MIS
CHAPTER 1
INFORMATION SYSTEMS:
AN OVERVIEW
Hossein BIDGOLI
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
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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
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.
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Chapter 1 Information Systems: An Overview
l e a r n i n g o u t c o m e s (cont’d.)
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.
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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
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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 sect
• Many organizations use information systems to
gain a competitive advantage
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Chapter 1 Information Systems: An Overview
Major Components of an Information System
•
•
•
•
Data
Database
Process
Information
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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
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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
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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
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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
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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)
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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
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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
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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
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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
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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)
– Improve marketing decisions
– Provide timely, accurate, and integrated information
about the marketing mix
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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
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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
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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
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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
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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
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Exhibit 1.4
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The Five Forces Model
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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
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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 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
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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
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©2011 Course Technology, a part of Cengage Learning
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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
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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
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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
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©2011 Course Technology, a part of Cengage Learning
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