1. Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CHAPTER ONE MANAGEMENT INFORMATION SYSTEMS: BUSINESS DRIVEN MIS [Edited by Dr. Yüe “Jeff” Zhang, CSUN] CHAPTER ONE MANAGEMENT INFORMATION SYSTEMS: BUSINESS DRIVEN MIS [Edited by Dr. Yüe “Jeff” Zhang, CSUN]

2. 1-2 Key Concepts I Hope You Establish  Businesses today rely heavily on IS (Info Sys)  IS allows companies to remain competitive Tech supports existing strategy – “alignment” Emerging tech leads to new strategic directions  Organizations must adapt to tech advances to keep pace w rapidly changing environment  Companies should have a solid business reason for implementing technology http://www.youtube.com/watch?v=zIEIvi2MuEk

3. 1-3 COMPETING IN THE INFORMATION AGE  Examples of the power of business and technology Amazon – Not a tech company; primary business focus is selling books Netflix – Not a tech company; primary business focus is renting videos Zappos – Not a tech company; primary biz focus is selling shoes  http://en.wikipedia.org/wiki/Zappos#Products http://en.wikipedia.org/wiki/Zappos#Products

4. 1-4 Biz Environment: “The World is Flat” - Thomas Friedman’s Ten Flatteners 1.Fall of the Berlin Wall 2.Netscape goes public 3.Development of work-flow software 4.Uploading/open sourcing 5.Outsourcing 6.Offshoring 7.Supply Chaining 8.In-sourcing 9.In-forming 10.The Steroids

5. 1-5 Flattener #1: Fall of the Berlin Wall November 9, 1989. Walls between the two “camps” collapsed  No barriers against trade, exchange of personnel, flow of info

6. 1-6 Flattener #2: Netscape Goes Public – Aug 9, 1995 Marc Andreessen [then at U Illinois] (wrote Mosaic browser and later Netscape browser) “Prehistoric time”: Gopher (U Minnesota) April 22, 1993

7. 1-7 Flattener #4: Uploading What can we say about the manner of info flow with uploading?

8. 1-8 Flattener #7: Supply Chaining

9. 1-9 Flattener #9: Informing It’s not just In-Forming is to individuals what outsourcing, offshoring, and in-sourcing is to companies Individuals have access to massive amounts of information – Q: more than just the amount?

10. 1-10 COMPETING IN THE INFORMATION AGE  The core drivers of the information age: The power and value of - Data Information Knowledge Business intelligence

11. 1-11 Comparison of data and info (relative) PerspectivesData Information W.r.t. processing Logic / order Analysis Biz meaning Value

12. 1-12 THE CHALLENGE: DEPARTMENTAL COMPANIES Common Departments Working Independently

13. 1-13 Common Departments Working Interdependently THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS

14. 1-14 Info Sys wrt/along w Biz Evolution  Early info sys:  Modern info sys:  Current IS characteristics: Degree of connection Types of connection Variety of tools Specialty vs integration New issues:…? Business Info Sys Evolve s with Rides, Drives

15. 1-15 THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS  Systems thinking – A way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs while continuously gathering feedback on each part

16. 1-16 THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS  Systems thinking – Zhang compiled: 1.Components are interrelated 2.System has an objective; components work together to achieve system’s objective 3.“1+1>2” – system’s output is larger than the sum of the outputs of its components 4.Pursuing system’s optimal output precedes the output of some components

17. 1-17 THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS Management Information Systems (MIS) –  A business function,  like accounting and human resources,  which moves information about people, products, and processes across the company  to facilitate decision-making and problem-solving Operation (running biz)  And connects people for Org culture, and Generation of new ideas

18. 1-18 The Role of the IS Department (P. 13: various important IS/IT positions) 1.Align w biz strategy; formulate IS strategy 2.Develop and renew IS architecture 3.Develop tech solutions that ENABLE biz strategy {existing; ______ } 4.Deliver IT services and supports to achieve biz goals {training; _________ } 5.IT-related risk, security, compliance Evolution of IT dept’s mindset:

19. 1-19 IDENTIFYING COMPETITIVE ADVANTAGES  Business strategy – A leadership plan that achieves a specific set of goals or objectives such as  Developing new products or services  Entering new markets  Increasing customer loyalty  Attracting new customers  Increasing sales

