Intro To MIS

Management Information System
Learning Outcomes:
How Information Systems Are Transforming Business (1 of
2)
• In 2017, more than 140 million businesses had dot-com addresses registered
• 273 million adult Americans online; 190 million purchased online
• As of January 2020, the number of internet users in the Philippines grew to 73
million people, accounting for more than half of the total population. The digital
population mostly belong to the age group of 16 years old and above.
(www.statista.com)
• 269 million Americans have mobile phones
• As of 2019, there were nearly 169 million mobile subscribers in the Philippines.
Mobile phones have been a significant device for many Filipinos.
(www.statista.com)
• 200 million use social networks
• In the Philippines alone, there were almost 74 million Facebook users as of
2019. Furthermore, it held nearly 93 percent of the country's social media
market share as of 2020. (www.statista.com)
How Information Systems Are Transforming Business (2 of
2)
• Social networking tools being used by businesses to connect

employees, customers, and managers
• Internet advertising continues to grow at more than 20 percent
per year
• New laws require businesses to store more data for longer
periods
• Changes in business result in changes in jobs and careers
What’s New in Management Information
Systems (1 of 3)
• I T Innovations
• Cloud computing, big data, Internet of Things
• Mobile digital platform
• AI and machine learning
• New Business Models
• Online streaming music and video
• On-demand e-commerce services
What’s New in
Management Information
Systems (2 of 3)
• E-commerce Expansion
• E-commerce expands to nearly $1 trillion in 2018
• Netflix now has more than 125 million U S
subscribers
• Online services now approach online retail in
revenue
• Online mobile advertising now larger than desktop
• Management Changes
• Managers use social networks, collaboration tools
• Business intelligence applications accelerate
• Virtual meetings proliferate
What’s New in
Management Information
Systems (3 of 3)
• Firms and Organizations Change
• More collaborative, less emphasis on hierarchy
and structure
• Greater emphasis on competencies and skills
• Higher-speed/more accurate decision making
based on data and analysis
• More willingness to interact with consumers
(social media)
• Better understanding of the importance of I T
Globalization Challenges and Opportunities: A
Flattened World
• Internet and global communications have greatly changed how

and where business is done
• Drastic reduction of costs of operating and transacting on
global scale
• Competition for jobs, markets, resources, ideas
• Growing interdependence of global economies
• Requires new understandings of skills, markets,
opportunities
• Challenges yes, but opportunities as well
• Information systems enable globalization of commerce
The Emerging Digital Firm
• In a fully digital firm:

• Significant business relationships are digitally enabled
and mediated
• Core business processes are accomplished through
digital networks
• Key corporate assets are managed digitally
• Digital firms offer greater flexibility in organization and
management
• Time shifting, space shifting
Strategic Business Objectives of Information Systems (1 of
2)
• Growing interdependence between:

• Ability to use information technology
• Ability to implement corporate strategies and achieve
corporate goals
Strategic Business Objectives of Information Systems (2 of
2)
• Firms invest heavily in information systems to achieve six

strategic business objectives:
• Operational excellence
• New products, services, and business models
• Customer and supplier intimacy
• Improved decision making
• Competitive advantage
• Survival
Figure 1. The Interdependence Between Organizations and
Information Systems
Operational Excellence
• Improved efficiency results in higher profits

• Information systems and technologies help improve efficiency and
productivity
• Example: Walmart
• Power of combining information systems and best business practices
to achieve operational efficiency—and over $485 billion in sales in
2017
• Most efficient retail store in world as result of digital links between
suppliers and stores
New Products, Services, and Business Models
• Information systems and technologies enable firms to create new

products, services, and business models
• Business model: how a company produces, delivers, and sells its
products and services
• Example: Apple
• Transformed old model of music distribution with iTunes
• Constant innovations—iPod, iPhone, iPad, etc.
Customer and Supplier Intimacy
• Customers who are served well-become repeat customers who

purchase more
• Example: Mandarin Oriental Hotel
• Uses IT to foster an intimate relationship with customers, keeping
track of preferences, etc.
• Close relationships with suppliers result in lower costs
• Examples: J C Penney
• J C Penney uses IT to enhance relationships with supplier in Hong
Kong
Improved Decision Making (1 of 2)
• Without accurate information:

