Management Information Systems - Business Driven MIS

1. CHAPTER ONE
MANAGEMENT INFORMATION SYSTEMS
BUSINESS DRIVEN MIS
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2. CHAPTER ONE OVERVIEW
 SECTION 1.1 – BUSINESS DRIVEN MIS
 Competing in the InformationAge
 The Challenge of Departmental Companies and the MIS Solution
 SECTION 1.2 – BUSINESS STRATEGY
 Identifying Competitive Advantages
 The Five Forces Model – Evaluating Industry Attractiveness
 TheThree Generic Strategies – Choosing a Business Focus
 Value ChainAnalysis – Executing Business Strategies
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3. SECTION 1.1: BUSINESS DRIVEN MIS
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4. LEARNING OUTCOMES
1. Describe the information age and the differences between data,
information, business intelligence, and knowledge
2. Explain systems thinking and how management information systems
enable business communications
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5. COMPETING INTHE INFORMATION AGE
Did you know . . .
 Avatar, the movie, took over 4 yrs to make and cost $450 million
 Lady Gaga’s real name is Joanne Angelina Germanotta
 It costs $2.6 million for a 30-second advertising time slot during the Super Bowl
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6. COMPETING INTHE INFORMATION AGE
 Fact -The confirmation or validation of an event or object
 Information age -The present time, during which infinite quantities of
facts are widely available to anyone who can use a computer
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7. COMPETING INTHE INFORMATION AGE
 Examples of the power of business and technology
 Amazon – Not a technology company; primary business focus was selling books
 Netflix – Not a technology company; primary business focus is streaming content
 Zappos – Not a technology company; primary business focus is selling shoes
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8. COMPETING INTHE INFORMATION AGE
 Internet ofThings (IoT) - A world where
interconnected Internet-enabled devices or
“things” have the ability to collect and share
data without human intervention
 Machine-to-Machine (M2M) - Refers to
devices that connect directly to other devices
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9. COMPETING INTHE INFORMATION AGE
 The core drivers of the information age
 Data
 Information
 Business intelligence
 Knowledge
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10. DATA
 Data - Raw facts that describe the characteristics of an event
or object
 Structured data – Stored in a traditional system such as a
relational database or spreadsheet
 Unstructured data – Not defined and does not follow a
specified format
 Machine-generated data – Created by a machine without human
intervention
 Human-generated data – Data that humans, in interaction with
computers, generate
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11. DATA
 A fundamental role of all business managers is to be able to take the data
and analyze it to find information to make great business decisions
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12. DATA
 Big data – A collection of large, complex data sets, including structured
and unstructured data, which cannot be analyzed using traditional
database methods and tools
 Snapshot – A view of data at a particular point in time
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13. THE POWER OF BIG DATA ANALYTICS
 Four Characteristics of Big Data
 Variety - Different forms of structured and unstructured data
 Veracity - The uncertainty of data, including biases, noise, and abnormalities
 Volume - The scale of data
 Velocity - The analysis of streaming data as it travels around the Internet,
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14. THE POWER OF BIG DATA ANALYTICS
 Big data will create 4.4 million global MIS jobs
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15. THE POWER OF BIG DATA ANALYTICS
STRUCTURED DATA UNSTRUCTURED DATA
Sensor data Satellite images
Weblog data Photographic data
Financial data Video data
Click-stream data Social media data
Point of sale data Text message
Accounting data Voice mail data
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16. INFORMATION
 Information - Data converted into a meaningful and useful context
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17. INFORMATION
 Report - A document containing data organized in a table, matrix, or
graphical format allowing users to easily comprehend and understand
information
 Static report - Created once based on data that does not change
 Dynamic report - Changes automatically during creation
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18. BUSINESS INTELLIGENCE
 Business intelligence - Information collected from multiple sources such
as suppliers, customers, competitors, partners, and industries that
analyzes patterns, trends, and relationships for strategic decision making
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19. BUSINESS INTELLIGENCE
 Analytics – The science of fact-based decision making
 Business Analytics –The scientific process of transforming data into
insight for making better decisions
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20. BUSINESS INTELLIGENCE
 Descriptive analytics –Techniques that describes part performance and
history
 Predictive analytics –Techniques that extract information from data and
uses it to predict future trends and identify behavioral patterns
 Prescriptive analytics –Techniques that create models including the best
decision to make or course of action to take
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21. BUSINESS INTELLIGENCE
 Behavioral analysis
 Correlation analysis
 Exploratory data analysis
 Pattern recognition analysis
 Social media analysis
 Speech analysis
 Text analysis
 Web analysis
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22. KNOWLEDGE
 Knowledge - Skills, experience, and expertise coupled with information
and intelligence that creates a person’s intellectual resources
 Knowledge worker – Individual valued for their ability to interpret and
analyze information
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distribution without the prior written consent of McGraw-Hill Education.

