Management Information Systems Business Driven MIS
- 1. CHAPTER ONE MANAGEMENT INFORMATION SYSTEMS BUSINESS DRIVEN MIS Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 3. SECTION 1.1: BUSINESS DRIVEN MIS Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 9. COMPETING INTHE INFORMATION AGE The core drivers of the information age Data Information Business intelligence Knowledge Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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, Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 14. THE POWER OF BIG DATA ANALYTICS Big data will create 4.4 million global MIS jobs Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 16. INFORMATION Information - Data converted into a meaningful and useful context Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 21. BUSINESS INTELLIGENCE Behavioral analysis Correlation analysis Exploratory data analysis Pattern recognition analysis Social media analysis Speech analysis Text analysis Web analysis Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 23. THE CHALLENGE: DEPARTMENTAL COMPANIES Common departments working independently Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 24. THE MIS SOLUTION Common departments working interdependently Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 26. THE MIS SOLUTION Services -Tasks performed by people that customers’ will buy to satisfy a want or need Teaching WaitingTables Cutting Hair Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 32. SECTION 1.2: BUSINESS STRATEGY Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 35. IDENTIFYING COMPETITIVE ADVANTAGES Stakeholder’s Interests Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 39. THE FIVE FORCES MODEL – EVALUATING INDUSTRY ATTRACTIVENESS Five Forces Model Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 47. THETHREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS Porter’sThree Generic Strategies Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 48. THETHREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS Porter’sThree Generic Strategies Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 52. VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES Porter’sValue Chain Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 53. VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES Value Chain and Porter’s Five Forces Model Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 54. LEARNING OUTCOME REVIEW Now that you have finished the chapter please review the learning outcomes in your text Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.