Using MIS 10th Edition Chapter 1 The Importance of MIS

“But Today, They’re Not Enough.” Jennifer Lacks Skills Falcon Security Needs: Abstract reasoning skills. Systems Thinking Skills. Collaboration Skills. Experimentation Skills. What's not good enough? What should Jennifer have done differently? To what extent are the four skills required in your education so far? How do you feel about working with ambiguity?

What Do Employers Want? Self starter, Don’t wait to be told what to do. Team worker Develops ideas with others. Asks questions. Pulls more than their own weight.

Study Questions Q1-1 Why is Introduction to MIS the most important class in the business school? Q1-2 How will MIS affect me? Q1-3 What is MIS? Q1-4 How can you use the five-component model? Q1-5 What is information? Q1-6 What are necessary data characteristics? Q1-7 2027? Chapter Preview It begins by discussing the key skills that students need and explains why this course is the best course for teaching those key skills. The discussion of how important this class will be to your career is followed by discussions of fundamental concepts. The chapter wraps up with some practice on one of the key skills students need to learn.

The Digital Revolution Q1-1 Why is Introduction to MIS the most important class in the business school? Technology fundamentally changing business. Information Age Production, distribution, control of information primary economic drivers. Digital Revolution From mechanical/analog devices to digital devices. What happens when those costs are essentially zero?

Understanding the Forces Pushing the Evolution of New Digital Devices Q1-1 Why is Introduction to MIS the most important class in the business school? Bell’s Law New class of computers establishes a new industry each decade. New platforms, programming environments, industries, networks, and information systems. Understand how next digital evolution will affect businesses. What an industry does and how it does it will change. Change is a given factor.

Computer Price/Performance Ratio Historical Trend Q1-1 Why is Introduction to MIS the most important class in the business school? Moore’s Law: “The number of transistors per square inch on an integrated chip doubles every 18 months.” You needn’t care how fast of a computer your company can buy for $100. Figure 1-1 Computer Price / Performance Ratio Decreases

Metcalfe’s Law Q1-1 Why is Introduction to MIS the most important class in the business school? Network value equal to square of number of users connected to it. (V=U2) Google, Amazon, eBay exist due to large numbers of Internet users. Will these be the biggest companies in 2027? Or will new ones emerge? Figure 1-2 Increasing Value of Networks

Fundamental Forces Changing Technology Q1-1 Why is Introduction to MIS the most important class in the business school? Law Meaning Implications Moore’s Law The number of transistors per square inch on an integrated chip doubles every 18 months. Computers are getting exponentially faster. The cost of data processing is approaching zero. Metcalfe’s Law The value of a network is equal to the square of the number of users connected to it. More digital devices are being connected together. The value of digital and social networks is increasing exponentially. Nielsen’s Law Network connection speeds for high-end users will increase by 50 percent per year. Network speed is increasing. Higher speeds enable new products, platforms, and companies. Kryder’s Law The storage density on magnetic disks is increasing at an exponential rate. Storage capacity is increasing exponentially. The cost of storing data is approaching zero. Test their connection speed here. http://www.geeksquad.com/do-it-yourself/tools/test-your-broadband-speed.aspx Zipf’s Law is a more accurate, though less easily understood, way of explaining how the value of a network increases as additional network nodes are added. See Briscoe, Odlyzko, and Tilly’s 2006 article “Metcalfe’s Law Is Wrong” for a better explanation. http://spectrum.ieee.org/computing/networks/metcalfes-law-is-wrong.

Price of Storage Capacity per GB Q1-1 Why is Introduction to MIS the most important class in the business school? Moore’s Law: “The number of transistors per square inch on an integrated chip doubles every 18 months.” You needn’t care how fast of a computer your company can buy for $100. Figure 1-4 Price of Storage Capacity per GB

This Is the Most Important Class in the School of Business Because You Will Learn: Q1-1 Why is Introduction to MIS the most important class in the business school? How technology fundamentally changes businesses. Why executives try to find ways to use new technology to create a sustainable competitive advantage. Assess, evaluate, apply emerging information technology to business. Help you attain knowledge needed by future business professionals.

Technological Change is Accelerating Q1-2 How will MIS affect me? Bell’s Law Today’s highly successful business could be bankrupt quickly because technology changed and it didn’t. Example: Blockbuster In 2004 Blockbuster had $5.9B in revenues In 2010 Blockbuster filed for bankruptcy High-speed network connections and streaming video changed the competitive landscape Changes in technology will threaten your job security and provide opportunities, if you have the skills and desire to use them.

