1. Dr. Chen, Management Information Systems 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 1

2. Dr. Chen, Management Information Systems 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. Opening Scenario: Fired? Why? 2

3. 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?

4. Dr. Chen, Management Information Systems Why Information Systems? “Chaotics” Globalization and __________ are the two main forces 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 technology 4

5. Dr. Chen, Management Information Systems Top-Ten Innovation Mistakes a Company Can Make During a Turbulent Economy Fire talent. __________________ Reduce risk. Stop product development. Allow boards to replace growth-oriented CEOs with cost- cutting CEOs. Retreat from globalization. Allow CEOs to replace innovation as key strategy. Change performance metrics. Reinforce hierarchy over collaboration. Retreat into walled castle. 5 Cut back on technology.

6. Dr. Chen, Management Information Systems 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

7. Dr. Chen, Management Information Systems 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. First Reason Introduction MIS Most Important 7

8. Dr. Chen, Management Information Systems 2.The only job security that exists is “a marketable skill and the courage to use it.” Because cost of data storage and data communications is essentially zero, any routine skill can and will be outsourced to the lowest bidder. Second Reason Introduction MIS Most Important 8 - Learning -Learning to Learn and -Learning to Change What is the only entity that remained unchanged in the “Business”?

9. Dr. Chen, Management Information Systems “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 21 st Century at Work. RAND Corporation, 2004, p. xiv ) What are your marketable skills? How Can I Attain Job Security? 9 “Capacity to Learn” Develop non-routine cognitive skills and ability Knowledge and skills are your job security Ability to cope with rapid technological change

10. Dr. Chen, Management Information Systems How Can Intro to MIS Help You Learn Nonroutine Skills? Figure 1-2: Examples of Critical Skills for Nonroutine Cognition 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

11. 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. 11

12. Dr. Chen, Management Information Systems 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: Third Reason Introduction to MIS the Most Important Class in the Business School? 12 “The speed of a computer doubles every 18 months,” which is incorrect, but captures the sense of principle.

13. Dr. Chen, Management Information Systems Ratio of Price to Performance of Computers 13

14. Dr. Chen, Management Information Systems Consequences Moore’s Law YouTube iPad Facebook Woot.com Pandora Twitter LinkedIn Foursquare What happens when data storage and communications costs are essentially zero? Are There Cost-Effective Business Applications of Facebook and Twitter? (see next slide)

15. Dr. Chen, Management Information Systems 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? Are There Cost Effective Business Applications of Facebook and Twitter? 15 ________ADVANTAGE – related to Moore’s Law? FREE

16. Dr. Chen, Management Information Systems 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?” Achieving Business Goals and Objectives 16 Information systems exist to help people in business achieve the goals and objectives of that business

17. 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?

18. Dr. Chen, Management Information Systems 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. What is MIS? 18

19. Dr. Chen, Management 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 Management and Use of Information Systems 19

20. Dr. Chen, Management Information Systems Information systems components (video link)(video link)  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 What is MIS? Figure 1-3 Five Components of an Information System 20 what is the direction of degree of difficulty?

21. Dr. Chen, Management Information Systems 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.) Q2: What Is MIS? (Summary)

22. 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?

23. Dr. Chen, Management Information Systems How Can You Use the Five-Component Framework? Figure 1-4 Characteristics of the Five Components 23 The Most Important Component – Quality of your thinking Change the way your brain works Know how to use information systems YOU [Video]Video

24. Dr. Chen, Management Information Systems Five IS components evaluated based on order of ease of change and amount of organizational disruption. 1.Hardware is simple to order and install. 2.Obtaining or developing new programs is more difficult. 3.Creating new databases or changing structure of existing databases is more difficult. 4.Changing procedures, requiring people to work in new ways, is even more difficult. 5.Changing personnel responsibilities and reporting relationships and hiring and terminating employees are both very difficult and very disruptive. Components Ordered by Difficulty and Disruption 24 - create competitive advantage as they are more difficult to be replicated/replaced.

25. Dr. Chen, Management Information Systems Q3: How Can You Use the Five- Component Model? (Summary) Consider high-tech vs. low-tech alternatives Understand scope of new systems Remember components ordered by difficulty and disruption

26. 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.16- 17) 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.

27. 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?

