INFOMAN REVIEWER flows in from another system, nothing

flows out to another system. An open

WEEK2
system interfaces and interacts with
other systems.

• The purpose of information systems is to • INFORMATION SYSTEM

support these activities. In addition to solving - information system (IS) consists of all
problems and making decisions, businesses us the components that work together to
information systems to support daily operations, process data and produce information.
such as electronic commerce, making airline Almost all business information systems
reservations, and many other activities. consist of many subsystems with
subgoals, all contributing to the
organization's main goal.
• GENERATING INFORMATION
• INFORMATION and MANAGERS
- Thinking of an organization in terms of
its suborganizations or subsystems-
called systems thinking is a powerful
management approach because it
creates a framework for excellent
problem solving and decision making.

• INFORMATION MAP
- that is, the description of data and
information flow within an organization-
shows a network of information
subsystems that exchange information
➢ CHARACTERISTICS OF USEFUL INFORMATION with each other and with the world
outside the system.
1. RELEVANT
2. COMPLETE ➢ BENEFITS OF HUMAN-COMPUTER SYNERGY
3. ACCURATE from the Greek “work together”
4. CURRENT
5. ECONOMICAL - Synergy occurs when combined
resources produce output that exceeds
• SYSTEM the sum of the outputs of the same
- system is an array of components that resource employee separately.
work together to achieve a common - A human-computer combination allows
goal, or multiple goals, by accepting the results of human thought to be
input, processing it, and producing translated into efficient processing of
output in an organized manner. large amounts of data.
➢ INFORMATION SYSTEM IN ORGANIZATION
• SYSTEM and SUBSYSTEM
- Often, a system consists of several Components:
subsystems- components of a larger 1. DATA
system-with subgoals, all contributing to 2. HARDWARE
meeting the main goal. 3. SOFTWARE
• CLOSE SYSTEM and OPEN SYSTEM 4. TELECOMMUNICATIONS
- A closed system stands alone, with no 5. PEOPLE
connection to another system: nothing 6. PROCEDURES

➢ FOUR STAGES OF PROCESSING

 techniques to support knowledge-
intensive decision-making processes.
➢ TYPES OF INFORMATION SYSTEMS

1. TRANSACTION PROCESSING SYSTEMS

6. GEOGRAPHIC INFORMATION SYSTEM
- Transaction processing systems (TPSs)
- In some cases, the information decision
are the most widely used information
makers
systems. The predominant function of
need is related to a map or floor plan. In
TPSs is to record data collected at the
such cases, special ISs called geographic
boundaries of organizations, in other
information
words, at the point where the
systems (GISS) can be used to tie data to
organization transacts business with
physical locations.
other parties.

2. SUPPLY CHAIN MANAGEMENT

SYSTEMS
- The term "supply chain" refers to the
WEEK 3
sequence of activities involved in
producing and selling a product or MANAGEMENT INFORMATION SYSTEM (MIS)
service. In industries that produce
goods, the activities include marketing, Management deals with the planning for,
purchasing raw materials, development, management and use of
manufacturing and assembly, packing information technology tools to help people
and shipping, billing, collection, and perform all tasks related to information
after-the-sale services. processing and management.

➢ 3 IMPORTANT ORGANIZATIONAL RESOURCES;

1. PEOPLE
- 2. INFORMATION
3. CUSTOMER RELATIONSHIP 3. INFORMATION TECHNOLOGY
MANAGEMENT SYSTEMS
- Customer relationship management • INFORMATION AS THE KEY RESOURCE IN MIS;
(CRM) systems help manage an
organization's relationships with its 1. DATA – are raw facts that describe a
customers. The term refers to a large particular phenomenon such as the
variety of information systems, from current temperature, the price of a
simple ones that help maintain movie rentals or your age.
customer records to 2. INFORMATION – is data that have a
sophisticated systems that dynamically particular meaning within a specified
analyze and detect buying patterns and context.
predict when a specific customer is 3. BUSINESS INTELLIGENCE (BI) – a
about to switch to a competitor. collective information about your
customer, competitors business
4. BUSINESS INTELLIGENCE SYSTEMS partners, that gives you the ability to
- ISs whose purpose is to glean from raw make effective, important, and often
data relationships and trends that might strategic business decisions.
help organizations compete better are 4. KNOWLEDGE
called business intelligence (BI) systems. (1) It can provide
contextual
5. DECISION SUPPORT AND EXPERT explanation for BI.
SYSTEM (2) It can point toward
- Determines a decision, expert systems actions to take to
(ESS) rely on artificial intelligence gain BI.
 (3) It can include
intellectual assets
such as patents and
trademarks.
(4) It includes
organizational
know-how for
things such as best
practices.

INFORMATION QUALITY

Timeliness – There are two aspects here.

1. Do you have access to info when you need it?

2. Second, does the info describe the time period or DOWNWARD
periods you’re considering?
- Strategies, goals, and directives that
Form – There are two aspects here also. originate at a higher level are passed to
lower levels in downward information
Is the info in a form that is most useful to or usable by
flows. The upper level of an organization
you-audio, text, video, animation, graphical, or other.
develops strategies; the middle levels of
Second, is the information free of errors? an organization those Convert strategies
into tactics; and the lower levels of an
This is the concept of garbage-in garbage-out (GIGO). If organization deal with the operational
the info coming into your decision-making process is in details.
bad form.

