Module 1: Introduction to MIS

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Objectives • Understand the systems approach • Why is technology important?

• Understand Porters 5 forces framework • Understand the Value chain framework • Differentiate between types of systems

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Systems approach to MIS

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Management

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

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

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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

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Information

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

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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

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

Schoderbek, Schoderbek & Kefalas

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SYSTEM

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

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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.

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A method or plan of classification or arrangement Webster’s New World Dictionary

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SYSTEM

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

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.

Schoderbek, Schoderbek & Kefalas

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Individual Information Processing System Environment Input Sensory Information - Visual - Auditory - Kinesthetic - Olfactory Memory Personal History Processing Brain Cognitive Frames - Assumptions - Criteria Internal States Output Behaviors Macro - Speaking - Eating - Pointing Micro - Heart Rate - Voice Temp - Skin Temp

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The Organization as a System Labor Money Materials and Equipment Science Technology Input Management Process Management Output Government Public

Political, Legal, Social, Physical, Economic, …

Products, goods and services Marketable waste Pollution Environment

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Diagram of a System’s Parameters, Boundary, and Environment System’s environment System’s boundary i p o From other systems To other systems i p i p o Input Process Output o i Feedback 0 p o p I

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The Organization, Its Resources and Its Environment Customers Labor Material and Equipment The organization Ecology Government Input Process Output Feedback Capital Land Technology Indicates degree of control, alternatively, resources Indicates degree of independence or, alternatively, environment Indicates the boundary demarking the system from its environment General Public Competitors

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Socio-Technical System Social System STRUCTURE Technical System TECHNOLOGY MIS (Direct) PEOPLE Socio-Technical Model as a Work System TASKS

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CHALLENGES

• • • •

Technology advances Productivity challenge Strategic business challenge People challenge

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Information Systems

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-- FOCUS

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People

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Organizations

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Technology

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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.

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5 forces and value chain

Organizational processes 15

Competitive Intelligence

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

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

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.

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Porter’s Competitive Forces Model

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

• • • • • 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 External Competitive Forces 17

Porter’s Competitive Forces Model

Competitive Forces 18

The Value Chain

Value 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 19

The Value Chain

According to the

value chain model

conducted in any organization can be divided into two parts: primary activities and support activities.

(Porter, 1985), the activities 

Primary activities

chain.

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   Inbound logistics (inputs) Operations (manufacturing and testing)    Outbound logistics (storage and distribution) Marketing and sales Service 20

The Value Chain

(Continued)

 Unlike the primary activities, which directly add value to the product or service, the activities)

support activities

are operations that support the creation of value (primary     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.

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The Value Chain

(Continued)

Secondary Activities Value Primary Activities 22

Customers

IBM’s Value Chain Model

Customer Collaberation CRM Sales Fufillment Ibm.com

Value Chains High-Volume, Easily Configured Products Complex Configured Hardware OEM Hardware Distributed Software Entitled Software Services Financing Enterprise Information Management Business Policies and Rules Supplier Collaberation Integrated Product Development Procurement Integrated Supply Chain Self-Service Knowledge Management Collaboration and e-Learning Suppliers Employees 23

Does IT matter?

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Types of systems

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Information System Focus

Executive Management 1990’s Middle Management 1980’s Focus on information systems advantage has moved upward through the organization.

Operational Management 1960’s - 1970’s

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Organization Levels and Types of IS Used

Strategic Level Tactical Level Knowledge Level Operational Level

Top Level ???

GSS/EIS MIS/DSS/GSS/EIS MIS/DSS/KWS TPS

Information System Focus

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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

Operational Level

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Information System Focus

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

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Knowledge Level

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Information System Focus

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.

Strategic Level Tactical Level

TYPES OF INFORMATION SYSTEMS KIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & DATA WORKERS OPERATIONAL OPERATIONAL LEVEL MANAGERS SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN MARKETING RESOURCES

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Information Systems Process Systems and Knowledge Systems

Type of system Process systems Quantitative / Structured Quantitative / Structured Knowledge systems Qualitative / Unstructured Type of Data Examples of technology ERP / TPS Business intelligence Content Management Example SCM Data Mining Information Portals CRM Collaborative tools 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).

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Characteristics of Information System Capabilities

Capability TPS MIS DSS OAS EIS AI/ES IOS Orientation Level Focus Nature Data Information Decision Productivity Problem Knowledge Data Operational Management control All, strategic Operational Executive Operational Operational Task, Efficiency Resource Alternatives Structured Structured Unstructured Task, Efficiency Structured Status, Problem Flexible, easy Problem Task, Efficiency Structured 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.

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Lewin’s Change Model

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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 34

Change Resistance to Change Planned Change Causes

Fear of unknown Security No felt need Power/threatened Rumors Timing Resources Deliberate and intentional Response to performance gap Gap between actual & desired state Radical • massive restructuring “frame-breaking” Incremental • “frame-bending” • continuous improvement

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 35

Change

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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 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 36

Strategic Role of IS

How Businesses Use Information Systems & Information Systems: Challenges and Opportunities 37

SYSTEM INTERDEPENDENCE

INTERDEPENDENCE HARDWARE

BUSINESS Strategy Rules Procedures

ORGANIZATION SOFTWARE DATABASE TELE COMMUNICATIONS INFORMATION SYSTEM

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