Chapter 1 Full Management Information Systems PDF

Week – 01 MANAGEMENT INFORMATION SYSTEMS BUSINESS DRIVEN MIS © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 1  2...

Week – 01 MANAGEMENT INFORMATION SYSTEMS BUSINESS DRIVEN MIS © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 1  2 WEEK ONE OVERVIEW  BUSINESS DRIVEN MIS Competing in the Information Age The Challenge of Departmental Companies and the MIS Solution © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 2 BUSINESS DRIVEN MIS © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 3 PCL Construction: The New Digital Firms PCL is a group of independent general contracting construction companies, with over 4,400 employees in the United States, Canada, and Australia. The organization is active in the commercial, institutional, multifamily residential, renewable energy, heavy industrial, historical restoration, and civil construction sectors. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved PCL Construction: The New Digital Firm Business Challenges – Widespread operations – Paper intensive processes – Difficulty in locating documents – Difficulty in keeping project documentation up to date. Solutions (IT transformed the way of doing business) – Mobile devices – Touch screen kiosks – Microsoft Azure Cloud – Virtual design and project management Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved PCL Construction: The New Digital Firm PCL Construction plans are now in digital form, or the paper versions are scanned for digital storage. Digitized plans can be revised much more rapidly. Information technology has changed how PCL runs its business Demonstrates I T’s role in redesigning jobs and business processes Illustrates the potential for technology to improve operational efficiency (reduce time and costs) and customer experience Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved PCL Construction: The New Digital Firm Staff working on PCL projects can access information from cloud-based systems at any time and location using mobile devices PCL saves 80 percent of the cost of backing up its corporate data by using the cloud platform. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved What is Information System and its different activities? What is Information Systems? Before defining information system, we should differentiate between information technology and information systems. Information technology: the hardware (ex. computer machines) and software (ex. Windows) a business uses to achieve its objectives. An information system: a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. It contains information about significant people, places, and things within the organization or in the environment surrounding it.  10 CORE DRIVERS OF INFORMATION AGE  The core drivers of the information age Data Information Business intelligence Knowledge © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 10  11 Data  Data - Raw facts that describe the characteristics of an event or object © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 11  12 Information  Information - Data converted into a meaningful and useful context © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 12  13 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 © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 13  14 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 © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 14  15 THE CHALLENGE: DEPARTMENTAL COMPANIES Common Departments Working Independently © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 15  16 THE MIS SOLUTION Common Departments Working Interdependently 16 © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU  17 THE MIS SOLUTION © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 17 Activities of Information Systems Three activities in an information system produce the information that organizations need to make decisions, control operations, analyze problems, and create new products or services. Input: Collecting raw data (Internally or externally). Processing: Converting the raw material. Output: transfers the processed information to the people or activities for use. Information systems also require feedback, which is output that is returned to appropriate members of the organization to help them evaluate or correct the input stage. Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory agencies, interact with the organization and its information systems.  Functions of an Information System Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory agencies, interact with the organization and its information systems.  PCL Construction Inputs Processing Output Names/Addresses Computer store and Providing of Contractors process input data information such Project names to: as: Identification Calculate the time Size, cost, and numbers and costs of each duration of all Project activities activity. projects. Material costs The total cost of the Projects under and Labor costs entire project over budget. Start and The estimated Projects and completion dates completion time for project activities for project activities the entire project. that are late or on time. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved  21 THE MIS SOLUTION © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 21 The Emerging Digital Firms The growth and changes in information technology have led to the emergence of digital firms. A digital firm is one in which nearly all of the organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated. The Emerging Digital Firms Key Characteristics 1. Core business processes are accomplished through digital networks spanning the entire organization or linking multiple organizations. Examples of Business Processes: Developing a new product Generating and fulfilling an order Creating a marketing plan Hiring an employee The Emerging Digital Firms Key Characteristics 2. Key corporate assets: intellectual property, core competencies, and financial and human assets-are managed through digital means. In a digital firm, any piece of information required to support key business decisions is available at any time and anywhere in the firm. 3. Digital firms sense and respond to their environments far more rapidly than traditional firms, giving them more flexibility to survive in turbulent times. 4. Digital firms offer greater flexibility in organization and management Time shifting: business conducted continuously, 24/7 Space shifting: work takes place in a global workshop (Wherever in the world).  26 MIS Department Roles and Responsibilities  Chief Information Officer (CIO) – Oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives  Chief Knowledge Officer (CKO) - Responsible for collecting, maintaining, and distributing the organization’s knowledge  Chief Privacy Officer (CPO) – Responsible for ensuring the ethical and legal use of information © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 26  27 MIS Department Roles and Responsibilities  Chief Security Officer (CSO) – Responsible for ensuring the security of IT systems  Chief Technology Officer (CTO) – Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 27  28 MIS Department Roles and Responsibilities  Chief Information Officer (CIO) – Oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives  Chief Knowledge Officer (CKO) - Responsible for collecting, maintaining, and distributing the organization’s knowledge  Chief Privacy Officer (CPO) – Responsible for ensuring the ethical and legal use of information © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 28  29 MIS Department Roles and Responsibilities  Chief Security Officer (CSO) – Responsible for ensuring the security of IT systems  Chief Technology Officer (CTO) – Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT © The McGraw-Hill Companies, All Rights Reserved. Edited by Dr. Naseer Khan for AQU 29 What are the major dimensions of Management Information Systems? Dimensions of Information Systems An information system provides a solution to a problem or challenge facing a firm and represents a combination of (1) management, (2) organization, and (3) technology elements. This broader understanding of information systems, which encompasses an understanding of the management and organizational dimensions of systems as well as the technical dimensions of systems, as information systems literacy. Deal with behavioral and technical issues surrounding the system. Computer literacy, in contrast, focuses primarily on knowledge of information technology.  