chapter 1 the importance of mis
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Dr. Chen, Management Information Systems
Why MIS?
Part 1
Dr. Chen, Management Information Systems
“But Today, They’re Not Enough.”
Jennifer lacks skills Falcon Security needs:1. Abstract reasoning skills.2. Systems thinking skills.3. Collaboration skills.4. Experimentation skills.
Dr. Chen, Management Information Systems
What Do Employers Want?
• Self starter, don’t wait to be told what to do.
• Team worker • Develops ideas with others.• Ask questions.• Pulls more than their own weight.
Dr. Chen, Management Information Systems
Chapter 1The Importance of MIS
Jason C. H. Chen, Ph.D.Professor of MIS
School of Business AdministrationGonzaga UniversitySpokane, WA 99258chen@gonzaga.edu
Dr. Chen, Management Information Systems
Study Questions
Q1: Why is Introduction to MIS the most important class in the business school?
Q2: How will MIS Affect Me?Q3: What is MIS?Q4: How can you use the five-component model? Q5: What is information?Q6: What are necessary data characteristics?Q7: 2026?
Dr. Chen, Management Information Systems
Top-Ten Innovation Mistakes a Company Can Make During a Turbulent Economy
• Fire talent.• _______________________ • Reduce risk.• Stop product development.• Allow boards to replace growth-oriented CEOs with cost-
cutting CEOs.• Retreat from globalization.• Allow CEOs to replace innovation as key strategy.• Change performance metrics.• Reinforce hierarchy over collaboration.• Retreat into walled castle.
Cut back on technology
by Philip Kolter and John Caslione (AMACOM 2009)
Dr. Chen, Management Information Systems
Q1: Why Is Introduction to MIS the Most Important Class in the Business School?
• Technology fundamentally changing business (change the way we are doing the business and many others)
• Information Age• Production, distribution, control of information
primary economic drivers.• Digital Revolution
• From mechanical/analog devices to digital devices.
Dr. Chen, Management Information Systems
Q1: Why Is Introduction to MIS the Most Important Class in the Business School?
• Technology fundamentally changing business (change the way we are doing the business, entertaining, communicating and shopping etc.)
• Information Age Production, distribution, control of information
primary economic drivers.• Digital Revolution
From mechanical/analog devices to digital devices.
Dr. Chen, Management Information Systems
Understanding the Forces Pushing the Evolution of New Digital Devices
• Bell’s Law New class of computers establishes a new
industry each decade.– New platforms, programming environments,
industries, networks, and information systems.• Understand how next digital evolution will
affect businesses.• Given: What an industry does and how does
it will change._________ is a given factor.Change
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• Ultimate reason: Moore’s Law• Moore’s Law (1965)
“The number of transistors per square inch on an integrated chip doubles every 18 months.”
Statement commonly misunderstood to be:
Introduction to MIS the Most Important Class in the Business School?
“The speed of a computer doubles every 18 months,” which is incorrect, but captures the sense of principle.
Dr. Chen, Management Information Systems
Evolving Capabilities: Computer Price/Performance Ratio Historical Trend
Figure 1-1: Computer Price/Performance Ratio Decreases
Dr. Chen, Management Information Systems
Metcalfe’s Law
• Network value equal to square of number of users connected to it. (V=U2)• Google, Amazon, eBay
exist due to large numbers of Internet users.
Will these be the biggest companies in 2026? Or will new ones emerge?
Figure 1-2: Increasing Value of Networks_________ EffectsNetwork
Dr. Chen, Management Information Systems
Fundamental Forces Changing Technology
Figure 1-3: Fundamental Forces Changing Technology
Dr. Chen, Management Information Systems
This Is the Most Important Class in the School of Business Because You Will Learn:
• How technology fundamentally changes businesses.
• Why executives try to find ways to use new technology to create a sustainable competitive advantage.
• Assess, evaluate, apply emerging information technology to business.
• Help you attain knowledge needed by future business professionals.
Dr. Chen, Management Information Systems
Q2: How Will MIS Affect Me?
• Technological change is accelerating.• Bell’s Law
Today’s highly successful business could be bankrupt quickly because technology changed and it didn’t.
Ex: Blockbuster
Dr. Chen, Management Information Systems
How Can I Attain Job Security?
• Moore’s Law, Metcalfe’s Law, and Kryder’s Law Driving data processing, storage,
communications costs to essentially _____.• Any routine skill can, and will, be outsourced
to lowest bidder.
zero
Dr. Chen, Management Information Systems
__________ ADVANTAGE• Company perspective
– Company provides products/service free
• User/customer’s perspective– Users/customers use products/service
free
FREE
Dr. Chen, Management Information Systems
What Is a Marketable Skill?
Figure 1-4: Examples of Critical Skills for Nonroutine Cognition
Learn five components of an IS.
Dr. Chen, Management Information Systems
SYSTEM
_______ _________________
FEEDBACK
A system is a group of components that interact to achieve some purpose.
INPUT PROCESS OUTPUT
Dr. Chen, Management Information Systems
How Can Intro to MIS Help You Learn Non-Routine Skills?
• Abstract ReasoningAbility to make and
manipulate models.Learn to use and
construct abstract models.– Ch. 1: Five components of
an IS model.– Ch. 5: How to create
data models.– Ch. 10: How to make
process models.
Dr. Chen, Management Information Systems
How Can Intro to MIS Help You Learn Non-Routine Skills? (cont’d)
• Systems Thinking Ability to model system components, connect
inputs and outputs among components to reflect structure and dynamics.
Ability to discuss, illustrate, critique systems; compare alternative systems; apply different systems to different situations.
Name an example (model)?
I-P-O Model
Dr. Chen, Management Information Systems
How Can Intro to MIS Help You Learn Non-Routine Skills? (cont’d)
• Collaboration• People working together to achieve a common
goal, result, or work product. • Ch. 2 discusses collaboration skills and
illustrates several collaboration information systems.
Dr. Chen, Management Information Systems
How Can Intro to MIS Help You Learn Non-Routine Skills? (cont’d)
• Ability to Experiment• Make reasoned analysis of an opportunity;
developing and evaluating possible solutions. “I’ve never done this before.” “I don’t know how to do it.” “But will it work?” “Is it too weird for the market?”
• Avoid "Fear of failure paralyzes".
Use IS/IT to improve efficiency, effectiveness, innovation, and, ultimately organizational ______________.productivity.
Dr. Chen, Management Information Systems
Jobs• 69% of college graduates need additional
training or education. • 46% working in jobs not requiring their
degree, underemployed.• Better success for students with courses
related to information systems.• Tradable job
• Job not dependent on particular location, can be offshore outsourced.
Dr. Chen, Management Information Systems
What Skills Will Be Marketable During Your Career?
• Only job security is a marketable skill and courage to use it.
• Any routine skill can and will be outsourced to lowest bidder.
• Message: Develop strong non-routine cognitive skills.
“Rapid technological change and increased international competition place the spotlight on the skills and preparation of the workforce, particularly the skills and ability to adapt to changing technology and shifting demand. Shifts in the nature of organizations… favor people with strong nonroutine cognitive skills.”(Lynn A Kaoly and Constantijn W.A. Panis, The 21st Century at Work. RAND Corporation, 2004, p. xiv) “Capacity to Learn”
Message: Develop strong non-routine cognitive skills.
Dr. Chen, Management Information Systems
Job Growth By Sector Over the Past Twenty Years
Figure 1-5: Growth of Jobs by Sector from 1989 to 2009
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BLS Job Projections
Figure 1-6: Bureau of Labor Statistics Occupational Outlook 2012-2022
Dr. Chen, Management Information Systems
Bottom Line of MIS Course
Most important course in business school because:1. Gives background needed to assess, evaluate,
and apply emerging information systems technology to business.
2. Gives marketable skills by helping you learn abstraction, systems thinking, collaboration, and experimentation.
3. Makes you aware of well-paying, high demand MIS-related jobs.
You need the knowledge of this course (BMIS235) to attain that skill.