HORIZONTAL
Location - Information is of no value to you if you can't - Information flows horizontally
access it. Ideally, your location or the information's between functional business units
location should not matter. IT can definitely create and work teams. The goal here is to
information quality here with technologies that support eliminate the old dilemma of "the right
telecommuting, workplace virtualization, mobile e- hand not knowing what the left hand is
commerce, and so on, so you can access information at doing."
or from any location.

Validity – is closely related to the second aspect of form OUTWARD/INWARD

above. Validity addresses the credibility of info.
- Information is communicated from and
to customers, suppliers, distributors,
UPWARD and other partners for the purpose of
doing business.
- Upward info flows describe the current
state of the organization based on its
daily transactions.

Upward Information granularity

- refers to the extent of detail within the

information. At lower organizational
levels, info exhibits fine granularity
because people need to work with
Another organizational perspective;
information in great detail.
• Internal Information – describes specific
operational aspects of an organization.
 • External Information – describes the 2. Supplier power
environment surrounding the organization. 3. Treat of substitute products or services
• Objective Information- quantifiably describes 4. Threat of new entrants
something that is known. 5. Rivalry among existing competitors
• Subjective Information- attempts to describe
something that is unknown. ➢ BUYER POWER
- Buyer power in the Five Forces Model is
high when buyers have many choices
TECHNOLOGY LITERACY from whom to buy, and low when their
A technology-literate knowledge worker. choices are few.

• knows how and when to apply technology. The • Competitive Advantage

"how" aspect includes knowing which - Competitive advantage is providing a
technology to purchase, how to exploit the product or service in a way that
many benefits of application software, and what customers value more than what the
technology infrastructure is required to get competition is able to do.
businesses connected to each other, just to • First=Mover Advantage
name a few. - A significant impact on gaining market
share by being the first to market with a
INFORMATION LITERARCY competitive advantage.
An information-literate knowledge worker
➢ SUPPLIER POWER
1. Can define what information is needed. - Supplier power in the Five Forces Model
2. Knows how and where to obtain information. is high when buyers have few choices
3. Understands the information once it is received. from whom to buy, and low when their
4. Can act appropriately based on the information choices are many.
to help the organization achieve the greatest
advantage. your organization will probably be both a
supplier (to customer organizations) and a
buyer, or customer (of other supplier
YOUR ETHICAL RESPONSIBILITIES organizations). As a customer of other supplier
organizations, you want to increase your buyer
Your roles as a technology-literate and information power. As a supplier to other organizations, you
literate knowledge worker extend far beyond using want to increase your supplier power, thus
technology and business intelligence to gain a reducing your customer's buyer power.
competitive advantage in the marketplace for your ➢ THREAT OF SUBSTITUTE PRODUCTS OR
organization. SERVICES
- The threat of substitute products or
services in the Five Forces Model is high
when there are many alternatives to a
product or service, and low when there
are few alternatives from which to
choose.

WEEK 4 • Switching Costs

- Switching costs are costs that make
MICHAEL PORTER’S FIVE FORCES MODEL customers reluctant to switch to
another product or service supplier. A
• The Five Forces Model helps business people switching cost does not necessarily have
understand the relative attractiveness of an to be an actual monetary cost.
industry and the industry's competitive
pressures in terms of the following five forces ➢ THREAT OF NEW ENTRANTS
- The threat of new entrants in the Five
1. Buyer power Forces Model is high when it is easy for
 new competitors to enter a market, and - Focus as a strategy is usually defined as
low when there are significant entry focusing on offering products and
barriers to entering a market. services;
1. To a particular market segment
• Entry Barrier or buyer group
An entry barrier is a product or service 2. Within a segment of a product
feature that customers have come to line, and/or
expect from organizations in a particular 3. To a specific geographic
industry and that must be offered by an market.
entering organization to compete and
survive. ABOVE THE LINE VERSUS THE BELOW LINE

➢ RIVALRY AMONG COMPETITORS

- The Rivalry among existing competitors
in the Five Forces Model is high when
competition is fierce in a market, and
low when competition is more
complacent.

PORTER’S 3 GENERIC STRATEGIES: BUILDING BUSINESS

STRATEGY

Michael Porter identified three approaches or strategies

to beating the competition in any industry;
1. Overall cost leadership
2. Differentiation
3. Focus

➢ OVERALL COST LEADERSHIP A typical income statement for a business has two main
- Overall cost leadership is defined by parts;
Porter as offering the same or better-
quality product or service at a price that 1. Revenues
is less than what any of the competition 2. Expenses
is able to do.
• Loss Leader • Revenues are monies your organization receives
- Loss leader is a product sold at or below from selling its products and services, and
cost to entice customers into a store in expenses are the costs it incurs providing those
the hope that they will also buy more products and services.
profitable products.
➢ DIFFERENTIATION
- Differentiation is defined by Porter as
offering a product or service that is
perceived as being “unique” in the
marketplace.
➢ FOCUS
A helpful conceptual framework for viewing the bigger
organizational picture and determining the use of IT in it
is the run-grow transform (RGT) framework, an approach
in which you allocate in terms of percentages how will
spend your IT dollars on various types of business
strategies.

• Run – optimize the execution of activities and

processes already in place. Seek organizational
growth through offerings products and services
faster and cheaper than the competition.

• Grow – increase market reach, product and

service offerings, expand market share, and so
on. Seek organizational growth by taking market
share from the competition.

• Transform – innovate business processes and/or

products and services in a completely new way,
move into seemingly different markets, and so
on, Seek organizational growth through new and
different means.
PRIMARY VALUE PROCESS

VALUE-CHAIN ANALYSIS The chain of primary value processes along the bottom
half takes in the raw materials and makes, delivers,
- Is a systematical approach to assessing markets and sells, and services your organization’s
and improving the value of business products or services.
processes within your organization to
further increase its competitive 1. Inbound logistics – receiving and warehousing
strengths. raw materials and distributing those raw
materials to manufacturing as needed.
2. Operations – processing raw materials into
finished products and services.
3. Outbound logistics – warehousing and
distributing finished products and services.
4. Marketing and Sales – identifying customer
needs and generating sales.
5. Service – supporting customer after the sale of
products and services.
SUPPORT VALUE PROCESS

- Support value processes along the top

half of the chain-firm infrastructure
STRATEGIC AND COMPETITIVE OPPORTUNITIES WITH
(culture, structure, control systems,
SCM
accounting, legal, and so on), human
resource management, technology - Overall, a tight supply chain
development, and procurement management system focuses on
(purchasing of raw materials)-support squeezing every penny possible out of
the primary value processes the supply chain process.
Thus, the primary focus of supply chain
WEEK 5
management may be described in terms
SUPPLY CHAIN MANAGEMENT of;

- Supply chain management (SCM) system

✓ Overall cost leadership (from
is an IT system that supports supply
Porter’s three generic
chain management activities by
strategies)
automating the tracking of inventory
✓ Below-the-line initiative (cost
and information among business
reduction)
processes and across companies.
✓ Running the organization (run-
grow-transform framework)
• DISTRIBUTION CHAIN
- Is simply the path a product or service
follows from the originator of the
• Lower costs in the supply chain
product or service to the end consumer.
lead to lower prices to
Holding onto inventory in a distribution
consumers, which in turn can
chain costs money, because whoever
increase market share and
owns the inventory has to pay for the
above-the-line revenue. A well-
operation of a warehouse or stores
designed supply chain
while waiting for someone to buy it.
management system helps your
organization by optimizing the
• JUST-IN-TIME
following specific supply chain
- Just-in-time (JIT) is a method for
activities;
producing or delivering a product or
service just at the time the customer
✓ Fulfillment- ensuring
wants it.
that the right quantity
of parts for production
• INTER-MODAL
or products for sale
TRANSPORTATION
arrive at the right
- Companies with suppliers around the
time.
globe often employ inter-modal
✓ Logistics- keeping the
transportation.
cost of transporting
- Inter-modal transportation is the use of
materials as low as
multiple channels of transportation-
possible consistent
railway, truck, boat, and so on-to move
with safe and reliable
products from origin to destination.
delivery.
✓ Production- ensuring
production lines
function
 smoothly because
high-quality parts are
available when
needed.
✓ Revenue and Profit-
ensuring no sales are
lost because shelves
are empty.
✓ Cost and price-
keeping the cost of
purchased parts and
prices of products at
acceptance levels.

• INFORMATION PARTNERSHIP • SALES FORCE AUTOMATION

- Two or more companies cooperating by (SFA) SYSTEMS
integrating their IT systems, thereby - SFA systems automatically track all the
providing customers with the best of steps in the sales process. The sales
what each can offer. process contains many steps, including
contact management, sales lead
tracking, sales forecasting and order
CUSTOMER RELATIONSHIP MANAGEMENT management, and product knowledge.
A customer relationship management (CRM) system uses
information about customers to gain insights into their
needs, wants, and behaviors in order to serve them IT SUPPORT FOR CUSTOMERS RELATIONSHIP
better. MANAGEMENT

• MULTI-CHANNEL SERVICE
DELIVERY
- Is the term that describes a company’s
offering multiple ways in which
customers can interact with it. E-mail,
fax, phone, and the Web are all ways in
which most companies interact with
their customers.

The overriding goal of CRM is to limit such negative

interactions and provide customers with positive
experiences.

CRM systems typically include such functions as

✓ Sales force automation FRONT-OFFICE SYSTEM

✓ Customer service and support
✓ Marketing campaign management and analysis - Are the primary interface to customers
and sales channels; they send all the
customers information they collect to
the database.
It’s important to note that CRM is not just the software. It BACK-OFFICE SYSTEM
is a total business objective which encompasses many
different aspects of a business including software, - Are used to fulfill and support customer
hardware, services, support, and strategic business goals. orders and they also send all their
customer information to the database.
-