MIS
CHAPTER 1
INFORMATION SYSTEMS:
AN OVERVIEW
Hossein BIDGOLI
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
1
Chapter 1 Information Systems: An Overview
learning outcomes
LO1
Discuss common applications of computers and
information systems.
LO2
Explain the differences between computer literacy
and information literacy.
LO3
LO4
LO5
Define transaction processing systems.
LO6
Discuss the differences between data and
information.
Define management information systems.
Describe the four major components of an
information system.
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
2
Chapter 1 Information Systems: An Overview
l e a r n i n g o u t c o m e s (cont’d.)
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.
LO10 Review the IT job market
LO11 Summarize the future outlook of information
systems.
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
3
Chapter 1 Information Systems: An Overview
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”
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
4
Chapter 1 Information Systems: An Overview
A New Era of Marketing: YouTube
YouTube is a popular video sharing service that
can be used as a marketing tool. The following are
examples of corporations that are using YouTube
to promote their products and services:
• Quiksilver
• Ford Models
• University of Phoenix Online
• The Home Depot
• Nikefootball
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
5
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
6
Chapter 1 Information Systems: An Overview
Social Networking and the Vulnerability of Personal
Information
To reduce risk and improve the privacy of your
personal information, consider the following:
• Always use the privacy controls offered by the
social networking sites
• Use long passwords
• Do not post a phone number or a full address
• Do not post children’s names
• Do not be specific when posting information
about vacations or business trips
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
7
Chapter 1 Information Systems: An Overview
The Beginning: Transaction Processing Systems
• Transaction processing systems (TPSs)
–
–
–
–
Focus on data collection and processing
Cost reduction
Operations repetitive
Human involvement minimal
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
8
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
9
Chapter 1 Information Systems: An Overview
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 sector
• Many organizations use information systems to
gain a competitive advantage
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
10
Chapter 1 Information Systems: An Overview
Information Technology at Hertz Car Rental Company
• Mainframe-based decision support system (DSS)
• Executive information system (EIS)
– Analyze essential information from both external and
internal sources
– Manipulate and refine data to make it more
meaningful
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
11
Chapter 1 Information Systems: An Overview
Major Components of an Information System
•
•
•
•
Data
Database
Process
Information
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
12
Exhibit 1.3
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
Major Components of an Information System
13
Chapter 1 Information Systems: An Overview
Data
• Data
– Input to the system
• Sources of data
– External
– Internal
• Time orientation
• Can be collected in different forms
– Aggregated
– Disaggregated
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
14
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
15
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
16
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
17
Chapter 1 Information Systems: An Overview
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)
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
18
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
19
Chapter 1 Information Systems: An Overview
Using Information Systems and Information
Technologies
• Information technologies
– Achieve goals of information systems
• Examples
–
–
–
–
Internet
Databases
POS Systems
RFID tags
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
20
Chapter 1 Information Systems: An Overview
Information Technologies at 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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
21
Chapter 1 Information Systems: An Overview
The Importance of Information Systems
• Information
– Second most important resource in any organization
• Four Ms of resources:
–
–
–
–
Manpower
Machinery
Materials
Money
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
22
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
23
Chapter 1 Information Systems: An Overview
The Importance of Information Systems (cont’d.)
• 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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
24
Chapter 1 Information Systems: An Overview
The Importance of Information Systems (cont’d.)
• Financial information system (FIS)
– Provides information to financial executives in a
timely manner
• Marketing information system (MKIS)
– Improves marketing decisions
– Provides timely, accurate, and integrated information
about the marketing mix
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
25
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
26
Chapter 1 Information Systems: An Overview
Wal-Mart Stores, Inc.
• Wal-Mart 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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
27
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
28
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
29
Chapter 1 Information Systems: An Overview
Using Information Technologies for a Competitive
Advantage (cont'd.)
• Differentiation strategies
– Make products and services different from
competitors
– Examples: Apple, Amazon.com
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
30
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
31
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
32
Exhibit 1.4
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
The Five Forces Model
33
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
34
Chapter 1 Information Systems: An Overview
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 are 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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
35
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
36
Chapter 1 Information Systems: An Overview
Information Technology at Boeing
• Intelligent information systems
– Artificial intelligence technologies
– Expert systems
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
37
Chapter 1 Information Systems: An Overview
The IT Job Market
IT jobs fall into the following 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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
38
Chapter 1 Information Systems: An Overview
The IT Job Market (cont'd.)
CTO/CIO
• The top job in the information systems field
belongs to either the chief technology officer
(CTO) or the chief information officer (CIO)
• This person is responsible for long-range
information systems planning and for keeping
abreast of new developments in the field that
can affect a company's productivity or
competitiveness
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
39
Chapter 1 Information Systems: An Overview
The IT Job Market (cont'd.)
Manager of Information Systems Services
This person is responsible for managing all the
hardware, software, and personnel within the
information systems department
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
40
Chapter 1 Information Systems: An Overview
The IT Job Market (cont'd.)
Systems Analyst
• This person is responsible for the design and
implementation of information systems
• In addition to computer knowledge and an
information systems background, this position
also requires a thorough understanding of
business systems and functional areas within a
business organization
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
41
Chapter 1 Information Systems: An Overview
The IT Job Market (cont'd.)
Network Administrator
• This person oversees a company's internal and
external network systems, designing and
implementing network systems that deliver
correct information to the right decision-maker
in a timely manner
• Providing network and cybersecurity is part of
this position’s responsibility
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
42
Chapter 1 Information Systems: An Overview
The IT Job Market (cont'd.)
Database Administrator
• A database administrator (DBA) is responsible
for database design and implementation
• Additionally, a database administrator should
have knowledge and understanding of data
warehouses and data mining tools
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
43
Chapter 1 Information Systems: An Overview
The IT Job Market (cont'd.)
Computer Programmer
• A computer programmer writes computer
programs or software pieces that allow the
information system to perform a specific task
• There are many computer languages available,
and each one requires a specific knowledge
suitable for a specific application
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
44
Chapter 1 Information Systems: An Overview
The IT Job Market (cont'd.)
Webmaster
• A webmaster designs and maintains the
organization’s Web site
• Because of the popularity of e-commerce
applications, webmasters have been in high
demand
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
45
Chapter 1 Information Systems: An Overview
Requirements for IT Positions
• The educational backgrounds for an IT position
can include an AA, BA, BS, MS, or MBA in
information systems and related fields
• The salaries vary based on educational
background, experience, and the job’s location
• Salaries range from $52,000 for a programmer
to over $180,000 for a CIO
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
46
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
47
Chapter 1 Information Systems: An Overview
Future Outlooks (cont'd.)
• Internet growth and acceptance will continue
• Computer criminals will become more
sophisticated
– Protecting personal identity information will become
more difficult
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
48
Chapter 1 Information Systems: An Overview
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
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
49