Dr. Chen, Management Information Systems
Q3: What Is MIS?
• Key elements1. Management and use (and align)2. Information systems3. ____________
•Goal of MIS• Managing IS to achieve business strategies• Managing/using IS to create/improve
competitive advantage.
• Management• Information• Systems
Strategies
Dr. Chen, Management Information Systems
• Information systems components:
Hardware—desktops, laptops, PDAs Software—operating systems, application programs Data—facts and figures entered into computers Procedures—how the other four components are used People—users, technologists, IS support
What is MIS?
Figure 1-7: Five Components of an Information System
Components ________ to produce __________interact information
Dr. Chen, Management Information Systems
Difference Between IT and IS• Information technology (IT)
1. Products2. Methods3. Inventions4. Standards
IT drives development of new IS. IT components = Hardware + Software + Data IS = IT + Procedures + People IS = Hardware + Software + Data + Procedures + People
IT
Procedures
People
IS
IS = IT + ____________ + ___________Management Organization
Dr. Chen, Management Information Systems
INFORMATION SYSTEMS (MIS/IS)
ORGANIZATIONS TECHNOLOGY
MANAGEMENT
INFORMATION SYSTEMS
TM -32
Which component is mostly important?
• Avoid a common mistake: Cannot ____ an IS.– Can buy, rent, lease hardware, software, and databases, and predesigned
procedures.• People execute procedures to employ new IT.• Use of a new system requires training, overcoming employees’ resistance,
and managing employees as they use new system.
buy
Dr. Chen, Management Information Systems
Development and Use of Information Systems
Management and use to:– Develop, maintain, adapt by:
• Creating an information system that meets your needs, take an active role in system’s development. Why?
• Business professionals using cognitive skills to understand business needs and requirements.– Understand how IT systems are constructed– Consider users’ needs during development (users’
involvement)– Learn how to use information systems– Take into account ancillary IT functions (Security,
Backups, etc.)
Dr. Chen, Management Information Systems
Achieving Strategies• Information systems exist to help people
achieve business strategies.• “What is the purpose of our Facebook page?” (not
because every has a Facebook presence!)• “What is it going to do for us?”• “What is our policy for employees’ contributions?”• “What should we do about critical customer
reviews?”• “Are the costs of maintaining the page
sufficiently offset by the benefits?”– cost/benefit analysis
Dr. Chen, Management Information Systems
UYK#1-2 (p.31)
• GROUP DISCUSSION
Dr. Chen, Management Information Systems
Next Class – to be• 1. Complete reading the rest of chapter.• 2. Read chapter Case Study 1: zulily (p.33-35)
– Prepare answers for five questions (1-9, 11, 12, 13, 14) listed in the syllabus and turn in a hardcopy using MS/Word next class.
– We will also conduct case discussion.• 3. If you are asked to present your answer for case
study questions but you do not prepare for them, there will be “10” points off every time from your final course grade.
Dr. Chen, Management Information Systems
PART II
DATA vs. INFORMATION
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Characteristics of the Five Components
Figure 1-7 Characteristics of the Five Components
The Most Important Component – _________• Quality of your thinking• Change the way your brain works• Know how to use information systems• All IS components must work together.
YOU [Video]
Q4: How Can You Use the Five-Component Model?
Dr. Chen, Management Information Systems
Five IS components evaluated based on order of ease of change and amount of organizational disruption.
1. Hardware is simple to order and install.2. Obtaining or developing new programs is more difficult. 3. Creating new databases or changing structure of existing
databases is more difficult. 4. Changing procedures, requiring people to work in new ways, is
even more difficult. 5. Changing personnel responsibilities and reporting relationships
and hiring and terminating employees are both very difficult and very disruptive.
Components Ordered by Difficulty and Disruption
- create competitive advantage as they are more difficult to be replicated/replaced.
Dr. Chen, Management Information Systems
Characteristics of the Five Components
• Most Important Component -- ______ !• Your cognitive skills determine quality of
your thinking, ability to conceive information from data.
• You add value to information and information systems.
• Only humans produce information.• All components must work together.
