© the mcgraw-hill companies, all rights reserved chapter one management information systems...
TRANSCRIPT
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© The McGraw-Hill Companies, All Rights Reserved
CHAPTER ONE
MANAGEMENT INFORMATION
SYSTEMS
BUSINESS DRIVEN MIS
CHAPTER ONE
MANAGEMENT INFORMATION
SYSTEMS
BUSINESS DRIVEN MIS
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CHAPTER ONE OVERVIEW
SECTION 1.1 – BUSINESS DRIVEN MIS• Competing in the Information Age• The Challenge of Departmental Companies and the MIS
Solution
SECTION 1.2 – BUSINESS STRATEGY• Identifying Competitive Advantages• The Five Forces Model – Evaluating Industry
Attractiveness• The Three Generic Strategies – Choosing a Business
Focus• Value Chain Analysis – Executing Business Strategies
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© The McGraw-Hill Companies, All Rights Reserved
SECTION 1.1
BUSINESS DRIVEN MIS
SECTION 1.1
BUSINESS DRIVEN MIS
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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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COMPETING IN THE 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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COMPETING IN THE 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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COMPETING IN THE INFORMATION AGE
Examples of the power of business and technology
• Amazon – Not a technology company; primary business focus is selling books
• Netflix – Not a technology company; primary business focus is renting videos
• Zappos – Not a technology company; primary business focus is selling shoes
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COMPETING IN THE INFORMATION AGE
The core drivers of the information age
• Data
• Information
• Business intelligence
• Knowledge
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Data
Data - Raw facts that describe the characteristics of an event or object
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Information
Information - Data converted into a meaningful and useful context
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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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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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THE CHALLENGE: DEPARTMENTAL COMPANIES
Common Departments Working Independently
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Common Departments Working Interdependently
THE MIS SOLUTION
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THE MIS SOLUTION
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THE MIS SOLUTION
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SYSTEMS THINKING
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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SYSTEMS THINKING
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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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
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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
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MIS Department Roles and Responsibilities
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© The McGraw-Hill Companies, All Rights Reserved
SECTION 1.2
BUSINESS STRATEGY
SECTION 1.2
BUSINESS STRATEGY
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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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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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IDENTIFYING COMPETITIVE ADVANTAGES
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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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IDENTIFYING COMPETITIVE ADVANTAGES
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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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THE FIVE FORCES MODEL – EVALUATING INDUSTRY ATTRACTIVENESS
Porter’s Five
Forces Model
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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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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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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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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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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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Analyzing the 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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THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS
Porter’s Three Generic Strategies
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THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS
Porter’s Three Generic Strategies
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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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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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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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VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES
Porter’s Value Chain
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VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES
Value Chain and Porter’s Five Forces Model