?”
Information systems exist to help people in business
achieve the goals and objectives of that business
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Dr. Chen, Management Information Systems
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: Why is the difference between information
technology and information systems important?
Q5: What is information?
Q6: What are necessary data characteristics?
Q7: 2022?
Dr. Chen, Management Information Systems
What is MIS?
• Management, Use and Aligning Information
Systems to Achieve Business Strategies (and
consequently their goals and objectives).
• Computer-based information system
• (video)
• More to be explained in Part II.
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Management and Use
of Information Systems
Management
• 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
(user involvement).
Use
• You need to learn how to use the system to achieve business
goals.
• You are responsible for the system and data security.
• You must ask the right questions
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What is MIS?
• Information systems components (video link)
Figure 1-3 Five Components of an Information System
what is the direction of degree of difficulty?
 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
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Dr. Chen, Management Information Systems
Q2: What Is MIS? (Summary)
Business professionals need to:
Take an active role in IS to ensure that
systems meet their needs
Understand how IT systems are
constructed
Consider users’ needs during
development
Learn how to use information systems
Take into account ancillary IT functions
(Security, Backups, etc.)
Dr. Chen, Management Information Systems
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: Why is the difference between information
technology and information systems important?
Q5: What is information?
Q6: What are necessary data characteristics?
Q7: 2022?
Dr. Chen, Management Information Systems
How Can You Use the Five-Component Framework?
The Most Important Component – YOU [Video]
• Quality of your thinking
• Change the way your brain works
• Know how to use information systems
Figure 1-4 Characteristics of the Five Components
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Components Ordered by Difficulty and Disruption
Five IS components evaluated based on order of ease of
change and amount of organizational disruption.
1.
2.
3.
4.
5.
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.
- create competitive advantage as they are
more difficult to be replicated/replaced.
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Q3: How Can You Use the FiveComponent Model? (Summary)
• Consider high-tech vs. low-tech alternatives
• Understand scope of new systems
• Remember components ordered by difficulty and
disruption
Dr. Chen, Management Information Systems
Next Class
• 1. Complete reading the rest of chapter.
• 2. Read chapter Case Study 1: The Amazon of
Innovation (1,2,3,5,6; p.27-29)
– Prepare answers for all seven questions and turn in a
hardcopy using MS/Word next class.
– We will also conduct case discussion.
• 3. Read Ethics Guide (Situations A,B,C Q:1&2; p.1617) and prepare for class discussion
• 4. If you are asked to present your answer for case
study (or “Guide”) questions but you do not prepare
for them, there will be “10” points off every time from
your final course grade.
Dr. Chen, Management Information Systems
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: Why is the difference between
information technology and
information systems important?
Q5: What is information?
Q6: What are necessary data characteristics?
Q7: 2022?
Dr. Chen, Management Information Systems
IS vs. IT
IS
?
=
IT
Why?
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Components of Information Systems
(MIS/IS) – Managerial Perspective
ORGANIZATIONS
TECHNOLOGY
INFORMATION
SYSTEMS
MANAGEMENT
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What is Information Systems?
• Information Systems (IS) are more than just computer
hardware and software.
• It is not just developing business applications programs
• Information Systems include:
– Information Technology
– Management
– Organization
• Ultimately, IS are used as strategic tool to
improve/create an organization’s competitive
advantage.
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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.
• You can buy IT, but you cannot buy IS.
- competitive advantage since they are difficult
to be replaced/replicated.
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How can you enjoy/apply MIS ...
• To _________the
improve
information content of the
data,
present
• to _________the
valuable information in a
user-friendly, intuitive, and easy to
understand way, and
empower knowledge workers of today
• to ________
and tomorrow.
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Roles of Information Systems
Automates
Informates
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Innovates/
Transforms
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Q4: Why Is Difference Between IT and IS
Important? (Summary)
IS = IT + Management + Organization
IS = IT + Procedures + People (text)
Avoid common mistake: You cannot buy an IS
• Can buy or lease hardware, software licenses,
databases and predesigned procedures
• People require training, overcoming employees’
resistance to change, managing employees using
new system
Dr. Chen, Management Information Systems
SUMMARY
Information System (IS) should be an
organizational and management
solution, based on information
technology (IT), to a challenge posed
by the environment.