How Can I Attain Job Security? Q1-2 How will MIS affect me? Moore’s Law, Metcalfe’s Law, and Kryder’s Law Driving data processing, storage, communications costs to essentially zero. Any routine skill can, and will, be outsourced to lowest bidder. Can today's non-routine skills become routine in a few years? Identify some non-routine job skills. How could they be threatened?

What Skills Will Be Marketable During Your Career? Q1-2 How will MIS affect me? Rapid technological change and increased international competition: Requires skills and ability to adapt. Favors people with strong non-routine cognitive skills. Message: Develop strong non-routine cognitive skills.

What Is a Marketable Skill? Q1-2 How will MIS affect me? Skill Example Jennifer's Problem at Falcon Security Abstract Reasoning Construct a model or representation. Hesitancy and uncertainty when conceptualizing a method for identifying 3D printable drone parts. Systems Thinking Model system components and show how components’ inputs and outputs relate to one another. Inability to model Falcon Security’s operational needs. Collaboration Develop ideas and plans with others. Provide and receive critical feedback. Unwilling to work with others on work-in-progress. Ability to Experiment Create and test promising new alternatives, consistent with available resources. Fear of failure prohibited discussion of new ideas. Rapid technological change and increased international competition place spotlight on workforce skills and preparation, particularly ability to adapt to changing technology and shifting demand. How are abstract thinking and system thinking related? Figure 1-5 Examples of Critical Skills for Nonroutine Cognition

How Can Intro to MIS Help You Learn Non-Routine Skills? Q1-2 How will MIS affect me? Abstract Reason Ability to make and manipulate models. Learn to use and construct abstract models. Ch. 1: Five components of an IS model. Ch. 5: How to create data models. Ch. 10: How to make process models. Abstract thinking involves using models. One or more models in every course topic and book chapter. The model example is from Wikipedia.org https://en.wikipedia.org/wiki/Data_model#/media/File:Data_modeling_context.svg.

How Can Intro to MIS Help You Learn Non-Routine Skills? (cont’d) Q1-2 How will MIS affect me? Systems Thinking Ability to model system components, connect inputs and outputs among components to reflect structure and dynamics. Ability to discuss, illustrate, critique systems; compare alternative systems; apply different systems to different situations. These skills are essential for business professionals.

How Can Intro to MIS Help You Learn Non-Routine Skills? (cont’d) Q1-2 How will MIS affect me? Collaboration People working together to achieve a common goal, result, or work product. Ch. 2 discusses collaboration skills and illustrates several collaboration information systems. Every chapter of this book includes collaboration exercises that you may be assigned in class or as homework.

How Can Intro to MIS Help You Learn Non-Routine Skills? (cont’d) Q1-2 How will MIS affect me? Ability to Experiment Make reasoned analysis of an opportunity; develop and evaluate possible solutions. “I’ve never done this before.” “I don’t know how to do it.” “But will it work?” “Is it too weird for the market?” Fear of failure paralyzes many good people and ideas Use features and functions of Microsoft Excel, Access not used before. Collaborate using Microsoft SharePoint, Google Docs and Spreadsheets, or other collaboration tools. Think about Falcon Security's 3D printing problem. What are risks? Should they proceed?

Jobs 69% of college graduates need additional training or education. Q1-2 How will MIS affect me? 69% of college graduates need additional training or education. 46% working in jobs not requiring their degree, underemployed. Better success for students with courses related to information systems. Tradable job Job not dependent on particular location, can be offshore outsourced. One in two recent college graduates either unemployed or underemployed, but, not in all job categories. Will these trends change over the next 20 years?