23. THE CHALLENGE:
DEPARTMENTAL COMPANIES
 Common departments working independently
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24. THE MIS SOLUTION
 Common departments working interdependently
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25. THE MIS SOLUTION
 Goods - Material items or products that customer’s will buy to satisfy a
want or need. Clothing, groceries, cell phones, and cars are all examples of
goods that people buy to fulfill their needs
 Cars
 Groceries
 Clothing
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26. THE MIS SOLUTION
 Services -Tasks performed by people that customers’ will buy to satisfy a
want or need
 Teaching
 WaitingTables
 Cutting Hair
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27. SYSTEMSTHINKING
 Production -The process where a business takes raw materials and
processes them or converts them into a finished product for its goods or
services
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28. SYSTEMSTHINKING
 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
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29. SYSTEMSTHINKING
 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
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30. MIS DEPARTMENT
ROLES AND RESPONSIBILITIES
 Chief information officer (CIO) – Oversees all uses of information and
ensures the strategic alignment of MIS with business goals and objectives
 Chief data officer (CDO) – Responsible for determining the types of
information the enterprise will capture, retain, analyze, and share
 Chief technology officer (CTO) – Responsible for ensuring the throughput,
speed, accuracy, availability, and reliability of information
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31. MIS DEPARTMENT
ROLES AND RESPONSIBILITIES
 Chief security officer (CSO) – Responsible for ensuring the security of MIS systems
 Chief privacy officer (CPO) – Responsible for ensuring the ethical and legal use of
information
 Chief knowledge officer (CKO) - Responsible for collecting, maintaining, and
distributing the organization’s knowledge
 Chief intellectual property officer
 Chief automation officer
 Chief sustainability officer
 Chief user experience officer
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32. SECTION 1.2: BUSINESS STRATEGY
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33. LEARNING OUTCOMES
3. Explain why competitive advantages are temporary
4. Identify the four key areas of a SWOT analysis
5. Describe Porter’s Five Forces Model and explain each of the five forces
6. Compare Porter’s three generic strategies
7. Demonstrate how a company can add value by using Porter’s value
chain analysis
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34. 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
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35. IDENTIFYING COMPETITIVE ADVANTAGES
 Stakeholder’s Interests
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36. 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
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37. IDENTIFYING COMPETITIVE ADVANTAGES
 Business tools for analyzing business strategies
 SWOT analysis – Evaluates Project Position
 Five Forces Model – Evaluates IndustryAttractiveness
 Three Generic Strategies – Chose Business Focus
 Value Chain Analysis – Executes Business Strategy
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38. SWOT ANALYSIS
 A SWOT analysis evaluates an organization’s strengths, weaknesses,
opportunities, and threats to identify significant influences that work for or
against business strategies
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distribution without the prior written consent of McGraw-Hill Education.

39. THE FIVE FORCES MODEL –
EVALUATING INDUSTRY ATTRACTIVENESS
 Five Forces Model
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40. BUYER POWER
 Buyer power –The ability of buyers to affect the price of an item
 Switching cost – Manipulating costs that make customers reluctant to switch to
another product
 Loyalty program – Rewards customers based on the amount of business they
do with a particular organization
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41. SUPPLIER POWER
 Supplier power –The suppliers’ ability to influence the prices they charge
for supplies
 Supply chain – Consists of all parties involved in the procurement of a
product or raw material
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42. THREAT OF SUBSTITUTE
PRODUCTS OR SERVICES
 Threat of substitute products or
services – High when there are many
alternatives to a product or service and
low when there are few alternatives
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43. THREAT OF NEW ENTRANTS
 Threat of new entrants – High when it is easy for new competitors to
enter a market and low when there are significant entry barriers
 Entry barrier – A feature of a product or service that customers have come to
expect and entering competitors must offer the same for survival
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44. RIVALRY AMONG EXISTING COMPETITORS
 Rivalry among existing competitors – High when competition is fierce in
a market and low when competitors are more complacent
 Product differentiation – Occurs when a company develops unique differences
in its products or services with the intent to influence demand
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45. STRONG ANDWEAK EXAMPLES OF
PORTER’S FIVE FORCES
WEAK FORCE:
DECREASES COMPETITION
OR FEW COMPETITORS
STRONG FORCE:
INCREASES COMPETITION
OR LOTS OF COMPETITORS
BUYER POWER
An international hotel chain
purchasing milk
A single consumer purchasing
milk
SUPPLIER POWER
A company that makes airline
engines
A company that makes pencils
THREAT OF SUBSTITUTE
PRODUCTSOR SERVICES
Cancer drugs from a
pharmaceutical company
Coffee from McDonald’s
THREAT OF NEW
ENTRANTS
A professional hockey team A dog walking business
RIVALRYAMONG EXISTING
COMPETITORS
Department of MotorVehicles A coffee shop
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46. ANALYZINGTHE AIRLINE INDUSTRY
 Perform a Porter’s Five Forces analysis of each of the following for a
company entering the commercial airline industry
 Buyer power
 Supplier power
 Threat of substitute products/services
 Threat of new entrants
 Rivalry among competitors
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47. THETHREE GENERIC STRATEGIES
CHOOSING A BUSINESS FOCUS
 Porter’sThree Generic Strategies
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48. THETHREE GENERIC STRATEGIES
CHOOSING A BUSINESS FOCUS
 Porter’sThree Generic Strategies
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49. 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
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50. VALUE CHAIN ANALYSIS – EXECUTING
BUSINESS STRATEGIES
 Primary value activities
 Inbound logistics - Acquires raw materials and resources, and distributes
 Operations -Transforms raw materials or inputs into goods and services
 Outbound logistics - Distributes goods and services to customers
 Marketing and sales - Promotes, prices, and sells products to customers
 Service - Provides customer support
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51. VALUE CHAIN ANALYSIS – EXECUTING
BUSINESS STRATEGIES
 Support value activities
 Firm infrastructure – Includes the company format or departmental structures,
environment, and systems
 Human resource management – Provides employee training, hiring, and
compensation
 Technology development – Applies MIS to processes to add value
 Procurement – Purchases inputs such as raw materials, resources, equipment,
and supplies
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52. VALUE CHAIN ANALYSIS – EXECUTING
BUSINESS STRATEGIES
 Porter’sValue Chain
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53. VALUE CHAIN ANALYSIS – EXECUTING
BUSINESS STRATEGIES
 Value Chain and Porter’s Five Forces Model
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54. LEARNING OUTCOME REVIEW
 Now that you have finished the chapter please review the learning
outcomes in your text
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