28. Dr. Chen, Management Information Systems IS vs. IT IS = IT ? Why? 28

29. Dr. Chen, Management Information Systems Components of Information Systems (MIS/IS) – Components of Information Systems (MIS/IS) – Managerial Perspective ORGANIZATIONSTECHNOLOGY MANAGEMENT INFORMATION SYSTEMS SYSTEMS Dr. Chen, The Challenge of the Information Systems Technology TM -29 29

30. Dr. Chen, Management Information Systems 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. 30

31. Dr. Chen, Management 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. Difference Between Information Technology and Information Systems? 31 - competitive advantage since they are difficult to be replaced/replicated.

32. Dr. Chen, Management Information Systems How can you enjoy/apply MIS... To _________the information content of the data, to _________the valuable information in a user-friendly, intuitive, and easy to understand way, and to ________ knowledge workers of today and tomorrow. 32 improve present empower

33. Dr. Chen, Management Information Systems Roles of Information Systems Automates Innovates/ Transforms Innovates/ Transforms Informates 33

34. Dr. Chen, Management Information Systems Q4: Why Is Difference Between IT and IS Important? (Summary) Can buy or lease hardware, software licenses, databases and predesigned procedures People require training, overcoming employees’ resistance to change, managing employees using new system IS = IT + Procedures + People (text) Avoid common mistake: You cannot buy an IS IS = IT + Management + Organization

35. 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. 35

36. 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?

37. 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

38. Dr. Chen, Management Information Systems What Is Information? Does this graph contain information?

39. Dr. Chen, Management Information Systems Figure (Extra) Which is data? Information?Context Change Process 39

40. Dr. Chen, Management Information Systems 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 40 Users really want is –Information

41. Dr. Chen, Management Information Systems What is Information ? DATA Information is refined data. INFORMATION What is 80/20 rule? How to apply it to this scenario?

42. Dr. Chen, Management Information Systems What is Information ? DATA INFORMATION 80% of information/ valuable output Trivial many (80%)? or Vital few (20%)? Other business example?

43. Dr. Chen, Management Information Systems DATA, INFORMATION, AND KNOWLEDGE 43

44. Dr. Chen, Management Information Systems The relationships between data, information, and knowledge. Data More human contribution Greater value Information Data endowed with relevance and purpose Requires unit of analysis Needs consensus on meaning Human mediation necessary Often garbled in transmission Knowledge Valuable information from the human mind; includes reflection, synthesis, context Hard to transfer Often tacit Hard to capture electronically Hard to structure Highly personal to the source DataInformation Knowledge Data Simple observation of states of the world Easily captured Easily structured Easily transferred Compact, quantifiable 44

45. Dr. Chen, Management Information Systems Value Chain Data of the Enterprise Data Wisdom refers to our effective use of intelligence (or knowledge), intelligence refers to our effective use of knowledge. “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. 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. InformationKnowledgeIntelligence Wisdom 45

46. Dr. Chen, Management Information Systems 100 Years ago... Today... n Industrial Revolution changed the World Information Revolution! 46

47. Dr. Chen, Management Information Systems 100 Years ago... Today... n Industrial Revolution changed the World Information Revolution! 47

48. Dr. Chen, Management Information Systems Industry Evolution (mid 1770s) Steam Engine Rail Road (1829, change concept of distance) Information Evolution (late 1990s) Computer Impact on: Economy, Politics, Social change Internet (1990, ??? Distance) N 48

49. Dr. Chen, Management Information Systems More Information ? More information is not profitable unless it is relevant information. Executives will need information in the future if their companies are to be competitive. better 49

50. Dr. Chen, Management Information Systems Information … BAD information is WORSE than... NO information. 50

51. 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?

52. Dr. Chen, Management Information Systems 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. What Makes Some Information Better than Other Information? 52

53. Dr. Chen, Management Information Systems 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. 53

54. Dr. Chen, Management Information Systems Content Dimension Form Dimension Time Dimension Attributes of Information Quality Timeliness Currency Frequency Time Period Clarity Detail Order Presentation Media Accuracy Relevance Completeness Conciseness Scope performance 54

55. Dr. Chen, Management Information Systems 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)

56. Dr. Chen, Management Information Systems END of CHAPTER 1 56