Job Growth By Sector Over the Past Twenty Years Q1-2 How will MIS affect me? This figure shows tradable jobs; it puts an end to the myth that all the good computer jobs have gone overseas. Notice the rapid growth in Management, Scientific, and Technical Consulting from 2000-2009. Figure 1-6 Growth of Jobs by Sector from 1989 to 2009

BLS Occupational Outlook 2014-2024   2012 Median Pay 2014 Median Pay Job Growth (%) 2014-24 Job Growth (N) 2014-24 Business Managers Marketing Managers $ 115,750 $ 123,450 9% 19,700 Information Systems Managers $ 120,950 $ 127,640 15% 53,700 Financial Managers $ 109,740 $ 115,320 7% 37,700 Human Resources Managers $ 99,720 $ 102,780 10,800 Sales Managers $ 105,260 $ 110,660 5% 19,000 Computer and Information Technology Computer Network Architects $ 91,000 $ 98,430 12,700 Computer Systems Analysts $ 79,680 $ 82,710 21% 118,600 Database Administrators $ 118,700 $ 80,280 11% 13,400 Information Security Analysts $ 87,170 $ 88,890 18% 14,800 Network and Systems Admin. $ 72,560 $ 75,790 8% 30,200 Software Developers $ 93,350 $ 97,990 17% 186,600 Web Developers $ 62,500 $ 63,490 27% 39,500 Business Occupations Accountants and Auditors $ 63,550 $ 65,940 142,400 Financial Analysts $ 76,950 $ 78,620 12% 32,300 Management Analysts $ 78,600 $ 80,880 14% 103,400 Market Research Analysts $ 60,300 $ 61,290 19% 92,300 Logisticians $ 72,780 $ 73,870 2% 2,500 Human Resources Specialists $ 55,640 $ 57,420 22,000 U.S. Bureau of Labor Statistics recent job projections for business managers, computer and information technology, and other business occupations for the years 2014 to 2024. Growth rates of all information systems–related jobs are above the average for all occupations. Figure 1-7 Bureau of Labor Statistics Occupational Outlook 2014–2024

Bottom Line of MIS Course Q1-2 How will MIS affect me? Most important course in business school because: Gives background needed to assess, evaluate, and apply emerging information systems technology to business. Gives marketable skills by helping you learn abstraction, systems thinking, collaboration, and experimentation. Makes you aware of well-paying, high demand MIS-related jobs.

Management Information Systems Q1-3 What is MIS? Key elements Management and use Information systems Strategies Goal of MIS: Managing IS to achieve business strategies.

Management Information Systems (cont’d) Q1-3 What is MIS? Management and use to: Develop, maintain, adapt by: Creating an information system that meets your needs, take an active role in system’s development. Why? Business professionals using cognitive skills to understand business needs and requirements.

Components of an Information System? Q1-3 What is MIS? Identify IS components of your university's online registration system. This framework appears throughout the textbook. Figure 1-8 Five Components of an Information System

Difference Between IT and IS Q1-3 What is MIS? Information technology (IT) Products Methods Inventions Standards IT drives development of new IS. IT components = Hardware + Software + Data IS = IT + Procedures + People IT People IS Procedures

Development and Use of Information Systems Q1-3 What is MIS? Business professionals need to: Take active role to ensure systems meet their needs. Understand how IS constructed. Consider users’ needs during development. Learn how to use IS. Remember ancillary requirements (security, backups).

Achieving Strategies Q1-3 What is MIS? Information systems exist to help people achieve business strategies. “What is the purpose of our Facebook page?” “What is it going to do for us?” “What is our policy for employees’ contributions?” “What should we do about critical customer reviews?” “Are the costs of maintaining the page sufficiently offset by the benefits?” Chapter 3 addresses the relationship between information systems and strategy in more depth. Chapter 8 addresses social media and strategy specifically.

The Five-Component Model Q1-4 How can you use the five-component model? Automation moves routine jobs to the computer side. Q1-4 How can you use the five-component model?

Characteristics of the Five Components Q1-4 How can you use the five-component model? Most Important Component – YOU! Your cognitive skills determine quality of your thinking, ability to conceive information from data. You add value to information and information systems. Only humans produce information. All components must work together. It’s only data until you or some other human takes it into their mind and are informed by it.

Why Is the Difference Between IT and IS Important to You? Q1-4 How can you use the five-component model? Avoid common mistake: Cannot buy an IS. Can buy, rent, lease hardware, software, and databases, and predesigned procedures. People execute procedures to employ new IT. New systems require training, overcoming employee resistance, and managing employees as they use new system. Use example of an organization developing a Facebook page. Facebook provides hardware, software, database structures, and standard procedures. You provide content, custom procedures, training, and managing your employees.