• Managers must use forecasts, best guesses, luck
• Results in:
• Overproduction, underproduction
• Misallocation of resources
• Poor response times
Improved Decision Making (2 of 2)
• Poor outcomes raise costs, lose customers

• Real-time data improves ability of managers to make decisions.
• Example: Verizon’s web-based digital dashboard to provide managers
with real-time data on customer complaints, network performance,
line outages, etc.
Competitive Advantage
• Often results from achieving previous business objectives

• Advantages over competitors
• Charging less for superior products, better performance, and better
response to suppliers and customers
• Examples: Apple, Walmart, UPS are industry leaders because they
know how to use information systems for this purpose
Survival
• Businesses may need to invest in information systems out of

necessity; simply the cost of doing business
• Keeping up with competitors
• Citibank’s introduction of A T Ms
• Federal and state regulations and reporting requirements
What is an Information System? (1 of 3)
Figure 2. Data and Information
What Is an Information System? (2 of 3)
• Activities in an information system that produce information:

• Input
• Processing
• Output
• Feedback
• Sharp distinction between computer or computer program versus
information system
What is an Information System? (3 of 3)
• Feedback
• Output is returned to appropriate members of organization to
help evaluate or correct input stage
• Computer/computer program vs. information system
• Computers and software are technical foundation and tools,
similar to the material and tools used to build a house
Figure 3. Functions of an Information System
Dimensions of Information Systems
• Organizations
• Management
• Technology
Figure 4.
Information
Systems Are
More Than
Computers
Dimensions of Information Systems:
Organizations (1 of 2)
• Hierarchy of authority, responsibility
• Senior management
• Middle management
• Operational management
• Knowledge workers
• Data workers
• Production or service workers
Figure 5. Levels
in a Firm
Organizations (2 of 2)
• Separation of business functions

• Sales and marketing
• Human resources
• Finance and accounting
• Manufacturing and production
• Unique business processes
• Unique business culture
• Organizational politics
Management
• Managers set organizational strategy for responding to business

challenges
• In addition, managers must act creatively
• Creation of new products and services
• Occasionally re-creating the organization
Dimensions of
Information
Systems:
Technology
It Isn’t Just Technology: A Business Perspective
on Information Systems (1 of 3)
• Information system is instrument for creating value

• Investments in information technology will result in superior returns
• Productivity increases
• Revenue increases
• Superior long-term strategic positioning
• Business information value chain

• Raw data acquired and transformed through stages that add value to
that information
• Value of information system determined in part by extent to which it
leads to better decisions, greater efficiency, and higher profits
• Business perspective
• Calls attention to organizational and managerial nature of
information systems
• Investing in information technology does not guarantee good returns

• There is considerable variation in the returns firms receive from systems
investments
• Factors
• Adopting the right business model
• Investing in complementary assets (organizational and management
capital)
Figure 6. The
Business
Information
Value Chain
Figure 7. Contemporary
Approaches to Information
Systems
Technical
Approach
Behavioral
Approach
Sociotechnical System
• Management information systems
• Combine computer science, management science, operations
research, and practical orientation with behavioral issues
• Four main actors
• Suppliers of hardware and software
• Business firms
• Managers and employees
• Firm’s environment (legal, social, cultural context)
References
• Management Information System: Managing the Digital Firm 16TH
Edition by Laudon & Laudon
• www.statistica.com

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Management Information System

• Social networking tools being used by businesses to connect

• Internet and global communications have greatly changed how

• In a fully digital firm:

• Growing interdependence between:

• Firms invest heavily in information systems to achieve six

• Improved efficiency results in higher profits

• Information systems and technologies enable firms to create new

• Customers who are served well-become repeat customers who

• Without accurate information:

• Poor outcomes raise costs, lose customers

• Often results from achieving previous business objectives

• Businesses may need to invest in information systems out of

• Activities in an information system that produce information:

• Separation of business functions

• Managers set organizational strategy for responding to business

• Information system is instrument for creating value

• Business information value chain

• Investing in information technology does not guarantee good returns

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