1

Module 1: Introduction to MIS

2

Objectives

• Understand the systems approach• Why is technology important?• Understand Porters 5 forces framework• Understand the Value chain framework• Differentiate between types of systems

3

Systems approach to MIS

4

Management

• The act, art, or manner of managing, handling, controlling directing, etc.

• Origin: to train (a horse) in his paces; cause to do exercises of the manage

• To control the movement or behavior of; handle; manipulate

• To have charge of; direct; conduct; administer

• To get (a person) to do what one wishes

Webster’s Dictionary

5

Information

•Derived from the Latin verb informo, informare, meaning to “give form to”

• Information etymologically connotes an imposition of organization upon some indeterminate mass or substratum, the imparting form that gives life and meaning to otherwise lifeless or irrelevant matter

• Data that have been shaped by humans into a meaningful and useful form.

Schoderbek, Schoderbek & Kefalas

6

SYSTEM

Webster’s New World Dictionary

• A set or arrangement of things so related or connected as to form a unity or organic whole

• A set of facts, principles, rules, etc. classified or arranged in a regular, orderly form so as to show a logical plan linking the various parts.

• A method or plan of classification or arrangement

7

SYSTEMA system is defined as (1) a set (2) of objects (3) together with relationships (4) between the objects and between their attributes (5) related to each other and to their environment (6) so as to form a whole.

Schoderbek, Schoderbek & Kefalas

SET — any well defined collection of elements or objects within some frame of reference

OBJECTS — objects are elements of a system [INPUTS (serial, probable, or feedback), PROCESS (transformation), OUTPUTS (Intended, waste, or pollution)] Efficiency - ratio of output to input

RELATIONSHIPS — the bonds that link objects together (Symbiotic, synergistic, and redundant)

ATTRIBUTES — attributes a properties of both objects and relationships (defining/accompanying characteristics)

ENVIRONMENT — includes not only that which lies outside the system’s complete control but that which at the same time also determines in some way the system’s performance.

WHOLE — defining attribute.

8

Individual Information Processing System

Sensory Information - Visual - Auditory - Kinesthetic - Olfactory

Brain

Cognitive Frames - Assumptions - Criteria

Internal States

Behaviors

Macro - Speaking - Eating - Pointing

Micro - Heart Rate - Voice Temp - Skin Temp

Input Processing Output

Memory Personal History

Environment

9

The Organization as a System

Money

Labor

Input Process Output

Science Technology

Products, goods and services

Marketable waste

Government

Pollution

Public

Management

Management

Materials andEquipment

Environment

Political, Legal, Social, Physical, Economic, …

10

Diagram of a System’s Parameters, Boundary, and Environment

Input Process Output

Feedback

o

p

i

I

p

0

op

i

op

i

o

p

i To other systemsFrom other systems

System’s boundary

System’s environment

11

The Organization, Its Resources and Its Environment

Input Process Output

Feedback

Material andEquipment Government

Ecology

Competitors

GeneralPublic

Land

Capital

Labor

Technology

Customers

The organization

Indicates degree of control, alternatively, resourcesIndicates degree of independence or, alternatively, environmentIndicates the boundary demarking the system from its environment

12

Socio-Technical System

SocialSystem

Technical System

STRUCTURE

PEOPLE

TECHNOLOGY

TASKS

MIS(Direct)

Socio-Technical Model as a Work System

13

CHALLENGES

• Technology advances

• Productivity challenge

• Strategic business challenge

• People challenge

14

Information Systems1 -- FOCUS

•People

•Organizations

•Technology

•Problem Solving

1 A set of interrelated components that collect, retrieve, process,store and distribute information for the purpose of facilitating planning,control, coordination, analysis, and decision making in organizations.

15

5 forces and value chain Organizational processes

16

Competitive Intelligence

• Such information-gathering drives business performance – by increasing market knowledge – improving knowledge management – raising the quality of strategic planning

One of the most important aspects in developing a competitive advantage is to acquire information on the activities and actions of competitors.