Why Is the Difference Between IT and IS Important to You? (cont’d) Q1-4 How can you use the five-component model? High-tech vs. low-tech information systems. Consider amount of work being moved from people to computers. Understanding scope of new information systems. Assess how big an investment new technology represents. Components ordered by difficulty and disruption. Information systems differ in the amount of work moved from the human side (people and procedures) to the computer side (hardware and programs). When considering different information systems alternatives, it’s helpful to consider low-tech versus high-tech alternatives in light of the amount of work being moved from people to computers.

A is for Alphabet So What? The Internet has enabled innovation and changed our lives. Google is one of the largest publicly traded companies in the world with a diverse portfolio of projects. As of August 10, 2015, it was a subsidiary of an overarching company named Alphabet Inc. Page and Brin manage the overall strategy, but not daily operations of each company.

A is for Alphabet (cont’d) So What? The company was restructured to: Retain top talent in a highly competitive industry. Decrease bureaucratic climate. Improve internal career trajectories of industry superstars. Make individual companies more nimble, efficient, and autonomous.

Defining Information Definitions vary: Knowledge derived from data. Q1-5 What is information? Definitions vary: Knowledge derived from data. Meaningful context. Processed data, or data processed by summing, ordering, averaging, grouping, comparing, or similar operations. “A difference that makes a difference.” Data are recorded facts or figures. Mary Jones earns $50.00 per hour is data. Average hourly wage of all the graphic designers is $60.00 per hour is information. Explain.

Amazon.com Stock Price and Net Income Q1-5 What is information? Does this graph contain information? Figure 1-9 Amazon.com Stock Price and Net Income

Where Is Information? Graph is not information. Q1-5 What is information? Graph is not information. It’s data people perceive and use to conceive information. Ability to conceive information determined by cognitive skills. People perceive different information from same data. You add value by conceiving information from data. Information is created in your mind, which explains why you are the most important part of any information system you use. Data is just the data; the information you conceive from it is the value that you add to the information system.

Characteristics of Data Q1-6 What are necessary data characteristics? Accurate Timely Relevant To context To subject Just sufficient Worth its cost Do not rely on data just because it appears in the context of a Web page, a well-formatted report, or a fancy query. It is sometimes easy to be misled by data delivered with beautiful, active graphics. Do not be misled. When you use a new information system, be sceptical. Cross-check the data you receive.

Ethics and Professional Responsibility Ethics Guide Use Kant’s categorical imperative, to explore ethical issues concerning deceptive data displays. Practice applying the difference between data and information. Note the graph on the left has no quantitative labels on the vertical axis; the vertical scale on the middle graph ranges only 20 units (20/6000=0.003%) which exaggerates insignificant variations; the scale of the last graph conceals variation in the data. Figure 1-3 Measuring growth of units sold using different axis values

Ethics and Professional Responsibility (cont’d) Ethics Guide Immanuel Kant Categorical imperative One should behave only in a way that one would want the behavior to be a universal law. Are you willing to publish your behavior to the world? How do you want other people to behave?

Ethics and Professional Responsibility (cont’d) Ethics Guide Necessity to act in accordance with categorical imperative. Perfect duty - behavior that must always be met. Imperfect duty - a praiseworthy action, but not required. Giving to charity, developing your business skills and abilities. Stealing cannot be a universal law. Lying is not consistent with the categorical imperative because if everyone lies, words are useless.

Imperfect Duty of Business Professionals Ethics Guide: Ethics and Professional Responsibility Imperfect duties Cultivating your talent is a professional responsibility. Obtaining skills necessary to accomplish your job. Continuing to develop business skills and abilities throughout your career.

MIS in 2027 Most computers won’t look like computers. Smartphones Q1-7 2027? Most computers won’t look like computers. Smartphones 1Gbps network connection, 1 Exabyte storage, Teraflop+ processing power, Connect to any electrical device, Store/stream every song and movie ever made to any device, Battery life over a month on a single charge. Everyday items now have embedded computers to collect data and interact over the Internet. Look for opportunities to include networked computers into products you’re making, marketing, or selling. Who will be the big winners? Students. Publishers will sell innovative content over the Kindles-to-be that could eliminate used books. Students will pay $40 instead of $140 for a textbook, while book resellers will lose. If you can learn on your own, why go to a traditional campus or classroom when you could learn from an online class for $3,500 per year?

Technology in 2027 (cont’d) Q1-7 2027? BYOD common. Comprehensive bio-monitoring devices at home, linked to health care systems. Widespread use of Google Glass or Microsoft’s HoloLens. More people work at home or wherever. Knowledge and use of business information systems will be more important, not less. What impact will these have on new products and services? Structure of organizations? Nature of work and education? Personal privacy? Personal relationships?

Passwords and Password Etiquette Security Guide 10+ characters. Does not contain your user name, real name, or company name. Does not contain a complete dictionary word in any language. Different from previous passwords used. Contains both upper- and lowercase letters, numbers, and special characters (such as ˜ ! @; # $ % ^; &; * ( ) _ +; – =; { } | [ ] \ : “ ; ’ <; >;? , . /) One technique for creating memorable, strong passwords is to base them on the first letter of the words in a phrase.

Passwords and Password Etiquette (cont’d) Security Guide Never write down your password. Never ask someone for their password. Never give your password to someone. “do-si-do” move—move away so another person can enter password privately. Common professional practice. You are a protector of your employer's information system, customer, supplier, and your personal data.

Five-Component Careers Career Guide   Hardware Software Data Procedures People Sales & Marketing Vendors (IBM, Cisco, etc.) Vendors (Microsoft, Oracle, etc.) Vendors (Acxiom, Google, etc.) Vendors (SAP, Infor, Oracle) Recruiters (Robert Half, Lucas Group) Support Vendors Internal MIS Database administration Security Vendors and internal customer support Customer support Training Development Computer engineering Internal MIS Application programmer Quality test Engineer Data modeler Database design Business process management Process reengineering Training Internal MIS recruiting Management Internal MIS Data administration Project management Technical management Consulting Project management, development, pre- and postsale support GOALS Motivate students for study in this course and in others by reminding them of the need to prepare for jobs now. Employment will not necessarily be easy. Broaden students’ perspectives about MIS careers. Many exciting jobs other than programmer or hardware specialist exist. Make students aware that a lot of interesting jobs that require MIS skills are not necessarily “computer” jobs. Professional sales is one, for example. Reinforce the five-component model and show students another way they can use it to guide their thinking.

Active Review Q1-1 Why is Introduction to MIS the most important class in the business school? Q1-2 How will MIS affect me? Q1-3 What is MIS? Q1-4 How can you use the five-component model? Q1-5 What is information? Q1-6 What are necessary data characteristics? Q1-7 2027?

zulily What is the business model? Flash sales to mothers: Case Study 1 What is the business model? Flash sales to mothers: Children’s clothes, toys, women’s clothes, accessories, and décor items. IT provides entertaining shopping experience, name brand goods, unique and difficult-to-find off-brands, at substantial discounts. 45% of sales over mobile devices. Curated sales. Point of case: You should learn to assess, evaluate, and apply emerging information technology to business. Curated sales are items specifically selected and grouped by its shopping experts that are targeted at women.

zulily (cont’d) Case Study 1 Figure 1-11 zulily Merchandise Variety Courtesy of zulily Inc. Used by permission

zulily (cont’d) Case Study 1 2010 2011 2012 2013 2014 Number of active customers (thousands) 157 791 1580 3,200 4,900 Revenue (millions) $18 $143 $331 $696 $1,200 Sales per active customer $117 $180 $210 $218 $245 Effects of curated sales Figure 1-13 zulily Performance Courtesy of zulily Inc. Used by permission

zulily (cont’d) How did they do it? Case Study 1 How did they do it? Buyers identify goods to be sold, negotiate with vendors. Photographs sample items in-house, write ad copy. Group items for 3-day sales events. After event closes, zulily orders items from vendor, receives, packages, and ships to customers (maintains no inventory). Vulnerable to vendor’s errors and mistakes.

zulily (cont’d) Use of Technology at zulily Case Study 1 Use of Technology at zulily “Continual innovation through investment in technology is core to our business.” Internet, mobile technology compatibility. Developed a proprietary technology platform to handle. Enormous spikes in web processing demand. Extensive data collection and analytics capabilities.

zulily (cont’d) Growth-management problems Case Study 1 Growth-management problems Must effectively integrate, develop and motivate a large number of new employees, while maintaining corporate culture. Continue to make substantial investments to expand merchandising and technology personnel. Need to hire mid-level managers. Finding and retaining merchandising and technology personnel difficult.

zulily (cont’d) Lessons Learned Case Study 1 Lessons Learned Technology zulily uses not ground breaking. Developed innovative application of information systems technology. Applied it to a business opportunity. Managerial skill to develop that idea. Use questions at end of case.