YOU
Dr. Chen, Management Information Systems
What is Information ?
DATA
Information is refined data.
INFORMATION
What is 80/20 rule?How to apply it to this scenario?
[INPUT] [PROCESS] [OUTPUT]
Dr. Chen, Management Information Systems
What is Information ?
DATA INFORMATION
80% of information/
valuable output
Trivial many (80%)? or
Vital few (20%)?
Other business example?
Dr. Chen, Management Information Systems
DATA, INFORMATION , AND KNOWLEDGE
Dr. Chen, Management Information Systems
The relationships between data, information, and knowledge.
Data
More human contribution
Greater value
Information
Data endowed with relevance and purpose
Requires unit of analysis
Needs consensus on meaning
Human mediation necessary
Often garbled in transmission
Knowledge
Valuable information from the human mind; includes
reflection, synthesis, context
Hard to transfer
Often tacit
Hard to capture electronically
Hard to structure
Highly personal to the source
Data Information Knowledge
Data
Simple observation of states of the world
Easily captured
Easily structured
Easily transferred
Compact, quantifiable
Dr. Chen, Management Information Systems
100 Years ago...
Today...
Industrial Revolution changed the World
• Information Revolution!
Dr. Chen, Management Information Systems
100 Years ago...
Today...
Industrial Revolution changed the World
• Information Revolution!
Dr. Chen, Management Information Systems
Industry Evolution
(mid 1770s)
Steam Engine Rail Road(1829,
change concept of distance)
Information Evolution
(late 1990s)
Computer
Impact on:Economy, Politics,
Social change
Internet(1990,
________ Distance)N
eliminate
Dr. Chen, Management Information Systems
Q5: What Is Information?
Definitions vary:1. Knowledge derived from data, where data
are recorded facts or figures.2. Data presented in a meaningful context.3. Processed data, or data processed by
summing, ordering, averaging, grouping, comparing, or other similar operations.
4. A difference that makes a difference.
Dr. Chen, Management Information Systems
Where Is Information?• Graph is not, itself, information.
• Graph is data you and others perceive, use to conceive information.
• Ability to conceive information from data determined by cognitive skills.
• People perceive different information from same data.• You add value by conceiving information from data.• Where is information?
It’s in Your Head• Users really want is
– ____________ Information
Dr. Chen, Management Information Systems
Amazon.com Stock Price and Net Income
Figure 1-9: Amazon.com Stock Price and Net Income
Dr. Chen, Management Information Systems
________Dimension
______
Dimension
_______
Dimension
Attributes of Information QualityTimelinessCurrencyFrequencyTime Period
ClarityDetailOrderPresentationMedia
AccuracyRelevanceCompletenessConcisenessScopeperformance
Therefore, the objective of MIS is to provide the right information to the right people at the
right time with a right form.
Time
ContentForm
Dr. Chen, Management Information Systems
Q6: What Are Necessary Data Characteristics?
• Accurate—correct and complete data, and processed correctly. Accuracy is crucial; managers must be able to rely on results of their information systems.
• Timely—produced in time for its intended use.
• Relevant—both to the context and to the subject.
• Just sufficient—for purpose for which it is generated. Avoid information overload.
• Worth its cost—appropriate relationship between cost of information and its value.
Figure 1-7 Data Characteristics Required for Good Information
Dr. Chen, Management Information Systems
Videos
• Information is power - Google Videos (2m 6s)• Information Age-The Future of Technology(6-07)
• Next Class• Create the first Web Page
Dr. Chen, Management Information Systems
Copyright © 2017 Pearson Education, Inc.
Q7: 2026?• BYOD common.• Computers-in-a-product• Comprehensive bio-monitoring devices at home,
linked to health care systems.• Widespread use of Google Glass or Microsoft’s
HoloLens.• More people work at home or wherever.• Cost differences between traditional courses and
“course in a box” increases.• Knowledge and use of business information
systems will be more important, not less.
Dr. Chen, Management Information Systems
Case Discussion/Presentation
Dr. Chen, Management Information Systems
• END of CHAPTER 1
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