chapter one management information systems: business driven mis
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Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
CHAPTER ONE
MANAGEMENT INFORMATION
SYSTEMS: BUSINESS
DRIVEN MIS
1-2
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
SECTION 1.1
BUSINESS DRIVEN MIS
1-4
LEARNING OUTCOMES
1. Describe the information age and the differences between 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
1-5
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
1-8
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
1-14
Common Departments Working Interdependently
THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS
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THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS
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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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
1-17
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
1-18
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
SECTION 1.2
BUSINESS STRATEGY
1-20
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 Porter’s value chain analysis
1-21
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
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
1-23
IDENTIFYING COMPETITIVE ADVANTAGES
Competitive intelligence –The process of gathering information about the competitive environment to improve the company’s ability to succeed
Competitive intelligence tools• Porter’s Five Forces Model• Porter’s Three Generic Strategies• Porter’s Value Chain Analysis
1-24
THE FIVE FORCES MODEL – EVALUATING INDUSTRY
ATTRACTIVENESSPorter’s Five
Forces Model
1-25
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
1-28
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
1-29
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
1-30
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
1-31
THE THREE GENERIC STRATEGIES
CHOOSING A BUSINESS FOCUSPorter’s Three Generic Strategies
1-32
THE THREE GENERIC STRATEGIES
CHOOSING A BUSINESS FOCUSPorter’s Three Generic Strategies
1-33
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
1-34
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
1-35
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
1-36
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
1-38
LEARNING OUTCOME REVIEW
Now that you have finished the chapter please review the learning outcomes in your text
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