However once the data has been gathered it must be processed into information and subsequently business intelligence. Porters 5 Forces is a well-known framework that aids in this analysis.

17

Porter’s Competitive Forces Model

• The threat of entry of new competitors• The bargaining power of suppliers• The bargaining power of customers (buyers)• The threat of substitute products or services• The rivalry among existing firms in the industry

The model recognizes five major forces that could endanger a company’s position in a given industry.

External Competitive ForcesExternal Competitive Forces

18

Competitive Competitive ForcesForces

Porter’s Competitive Forces Model

19

The Value ChainValue Chain -- The set of processes a firm uses to create value for its customers ( see pg 58)

(an abbreviated version of the term value added chain from economics)

The Value Chain includes: Primary Processes -- that directly create the value the firm’s customer perceives, and

Support Processes -- that add value indirectly by making it easier for others to perform the primary processes

20

The Value ChainAccording to the value chain model (Porter, 1985), the activities conducted in any organization can be divided into two parts: primary activities and support activities.

Primary activities are those activities in which materials are purchased, processed into products, and delivered to customers. Each adds value to the product or service hence the value chain. Inbound logistics (inputs) Operations (manufacturing and testing) Outbound logistics (storage and distribution) Marketing and sales Service

21

The Value Chain (Continued) Unlike the primary activities, which directly add value to

the product or service, the support activities are operations that support the creation of value (primary activities) The firm’s infrastructure (accounting, finance, management) Human resources management Technology development (R&D) Procurement

The initial purpose of the value chain model was to analyze the internal operations of a corporation, in order to increase its efficiency, effectiveness, and competitiveness. We can extend that company analysis, by systematically evaluating a company’s key processes and core competencies to eliminate any activities that do not add value to the product.

22

The Value Chain (Continued)

Secondary Secondary ActivitiesActivities

Primary ActivitiesPrimary Activities

ValuValuee

23

IBM’s Value Chain Model

High-Volume, Easily Configured Products

Complex Configured Hardware

OEM Hardware

Distributed Software

Entitled Software

Services

Financing

Enterprise Information Management

Business Policies and Rules

Customer Collaberation

Self-Service Knowledge Management Collaboration and e-Learning

Ibm.com

Fufillment

Sales

CRM

Supplier Collaberation

Integrated Supply Chain

Procurement

Integrated Product

Development

Value Chains

Customers Suppliers

Employees

24

Does IT matter?

25

Types of systems

26

Information System Focus

ExecutiveManagement

MiddleManagement

Operational Management 1960’s - 1970’s

1980’s

1990’s

Focus on information systems advantage has moved upward through the organization.

MIS/DSS/GSS/EIS

Organization Levels and Types of IS Used

Strategic Level

Tactical Level

Knowledge Level

Operational LevelTPS

GSS/EIS

MIS/DSS/KWS

Top Level ???

• Transaction Processing Systems (TPS) - - handles and processes daily exchanges (transactions)

• Office Automation Systems (OAS) - - produces documents, plans, schedules

• Management Information Systems (MIS)– produces managerial reports

Information System Focus

Operational Level

• Decision Support Systems (DSS) - – supports and assists in all problem-specific decision

making.

• Artificial Intelligence (AI) and Expert Systems (ES) -- Knowledge Work Systems (KWS)- is an information system that can make suggestions and reach solutions in much the same way as a human expert.

Information System Focus

Knowledge Level

• Executive Support System (ESS)• Group Support System (GSS)

- is an information system that can make suggestions and reach solutions in much the same way as a human expert.

