MIS in Action

 In 2005, Wal-Mart attained more than $285 billion in sales – nearly one-
tenth of retail sales in the U.S. – in large part because of its Retail Link
System, which digitally links its suppliers to every one of Wal-Mart’s 5, 289
stores worldwide. As soon as a customer purchases an item, the supplier
monitoring the item knows to ship a replacement to the shelf.

 Every time a dress shirt is bought at a JCPenny store in the U.S., the record
of the sale appears immediately on computers in Hong Kong at its supplier,
TAL Apparel Ltd., a large contract manufacturer that produces one in eight
dress shirts sold in the U.S. TAL decides how many replacement shirts to
make, and in what styles, colors, and sizes, and then sends the shirts to each
JCPenny store. JCPenny’s shirt inventory is near zero, as is the cost of
storing it.

2
 MIS in Action
Information and Technology – Essential to Business!
Think of the airline industry
Search for current low prices
Reservations
Frequent flier programs
Communications
Partnerships (EX: American Airlines Plus Citibank)
Information and Technology enables much of this
experience.

3
Human Vs Computers
Why Study IS?
Information Systems Careers
 Systems analyst, specialist in enterprise resource planning (ERP), database
administrator, telecommunications specialist, consulting, etc.
Knowledge Workers
 Managers and non-managers
 Employers seek computer-literate professionals who know how to use
information technology.
Computer Literacy Replacing Traditional Literacy
Key to full participation in western society

MIS 715 Eaton Fall 2001 5

 What will I learn?
What is the role of information systems in today’s competitive
business environment?

What exactly is an information system? What do managers need to

know about information systems?
How are information systems transforming organizations and
management?

How has the Internet and Internet technology transformed

business?
What are the major management challenges to building and using
information systems?
 Management Challenges
1. Design competitive and effective systems

2. Understand system requirements of global business

environment

3. Create information architecture that supports

organization’s goal
4. Determine business value of information systems

5. Design systems people can control, understand and use

in a socially, ethically responsible manner
 What is IS?
A set of interrelated components that collect (or retrieve),
process, store, and distribute information to support
decision making and control in an organization.
 Data Vs Information

Data: Streams of raw facts representing events such

as business transactions

Information: Clusters of facts that are meaningful

and useful to human beings in the processes such as
making decisions
Data and Information
Activities in an Information System

INPUT PROCESS OUTPUT

FEEDBACK
Functions of an Information System

Figure 1-3
 Data Manipulation

Example: customer survey

Reading through data collected from a
customer survey with questions in various
categories would be time-consuming and
not very helpful.
When manipulated, the surveys may

provide useful information.

MIS 715 Eaton Fall 2001 13
 Generating Information
Computer-based ISs take data as raw material, process it,
and produce information as output.

Input-process-output
 Data, Information, and Systems

Figure 1.2 Characteristics of useful information

 Definitions
What Is a System?
System: A set of components that work together to achieve a
common goal

Subsystem: One part of a system where the products of more

than one system are combined to reach an ultimate goal

Closed system: Stand-alone system that has no contact with

other systems

Open system: System that interfaces with other systems

 Components of IS

Figure 1.6 Components of an information system

 Stages of Data Processing

The Four Stages of Data Processing

Input: Data is collected and entered into computer.

Data processing: Data is manipulated into information using

mathematical, statistical, and other tools.

Output: Information is displayed or presented.

Storage: Data and information are maintained for later use.

MIS 715 Eaton Fall 2001 18

 Business Processes

Supply Enterprise Customer Knowledge

Chain Management Management Management
Management Firm
Profitability
and
Strategic
Position
Data Transformation Dissemination
Collection Into
and Business
Storage Systems

Planning Coordinating Controlling Modeling and

Decision Making

Information Processing Activities Management Activities

Business Value
 Major Business Functions

Sales and marketing

Manufacturing

Finance

Accounting

Human resources
 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

WHY INFORMATION
SYSTEMS?
Organizations

Key Elements:
People: Managers, knowledge workers, data
workers, production or service workers

Structure: Organization chart , groups of

specialists, products, geography
 Organizations

Operating procedures: Standard operating procedures

(SOP, rules for action)

Politics: Power to persuade, get things done

Culture: Customs of behavior

 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

WHY INFORMATION
SYSTEMS?
Management

Levels:
Senior managers: make long-range strategic decisions
about products and services

Middle managers: Carry out the programs and plans of

senior management

Operational managers: monitor the firm’s daily activities

 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

WHY INFORMATION
SYSTEMS?
Computer Technology

Tools managers use to cope with change

Hardware: Physical equipment

Software: Detailed preprogrammed instructions

 Storage: Physical media for

storing data and the software
 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

CONTEMPORARY APPROACHES TO INFORMATION

SYSTEMS

Technical
Approaches
Computer Operations
Science Research

Management Sociology
Science

Psychology Economics
Behavioral
Approaches

Figure 1-6
 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

TOWARD THE DIGITAL FIRM

What You Can Do on the Internet?

Communicate and collaborate

Access information

Participate in discussions

Supply information

Find entertainment

Exchange business transactions

 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

TOWARD THE DIGITAL FIRM

New Options for Organizational Design

Flattening organizations

Separating work from location

Reorganizing work-flows

Increasing flexibility

Redefining organizational boundaries

 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

TOWARD THE DIGITAL FIRM

Flattening Organizations & Information Systems

Figure 1-10
 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

TOWARD THE DIGITAL FIRM

Redesigned Work Flow For Insurance Underwriting

Figure 1-11
 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

TOWARD THE DIGITAL FIRM

The Digital Firm

Electronic commerce

Electronic business

Digital market: Information systems links, buyers

and sellers to exchange information, products,
services, payments
 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

TOWARD THE DIGITAL FIRM

THE EMERGING DIGITAL FIRM
ELECTRONIC BUSINESS

Electronic Commerce

Factories
• Just-in-time production
• Continuous inventory
replenishment
Customers
• Production planning
• On-line marketing
• On-line sales
• Built-to-order products
• Customer service
• Sales force automation

Remote offices and work groups

• Communicate plans and policies
• Group collaboration
• Electronic communication
• Scheduling

Suppliers
• Procurement
• Supply chain management

Business partners
• Joint design
• Outsourcing

Figure 1-12
 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

TOWARD THE DIGITAL FIRM

Electronic Commerce

Internet links buyers, sellers

Lower transaction costs

Goods and services advertised, bought, exchanged

worldwide

Business-to-business transactions increasing

 Management Information Systems 8/e
Chapter 1 Managing the Digital Firm

TOWARD THE DIGITAL FIRM

Electronic Business

Electronic Business: Executing all the firm’s

business processes with Internet technology

Intranet: Business builds private, secure network

based on Internet technology

Extranet: Extension of intranet to authorized

external users