The field of management information systems (MIS) tries to achieve this broader information systems literacy. MIS deals with behavioral issues as well as technical issues surrounding the development, use, and impact of information systems used by managers and employees in the firm. Information Systems Are More Than Computers Dimensions of Information Systems: Organizations Hierarchy of authority, responsibility (Have a structure) – Senior management: Long-range decisions – Middle management: carry out programs/plans of senior management. – Operational management: Monitoring daily activities – Knowledge workers: such as engineers and scientists who create new knowledge for the organization. – Data workers: such as secretaries who assist with scheduling and communication at all levels. – Production or service workers: produce the product and deliver the service. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 1.6 Levels in a Firm Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems: Organizations Business Functions: The major business functions, or specialized tasks performed by business organizations, consist of – sales and marketing, – manufacturing and production, – finance and accounting, and – human resources. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems: Organizations Business Processes: They include formal rules that have been developed over a long time for accomplishing tasks. – These rules guide employees in a variety of procedure such as (writing an invoice to responding/customer complaints) Information systems automate many business processes – For instance, how a customer receives credit or how a customer is billed is often determined by an information system that incorporates a set of formal business processes. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems: Organizations Each organization has a unique culture, or fundamental set of assumptions, values, and ways of doing things, that has been accepted by most of its members. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved  Dimensions of Information Systems: Management Managers set organizational strategy for responding to business challenges and problems. In addition, managers must act creatively – Creation of new products and services – Occasionally re-creating the organization Information technology can play a powerful role in helping managers design and deliver new products and services and redirecting and redesigning their organizations. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved  Dimensions of Information Systems: Information Technology Computer hardware is the physical equipment used for input, processing, and output activities in an information system. Computer software consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. Networking and telecommunications technology – consisting of both physical devices and software, links the various pieces of hardware and transfers data from one physical location to another. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved All of these technologies, along with the people required to run and manage them, represent resources that can be shared throughout the organization and constitute the firm’s information technology (IT) infrastructure. The IT infrastructure provides the foundation, or platform, on which the firm can build its specific information systems. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Strategic Business Objectives of Information Systems 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 Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved 1. Operational Excellence Improved efficiency results in higher profits Information systems and technologies help improve efficiency and productivity Example: Walmart – Power of combining information systems and best business practices to achieve operational efficiency—and over $485 billion in sales in 2017 – Most efficient retail store in world as result of digital links between suppliers and stores  As soon as a customer purchases an item, the supplier monitoring the item knows to ship a replacement to the shelf. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved 2.New Products, Services, and Business Models Information systems and technologies enable firms to create new products, services, and business models Business model: how a company produces, delivers, and sells its products and services Example: Apple – Transformed old model of music distribution (e.g., CDs, Tapes) with online distribution model (iTunes). – Constant innovations—iPod, iPhone, iPad, etc. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved 3. Customer and Supplier Intimacy Customers who are served well become repeat customers who purchase more – Example: Mandarin Oriental Hotel – Uses I T to foster an intimate relationship with its customers by keeping track of guests’ preferences (e.g., their preferred room temperatures, check-in times) and customize the environment. – Use IT to analyze their customer data to identify their best customers and to develop individualized marketing campaigns based on customers’ preferences Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved 3. Customer and Supplier Intimacy (Cont’d) Close relationships with suppliers result in lower costs – J C Penney uses I T to enhance relationship with supplier in Hong Kong – Linking the sales records with the supplier to determine the exact replacement shirts needed By passing retailers warehouses Inventory is zero Cost of storing is zero as well Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved 3. Improved Decision Making Without accurate information: – Managers must use forecasts, best guesses, luck – Results in:  Overproduction, underproduction  Misallocation of resources  Poor response times Poor outcomes raise costs, lose customers Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Improved Decision Making (Cont’d) Real-time data improves ability of managers to make decisions. Example: Verizon’s web-based digital dashboard to provide managers with real-time data on customer complaints, network performance etc.  Using this information, managers can immediately allocate repair resources to affected areas, inform consumers of repair efforts, and restore service fast. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved  4. Competitive Advantage Often results from achieving previous business objectives - operational excellence; new products, services, and business models; customer/supplier intimacy; and improved decision making. Advantages over competitors – Charging less for superior products, better performance, and better response to suppliers and customers – Higher sales and profits that competitors can’t match. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved 5. Survival Business firms invest in information systems and technologies because they are necessities of doing business. Keeping up with competitors – Citibank’s introduction of Automated Teller Machines (A T Ms). – Providing ATM services to retail banking customers is simply a requirement of being in and surviving in the retail banking business. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved