Essentials of Management Information Systems Chapter 1 PDF

Essentials of Management Information Systems Fourteenth Edition, Global Edition Chapter 1 Business Information Systems in Your Career Copyri...

Essentials of Management Information Systems Fourteenth Edition, Global Edition Chapter 1 Business Information Systems in Your Career Copyright © 2020 Pearson Education Ltd.  Management Information Systems Chapter 1: Business Information Systems in Your Career Perspectives on Information Systems Dimensions of a system: (System = big team.) -> OMT – Organizational: 1.Service Levels (Making Customers Happy) 1. Do kids like the toys? Procedures for tracking packages 2. Are the toys strong, or do they break fast? 3. Do workers help customers find what they need? and managing inventory 2.✅ Example: If many kids say a toy breaks too fast, the store finds a stronger one. 3.Costs (Saving Money) 1. Is the store spending too much to buy toys? and provide information 2. Is packaging or delivery too expensive? 4.✅ Example: If gift wrapping costs too much, the store uses a cheaper option. – Management: ( PLOC) The store must keep customers happy while not wasting money to stay in business! Monitor service levels and costs – Technology: Handheld computers, bar-code scanners, networks, desktop computers, and so on 1.2 Take Etisalat as an example. Or TOYS  Management Information Systems Chapter 1: Business Information Systems in Your Career The Interdependence Between Organizations and Information Technology Q. Components of IS is: - Software - Hardware - Telecommunications - Data management (SHTD) Figure 1.2 In contemporary systems there is a growing interdependence between a firm’s information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do. 1.3  Management Information Systems Chapter 1: Business Information Systems in Your Career Perspectives on Information Systems T Technology dimension of information systems – Computer hardware and software – Data management technology – Networking and telecommunications technology Networks, the Internet, intranets and extranets, World Wide Web – IT infrastructure: provides platform that system is built on 1.4  Management Information Systems Chapter 1: Business Information Systems in Your Career T Perspectives on Information Systems Information system: – Set of interrelated components – Collect, process, store, and distribute information – Support decision making, coordination, and control Information vs. data – Data are streams of raw facts. – Information is data shaped into meaningful form. 1.5  Management Information Systems Chapter 1: Business Information Systems in Your Career T Data and Information Figure 1.3 Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for a specific store or sales territory. 1.6  Management Information Systems Chapter 1: Business Information Systems in Your Career T Perspectives on Information Systems (3) Three activities of information systems produce information organizations need… – Input: Captures raw data from organization or external environment – Processing: Converts raw data into meaningful form – Output: Transfers processed information to people or activities that use it 1.7  Management Information Systems Chapter 1: Business Information Systems in Your Career T Perspectives on Information Systems Feedback: – Output is returned to appropriate members of organization to help evaluate or correct input stage. Computer/Computer program vs. information system – Computers and software are technical foundation and tools, similar to the material and tools used to build a house. – So IS is more important than computers/systems. 1.8  Management Information Systems Chapter 1: Business Information Systems in Your Career T Functions of an Information System An information system contains information about an organization and its surrounding environment. Three basic activities—input, processing, and output— produce the information organizations need. Feedback is Output – The system gives the output returned to appropriate Processing – The system processed information to the people or activities in the organizes and turns that data right people. organization to evaluate and into something useful. refine the input. Environmental Input – The system takes in actors, such as customers, information, like orders or suppliers, competitors, inventory data. stockholders, and regulatory agencies, interact with the organization and its Feedback – The system sends information systems. feedback to check if things are working. Figure 1.4 1.9  Management Information Systems Chapter 1: Business Information Systems in Your Career M Levels in a Firm Business organizations are hierarchies consisting of three principal levels: senior management, middle management, and operational management. 🏢 Example: The school principal decides on new rules. Information systems serve each of these levels. Scientists and knowledge workers often work with middle 📋 Example: The teachers organize lessons based on the school’s rules. management. Figure 1.6 🏫 Example: The students and staff follow the rules and do their work 1.10  Management Information Systems Chapter 1: Business Information Systems in Your Career M Perspectives on Information Systems Functional managers: A company is like a big team, where different groups handle different jobs. These groups are called business functions, and each has a functional manager leading it. Sales & Marketing – Finds customers and sells products. 🛒 Example: A toy company advertises and sells new action – Separation of business functions figures. Sales and marketing Human Resources (HR) – Manages employees. 👥 Example: HR hires new workers and helps with salaries. Human resources Finance & Accounting – Handles money and budgets. Finance and accounting 💰 Example: Keeps track of how much the company earns and spends. Manufacturing and production Manufacturing & Production – Makes the product. 🏭 Example: A factory produces the toys. – Unique business processes – * a specific unique⭐ Example: process Researchbut & Development not (R&D) for all– Creates new ideas and products. companies. 🔬 Example: A tech company invents a new type of phone. – Ex. Research and Each dev.function works separately, but together, they help the company succeed! 1.11  Management Information Systems Chapter 1: Business Information Systems in Your Career M Perspectives on Information Systems Management dimension of information systems – Managers set organizational strategy for responding to business challenges. – Managers are evaluated on performance. – In addition, managers must act creatively: Creation of new products and services Occasionally re-creating the organization 1.12  Management Information Systems Chapter 1: Business Information Systems in Your Career T Perspectives on Information Systems Business perspective on information systems: – Information system is instrument(magic tool) for creating value – Investments in information technology will result in superior returns: – 💰 Investing in technology helps businesses: Productivity increases Work faster (🚀 Productivity increases) Revenue increases Make more money (💵 Revenue increases) Superior long-term strategic positioning Stay ahead of 1.13 competitors (🏆 Better long-term strategy)  Management Information Systems Chapter 1: Business Information Systems in Your Career T Perspectives on Information Systems Business information value chain – Raw data acquired and transformed through stages that add value to that information – Value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits Business perspective: – Calls attention to organizational and managerial nature of information systems – The business perspective reminds us that information systems don’t just use technology—they also depend on 1.14  Management Information Systems Chapter 1: Business Information Systems in Your Career T The Business Information Value Chain Figure 1-7 From a business perspective, information systems are part of a series of value-adding activities for acquiring, transforming, and distributing information that managers can use to improve decision making, enhance organizational performance, and, ultimately, increase firm profitability. 1.15  Management Information Systems Chapter 1: Business Information Systems in Your Career T The Role of Information Systems in Business Today Growing interdependence between ability to use information technology and ability to implement corporate strategies and achieve corporate goals Business firms invest heavily in information systems to achieve six strategic business objectives: 1. Operational excellence 2. New products, services, and business models 3. Customer and supplier intimacy 4. Improved decision making 5. Competitive advantage 6. Survival 1.16  Management Information Systems Chapter 1: Business Information Systems in Your Career O The Role of Information Systems in Business Today Operational excellence: – Improvement of efficiency to attain higher profitability= more money. – Information systems, technology an important tool in achieving greater efficiency and productivity – Walmart’s Retail Link system links suppliers to stores for superior replenishment system 1.17  Management Information Systems Chapter 1: Business Information Systems in Your Career T The Role of Information Systems in Business Today New products, services, and business models: – Business model: describes how company produces, delivers, and sells product or service to create wealth – Information systems and technology a major enabling tool for new products, services, business models Examples: Apple’s iPad, Google’s Android OS, and Netflix 1.18  Management Information Systems Chapter 1: Business Information Systems in Your Career The Role of Information Systems in Business Today Customer and supplier intimacy ‫موده‬: – Serving customers well leads to customers returning, which raises revenues and profits. Example: High-end hotels that use computers to track customer preferences and used to monitor and customize environment – Intimacy with suppliers allows them to provide vital inputs, which lowers costs. Example: JCPenney’s information system which links sales records to contract manufacturer CPenney uses a system that connects sales records to manufacturers. When something sells out, the system tells the manufacturer to make more and send it to the store. This keeps the shelves stocked and ready for customers! 1.19 19  Management Information Systems Chapter 1: Business Information Systems in Your Career The Role of Information Systems in Business Today Improved decision making – Without accurate information: (bad) Managers must use forecasts, best guesses, luck Results in: – Overproduction, underproduction – Misallocation of resources – Poor response times Poor outcomes raise costs, lose customers – Example: Verizon’s Web-based digital dashboard to provide managers with real-time data on customer 1.20 complaints, network performance, line  Management Information Systems Chapter 1: Business Information Systems in Your Career The Role of Information Systems in Business Today Competitive advantage – Delivering better performance – Charging less for superior products – Responding to customers and suppliers in real time – Examples: Apple, Walmart, UPS 1.21  Management Information Systems Chapter 1: Business Information Systems in Your Career The Role of Information Systems in Business Today Survival – Information technologies as necessity‫ حاجه‬of business – Industry-level changes Example: Citibank’s introduction of ATMs Citibank’s ATMs – Introduced to make banking easier and stay ahead in the market. – Governmental regulations (LAWS) requiring record-keeping Examples: Toxic Substances Control Act, Sarbanes- 1.22 Oxley Act  Management Information Systems Chapter 1: Business Information Systems in Your Career Perspectives on Information Systems Investing in information technology does not guarantee good returns. = ex. UAEU using apple resources but eventually damaged by weather. There is considerable variation in the returns firms receive from systems investments. Factors: Factors That Affect How Much a Company Earns from Technology Investments: – Adopting the right business model – Investing in complementary assets (organizational and management capital) 1.23