Chapter 1 - Management information systems: Business driven MIS. Learning objectives of this chapter include: Describe the information age and the differences among data, information, business intelligence, and knowledge; identify the different departments in a company and why they must work together to achieve success; explain systems thinking and how management information systems enable business communications.
CHAPTER ONE MANAGEMENT INFORMATION SYSTEMS BUSINESS DRIVEN MIS © 2014 by McGraw-Hill Education This is proprietary material solely for authorized instructor use Not authorized for sale or distribution in any manner This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part 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 © 2014 by McGraw-Hill Education This is proprietary material solely for authorized instructor use Not authorized for sale or distribution in any manner This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part LEARNING OUTCOMES Describe the information age and the differences between data, information, business intelligence, and knowledge Identify the different departments in a company and why they must work together to achieve success Explain systems thinking and how management information systems enable business communications COMPETING IN THE INFORMATION AGE Did you know Avatar, the movie, took over yrs to make and cost $450 million Lady Gaga’s real name is Joanne Angelina Germanotta It costs $2.6 million for a 30second advertising time slot during the Super Bowl COMPETING IN THE INFORMATION AGE act - The confirmation or validation of an event or object nformation age - The present time, during which infinite quantities of facts are widely available to anyone who can use a computer 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 COMPETING IN THE INFORMATION AGE The core drivers of the information age • Data • Information • Business intelligence • Knowledge Data Data - Raw facts that describe the characteristics of an event or object 10 Information Information - Data converted into a meaningful and useful context 27 THE FIVE FORCES MODEL – EVALUATING INDUSTRY ATTRACTIVENESS Porter’s Five Forces Model 28 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 with a particular organization 29 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 30 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 31 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 32 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 33 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 34 THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS Porter’s Three Generic Strategies 35 THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS Porter’s Three Generic Strategies 36 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 37 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 38 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 39 VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES Porter’s Value Chain 40 VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES Value Chain and Porter’s Five Forces Model 41 LEARNING OUTCOME REVIEW Now that you have finished the chapter please review the learning outcomes in your text ...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... characteristics of an event or object 10 Information Information - Data converted into a meaningful and useful context 11 Business Intelligence Business intelligence Information collected from multiple... Interdependently 15 THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS 16 THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS 17 THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS Systems thinking – A way of monitoring