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Dr. Chen, Management Information Systems
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: Why is the difference between information
technology and information systems important?
Q5: What is information?
Q6: What are necessary data characteristics?
Q7: 2022?
Dr. Chen, Management Information Systems
Q5: What Is Information?
• Information is knowledge derived from data
• Data in a meaningful context
 Data processed by summing, ordering,
averaging, grouping, comparing, etc.
• “A difference that makes a difference”
• Where is information?
 It’s in Your Head
Dr. Chen, Management Information Systems
What Is Information?
Does this graph contain information?
Dr. Chen, Management Information Systems
Which is data? Information?
Change Process
Figure (Extra)
Dr. Chen, Management Information Systems
Context
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Which is data? Information?
•
•
•
•
•
•
•
A student’s name
A student’s transcript record
Unit price of iPod touch
Monthly sales amount of MP3 players
Fall enrollment of students
Fall enrollment of students from 2001 – 2009
Enrollment comparisons of students at GU vs.
other peer universities
• Users really want is
– Information
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What is Information ?
DATA
INFORMATION
What is 80/20 rule?
How to apply it to this scenario?
Information is refined data.
Dr. Chen, Management Information Systems
What is Information ?
DATA
INFORMATION
Trivial many (80%)?
or
Vital few (20%)?
Other business
example?
Dr. Chen, Management Information Systems
80% of
information/
valuable output
DATA, INFORMATION ,
AND KNOWLEDGE
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The relationships between data, information, and knowledge.
Data
Data
Information
Data
Information
Simple observation of
states of the world
Data endowed with
relevance and purpose
Easily captured
Requires unit of analysis
Easily structured
Needs consensus on meaning
Easily transferred
Human mediation necessary
Compact, quantifiable
Often garbled in transmission
Knowledge
Knowledge
Valuable information from
the human mind; includes
reflection, synthesis,
context
Hard to capture electronically
Hard to structure
Often tacit
Hard to transfer
Highly personal to the source
More human contribution
Greater value
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Value Chain Data of the
Enterprise
Data
Information
Knowledge
Intelligence
Wisdom
“Knowledge is information that changes something or somebody – either by
becoming grounds for actions, or by making an individual (or an institution)
capable of different or more effective action” - Pete Drucker.
Wisdom refers to our effective use of intelligence (or knowledge),
intelligence refers to our effective use of knowledge.
An organization learns what it knows by cultivating its knowledge ecosystem in
which information, insights, and inspirations cross-fertilize and feed one
another, free from the constraints of geography and schedule.
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100 Years ago...

Industrial Revolution
changed the World
Today...
• Information
Revolution!
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100 Years ago...

Industrial Revolution
changed the World
Today...
• Information
Revolution!
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Industry
Evolution
(mid 1770s)
Steam Engine
Rail Road
(1829,
change concept
of distance)
Impact on:
Economy, Politics,
Social change
Information
Evolution
(late 1990s)
Computer
Internet
(1990,
??? Distance)
N
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More Information ?
• More information is
not profitable unless
it is relevant
information.
• Executives will need
better information in
the future if their
companies are to be
competitive.
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Dr. Chen, Management Information Systems
Information …
BAD information is WORSE than ...
NO information.
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Dr. Chen, Management Information Systems
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: Why is the difference between information
technology and information systems important?
Q5: What is information?
Q6: What are necessary data
characteristics?
Q7: 2022?
Dr. Chen, Management Information Systems
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 sufficient—for purpose for
which it is generated. Avoid
information overload.
• Worth its cost—appropriate
relationship between cost of
information and its value.
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Attributes of Information
Quality
We realize that a firm needs better
information to survive and prosper.
Therefore, high quality information
products have to be provided to
management.
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Dr. Chen, Management Information Systems
Attributes of Information
Quality
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Q7: 2022?
•
•
•
•
Most computers won’t look like a computer
Kindle (now)
The Future of Computers
Everyday items will have computers in them
 What will that mean to industry in general? Who
will be the winners and losers?
• Why go to class if you have a classroom in a
“box”?
 College textbooks?
 College classrooms and campuses?
Video: ROLLTOP-myRolltop New step in portable
computers (1m48s)
Dr. Chen, Management Information Systems
• END of CHAPTER 1
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