20. 1-20 Information System Components of IS; IS in Business (Figure by Zhang) People Hardware SoftwareData Hardware Network Procedure Corp Strategy Use © 1997-2014, Yüe “Jeff” Zhang

21. 1-21 IDENTIFYING COMPETITIVE ADVANTAGES  Competitive advantage – A product or service that an organization’s customers place a greater value on than similar offerings from a competitor  First-mover advantage – Occurs when an organization can significantly impact its market share by being first to market with a competitive advantage

22. 1-22 IDENTIFYING COMPETITIVE ADVANTAGES  Competitive intelligence –The process of gathering information about the competitive environment to improve the company’s ability to succeed  Competitive intelligence tools Porter’s Five Forces Model Porter’s Three Generic Strategies Porter’s Value Chain Analysis

23. 1-23 THE FIVE FORCES MODEL – EVALUATING INDUSTRY ATTRACTIVENESS Porter’s Five Forces Model

24. 1-24 Competitive Forces (Graphical representation developed by Yüe Zhang) Company Competitors Suppliers Customers Substitutes New entrants Figure © 1997-2014, Yüe “Jeff” Zhang

25. 1-25 THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS Porter’s Three Generic Strategies

26. 1-26 2-26 IS Impact on Competitive forces (compiled by Zhang) (Think about your own examples) Comp Forces Implication for FirmUse of IS to combat force Traditional rivals Comp in price, product distribution, and service ERP  reduce cost, act quickly; Web  service Customer power reduced price, increased qual, demand for more services CRM  serve better; CAD/CAM  improved quality Supplier power Price raised, reduced qualityNet  closer ties; relate w new suppliers far away New entrants increased cap, reduced price, decreased market share Web  reach, differentiate product; inv ctrl sys  lower costs Substitutes Returns; decreased market share; losing customers DSS & customer purchase DB  trends & needs; CAD  redefine products CAD – computer-aided design; CAM - com-aid manufacturing; DB - database

27. 1-27 2-27 Strategic approaches to cope w competitive forces [Nickerson] 1 3 4 5 6 2

28. 1-28 Strategies for Competitive Advantage (Think about your own examples) Cost Leadership Differentiation Innovation Operational Effectiveness Customer-orientation

29. 1-29 2-29 Priceline.com: “Name your own price”

30. 1-30 Panera Bread – what approach? 2-30

31. 1-31 VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES  Business process – A standardized set of activities that accomplish a specific task, such as a specific process  Value chain analysis – Views a firm as a series of business processes that each add value to the product or service

32. 1-32  http://www.propmi-limited.com/blog/about-us/how-we-work/ http://www.propmi-limited.com/blog/about-us/how-we-work/

33. 1-33 VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES Porter’s Value Chain

34. 1-34 VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES Value Chain and Porter’s Five Forces Model

35. 1-35 Efficiency and effectiveness metrics to measure the impact of IT 1.Speed 2.Throughput 3.Performance 【 Suggest: reliability 】 4.Scalability 5.Net Present Value (NPV) 6.Return on Investment (ROI) 7.Total Cost of Ownership (TCO) “Time axis” Indicators ; measures

36. 1-36 IT as enabler of business Enabler: Making it possible to take a business endeavor/initiative  that would not have been possible without the IT support or facilitation 1.E-commerce 2.Online banking 3.Wireless applications 4.Real-time flight info updates 5.… Read: IT Should be an Enabler to the Business http://www.information-management.com/blogs/IT_business- 10015571-1.html http://www.information-management.com/blogs/IT_business- 10015571-1.html

37. 1-37 Supplement: Traditional Major IS Functions  Managing systems development and systems project management  Managing computer operations  Staffing, training, developing IS skills  Providing technical services  Infrastructure planning, development, control Slides 37, 38, and 39 are related to slide 18: “Roles of the MIS department”

38. 1-38 Supplement: New (Consultative) IS Functions  Initiating and designing strategic information systems  Incorporating the Internet and e-commerce into the business  Managing system integration  Educating non-IS managers about IT  Educating IS staff about the business  Supporting end-user computing  Partnering with executives  Managing outsourcing  Innovate  Ally with vendors and IS departments in other organizations

39. 1-39 Supplement: Supporting End Users One form of end-user support is the help desk, where IS staffers help users troubleshoot problems with their systems. This video shows the first help desk. [fun stuff]first help desk