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1 Nassau Community CollegeProf. Vincent Costa Session 1 Business Driven MIS CMP 117 Business Computing: Concepts &Applications

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Chapter 1 Management Information Systems: Business Driven MIS McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

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3 Nassau Community CollegeProf. Vincent Costa CHAPTER ONE OVERVIEW SECTION 1.1 BUSINESS DRIVEN MIS Competing in the Information Age The Challenge: Departmental Companies The Solution: Management Information Systems 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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Chapter 1 2011 The McGraw-Hill Companies, All Rights Reserved SECTION 1.1 BUSINESS DRIVEN MIS SECTION 1.1 BUSINESS DRIVEN MIS 1-4

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5 Nassau Community CollegeProf. Vincent Costa SECTION 1.1: LEARNING OUTCOMES 1.Describe the information age and the differences among data, information, business intelligence, and knowledge 2.Identify the different departments in a company and why they must work together to achieve success 3.Explain systems thinking and how management information systems enable business communications

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6 Nassau Community CollegeProf. Vincent Costa Did you know... Avatar, the movie, took over 4 yrs to make and cost $450 million Lady Gagas real name is Joanne Angelina Germanotta It costs $2.6 million for a 30-second advertising time slot during the Super Bowl COMPETING IN THE INFORMATION AGE

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7 Nassau Community CollegeProf. Vincent Costa 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 COMPETING IN THE INFORMATION AGE

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8 Nassau Community CollegeProf. Vincent Costa 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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9 Nassau Community CollegeProf. Vincent Costa COMPETING IN THE INFORMATION AGE The core drivers of the information age Data Information Business intelligence Knowledge

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10 Nassau Community CollegeProf. Vincent Costa Data Data - Raw facts that describe the characteristics of an event or object

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11 Nassau Community CollegeProf. Vincent Costa Information Information - Data converted into a meaningful and useful context

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12 Nassau Community CollegeProf. Vincent Costa 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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13 Nassau Community CollegeProf. Vincent Costa Knowledge Knowledge - Skills, experience, and expertise coupled with information and intelligence that creates a persons intellectual resources Knowledge worker Individual valued for their ability to interpret and analyze information

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14 Nassau Community CollegeProf. Vincent Costa THE CHALLENGE: DEPARTMENTAL COMPANIES Common Departments Working Independently

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15 Nassau Community CollegeProf. Vincent Costa Common Departments Working Interdependently THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS

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16 Nassau Community CollegeProf. Vincent Costa 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 THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS

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17 Nassau Community CollegeProf. Vincent Costa THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS 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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18 Nassau Community CollegeProf. Vincent Costa 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 organizations knowledge Chief privacy officer (CPO) Responsible for ensuring the ethical and legal use of information

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19 Nassau Community CollegeProf. Vincent Costa 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 MIS Department Roles and Responsibilities

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Chapter 1 2011 The McGraw-Hill Companies, All Rights Reserved SECTION 1.2 BUSINESS STRATEGY SECTION 1.2 BUSINESS STRATEGY 1-20

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21 Nassau Community CollegeProf. Vincent Costa LEARNING OUTCOMES 4.Explain why competitive advantages are temporary 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 Porters value chain analysis

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22 Nassau Community CollegeProf. Vincent Costa 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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23 Nassau Community CollegeProf. Vincent Costa IDENTIFYING COMPETITIVE ADVANTAGES Competitive advantage A product or service that an organizations customers place a greater value on than similar offerings from a competitor First-mover advantage Occurs when an organization can significantly affect its market share by being first to market with a competitive advantage

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24 Nassau Community CollegeProf. Vincent Costa IDENTIFYING COMPETITIVE ADVANTAGES Competitive intelligence The process of gathering information about the competitive environment to improve the companys ability to succeed Competitive intelligence tools Porters Five Forces Model Porters Three Generic Strategies Porters Value Chain Analysis

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25 Nassau Community CollegeProf. Vincent Costa THE FIVE FORCES MODEL EVALUATING INDUSTRY ATTRACTIVENESS Porters Five Forces Model

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26 Nassau Community CollegeProf. Vincent Costa 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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27 Nassau Community CollegeProf. Vincent Costa 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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28 Nassau Community CollegeProf. Vincent Costa 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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29 Nassau Community CollegeProf. Vincent Costa 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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30 Nassau Community CollegeProf. Vincent Costa 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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31 Nassau Community CollegeProf. Vincent Costa Analyzing the Airline Industry Perform a Porters 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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32 Nassau Community CollegeProf. Vincent Costa THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS Porters Three Generic Strategies

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33 Nassau Community CollegeProf. Vincent Costa THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS Porters Three Generic Strategies

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34 Nassau Community CollegeProf. Vincent Costa 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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35 Nassau Community CollegeProf. Vincent Costa VALUE CHAIN ANALYSIS EXECUTING BUSINESS STRATEGIES Primary value activities Inbound logistics - Acquires raw materials and resources, and distributes to manufacturing as required 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 after the sale of goods and services

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36 Nassau Community CollegeProf. Vincent Costa 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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37 Nassau Community CollegeProf. Vincent Costa VALUE CHAIN ANALYSIS EXECUTING BUSINESS STRATEGIES Porters Value Chain

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38 Nassau Community CollegeProf. Vincent Costa VALUE CHAIN ANALYSIS EXECUTING BUSINESS STRATEGIES Value Chain and Porters Five Forces Model

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39 Nassau Community CollegeProf. Vincent Costa Thinking Out of the Box A clever strategy Father Guido Sarducci's Five Minute University

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40 Nassau Community CollegeProf. Vincent Costa Homework Read over Chapter 1 of Information Systems, pp.5-24