Information System Focus

Strategic Level

Tactical Level

31

TYPES OF INFORMATION SYSTEMSTYPES OF INFORMATION SYSTEMS

SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN

KIND OF SYSTEM GROUPS SERVEDKIND OF SYSTEM GROUPS SERVED

STRATEGIC LEVEL SENIOR MANAGERSSTRATEGIC LEVEL SENIOR MANAGERS

MANAGEMENT LEVEL MIDDLE MANAGERSMANAGEMENT LEVEL MIDDLE MANAGERS

OPERATIONAL OPERATIONAL OPERATIONAL LEVEL OPERATIONAL LEVEL MANAGERS MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE & KNOWLEDGE LEVEL KNOWLEDGE & DATA WORKERSDATA WORKERS

RESOURCESRESOURCESMARKETINGMARKETING

32

Information Systems Process Systems and Knowledge Systems

Type of system Process systems Knowledge systems

Type of DataQuantitative /

StructuredQuantitative /

StructuredQualitative /

Unstructured

Examples of technology ERP / TPS Business intelligence Content Management

SCM Data Mining Information Portals

CRM Collaborative tools

Example When customers make a purchase from anywhere in the world using EBay's' online auctions, the firms' sales process integrates with a variety of partner and processes that include payment process and its internal process. (Sambamurthy et al., 2003)

Sara Lee uses its ability to analyze the sales of retailers it serves. In doing so, they can identify trends and exceptions, draw comparison, perform calculations and obtain fast answers (Turban & Aronson, 2000).

BP uses 3-D imaging rooms equipped with state-of-the art videoconferencing systems for helping its engineers gather in any of the company's 15 imaging rooms and tap into and share data over the network (Echikson, 2001).

33

Characteristics of Information System Capabilities

Capability Orientation Level Focus Nature

TPS Data Operational Task, Efficiency StructuredMIS Information Management control Resource StructuredDSS Decision All, strategic Alternatives UnstructuredOAS Productivity Operational Task, Efficiency StructuredEIS Problem Executive Status, Problem Flexible, easyAI/ES Knowledge Operational Problem StructuredIOS Data Operational Task, Efficiency Structured

Strategic Information Systems -- Information systems that play a major role in a product’s value chain.

Although there is no clear-cut separation between strategic information systems and other systems, a number of characteristics indicate whether an information system should be considered strategic.

Systems should be considered strategic if :•they help differentiate the product form its competitors; •if the customers directly perceive the value of the information system to them; or •if the product’s production, sales, and service require the system.

34

Lewin’s Change Model

•Unfreezing • preparing for change • create felt need • disrupt existing attitudes, behaviors

•Changing • modify situation • sustain effort • clear goals • adequate preparation

•Refreezing • Reinforce desired behavior • Support • Evaluation

Change Agent• Responsible for changing individual & system (organizational) behavior • IS professional as change agent • Facilitate & support change processes

35

Resistance to Change Causes Fear of unknown Security No felt need Power/threatened Rumors Timing Resources

Strategies

Communicate Clarify Show benefit Enlist key people Accurate info Delay Provide support

Targets of Change

Purpose, strategy, objectives Structure Technology Culture Tasks People

All are interrelated

Planned Change Deliberate and intentional

Response to performance gap

Gap between actual & desired state

Radical • massive restructuring “frame-breaking”

Incremental • “frame-bending” • continuous improvement

Change

36

Change Strategies

Force-coercion

Authority power Good for unfreezing stage

Rational persuasion

Expert power Convince of benefits of change

Shared power Active, real involvement Takes longest, lasts longest

Resistance to Change

• Attitudes and behaviors

• View as useful feedback

• Educate / communicate

• Participation = commitment

• Provide support re: external constraints

• Negotiate trade-offs

• Manipulation: speed, use power

Change

37

Strategic Role of IS

How Businesses Use Information Systems &

Information Systems: Challenges and Opportunities

38

SYSTEM INTERDEPENDENCE

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

INTERDEPENDENCEINTERDEPENDENCE

SOFTWARESOFTWARE

HARDWAREHARDWARE

DATABASEDATABASE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS