MIS INFORMATION SYSTEMS: AN OVERVIEW TJX Credit Card Breach Fed Ex CHAPTER 1 INFORMATION SYSTEMS: AN OVERVIEW TJX Credit Card Breach Hossein BIDGOLI Fed Ex Cyrus NFL Coaches

Chapter 1 Information Systems: An Overview l e a r n i n g o u t c o m e s 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.

l e a r n i n g o u t c o m e s (cont’d.) 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.

Value of IS Knowledge in Different Careers Accounting Use IS more than any other non IS field Finance Access to funds Where to invest ----Can be heavily analytical Marketing Sales force automation SFA Geographic IS CRM HR HRM , payroll, benefits Operations SCM CAD/CAM Media & Communications Intranets Digital rights management systems

What is a system?

What is an Information System? Combinations of hardware, software, and telecommunications networks that people build and use to collect, create and distribute useful data, typically in organizational settings. Input of Data Resources Processing Output of Information Products Control of System Performance Storage of Data Resources Describe some The university grades, financial, maintence, computer, etc Retail business system margin sales etc Input read barcode Process add up total scanned Output cash register receipt may be input into another system Feedback form to correct price reactive – oerder inventory proactive -forcasting How long have info systems been around Bible or pyramids Canada 1876 1920 treaties Look at sytems as technical or behavoril or both sociotechnical

Knowledge Worker Knowledge Worker (Peter Drucker 1959) 1960 2000 Knowledge Worker (Peter Drucker 1959) Professionals that create, modify and/or synthesize information as a fundamental part of their job They will require higher education levels and received higher compensation than workers in agriculture or manufacturing At least 35% of all workers in Canada are knowledge workers As a knowledge worker of the future, computers and information technology will help you be more effective and productive, no matter what profession you choose.

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”

TJX Companies, Inc.: Credit Card Breach January 2007 Identity thieves stole more than 46.5 million credit cards Used sophisticated hacking techniques to break through security systems Stored the stolen information on servers in Eastern Europe and the United States Shows the international nature of cybercrime TJX Credit Card Breach

Computer Literacy and Information 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

The Beginning: Transaction Processing Systems Transaction processing systems (TPSs) Focus on data collection and processing, Cost reduction Operations repetitive Human involvement minimal Fed Ex

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

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

Major Components of an Information System Data Database Process Information

Data Data Sources of data Time orientation Input to the system Sources of data External Internal Time orientation Can be collected in different forms Aggregated Disaggregated 414712905 SIN 414-712-905 ATM

Database Database Essential for the success of any information system 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

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 The purpose of an information system's process  component is generating the most useful type of information for decision making. This component generally includes transaction-processing reports and models for decision analysis that can be built into the system or accessed from external sources. An information system can include a wide range of models to support all levels of decision making. Users should be able to query an information system and generate a variety of reports. In addition, an information system should be able to grow with the organization so that users can redefine and restructure models and incorporate new information into their analyses.

Information Information Quality of 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

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)

Example of Information Systems a university The university stores all student data in a database Built-in query capability Other types of analysis can be done

six major roles and goals of IT 1. Increase employee productivity by reducing time, errors and costs using 2. Enhance decision making 3. Improve team collaboration 4. Create business partnerships and alliances 5. Enable global reach all over the world taking into consideration the culture of each nation or society. 6. Facilitate organizational transformation as the organization evolves and responds to the ever-changing marketplace.

Using Information Systems and Information Technologies Achieve goals of information systems Examples Internet Databases POS Systems RFID tags

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

The Importance of Information Systems Second most important resource in any organization Four Ms of resources: Manpower >> Personnel info system Machinery >> Manufacturing Info System Materials >> Logistics info system Money >> Financial Info system

Competitive advantage 1831 Cyrus McCormick Competitive advantage Significant, long-term benefit to a company over its competition Ability to establish and maintain a competitive advantage is vital to a company’s success Went on to become International harvester

NFL Coaches NFL Coaches What sources of competitive advantage can you identify the New England Patriots have by using information technology? Are these long term, sustainable competitive advantages? From our list of Roles and goals of Technology, what does the IS of the NFL do?

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

Using Information Technologies for a Competitive Advantage Differentiation strategies Make products and services different from competitors Examples: Apple, Amazon.com Focus strategies Concentrate on a specific market segment Attempt to achieve a cost or differentiation advantage Examples: Apple, Abercrombie & Fitch, Nordstrom

Porter’s Five Forces Model: Understanding the Business Environment 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

THE FIVE FORCES MODEL – analyze competitive forces in an Industry How IS can have a factor in the industry

The IT Job Market Chief Technology Officer Manager of Info System Services Systems Analyst Network Administrator Database Administrator Computer Programmer Webmaster

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

Future Outlooks (cont'd.) Internet growth and acceptance will continue Computer criminals will become more sophisticated Protecting personal identity information will become more difficult

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