CHAPTER ONE MANAGEMENT INFORMATION SYSTEMS BUSINESS DRIVEN MIS

1. CHAPTER ONE MANAGEMENT INFORMATION SYSTEMS BUSINESS DRIVEN MIS

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 – 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

3. SECTION 1.1 BUSINESS DRIVEN MIS

4. 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

5. COMPETING IN THE INFORMATION AGE Did you know . . . • Avatar, the movie, took over 4 yrs to make and cost $450 million • Lady Gaga’s real name is Joanne Angelina Germanotta • It costs $2.6 million for a 30-second advertising time slot during the Super Bowl

6. COMPETING IN THE INFORMATION AGE • Fact- The confirmation or validation of an event or object • Information age - The present time, during which infinite quantities of facts are widely available to anyone who can use a computer

7. 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

8. COMPETING IN THE INFORMATION AGE • The core drivers of the information age • Data • Information • Business intelligence • Knowledge

9. Data • Data- Raw facts that describe the 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 sources such as suppliers, customers, competitors, partners, and industries that analyzes patterns, trends, and relationships for strategic decision making

12. Knowledge • Knowledge- Skills, experience, and expertise coupled with information and intelligence that creates a person’s intellectual resources • Knowledge worker – Individual valued for their ability to interpret and analyze information

13. THE CHALLENGE: DEPARTMENTAL COMPANIES Common Departments Working Independently

14. THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS Common Departments Working 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 the entire system by viewing multiple inputs being processed or transformed to produce outputs while continuously gathering feedback on each part

18. THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS • Management Information Systems (MIS) – A business function, like accounting and human resources, which moves information about people, products, and processes across the company to facilitate decision-making and problem-solving

19. MIS Department Roles and Responsibilities • Chief information officer (CIO) – Oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives • Chief knowledge officer (CKO) - Responsible for collecting, maintaining, and distributing the organization’s knowledge • Chief privacy officer (CPO) – Responsible for ensuring the ethical and legal use of information

20. MIS Department Roles and Responsibilities • Chief security officer (CSO) – Responsible for ensuring the security of IT systems • Chief technology officer (CTO) – Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT

21. SECTION 1.2 BUSINESS STRATEGY

22. LEARNING OUTCOMES • Explain why competitive advantages are temporary • Describe Porter’s Five Forces Model and explain each of the five forces • Compare Porter’s three generic strategies • Demonstrate how a company can add value by using Porter’s value chain analysis

23. IDENTIFYING COMPETITIVE ADVANTAGES • Business strategy – A leadership plan that achieves a specific set of goals or objectives such as • Developing new products or services • Entering new markets • Increasing customer loyalty • Attracting new customers • Increasing sales

24. IDENTIFYING COMPETITIVE ADVANTAGES

25. IDENTIFYING COMPETITIVE ADVANTAGES • Competitive advantage – A product or service that an organization’s customers place a greater value on than similar offerings from a competitor • First-mover advantage – Occurs when an organization can significantly impact its market share by being first to market with a competitive advantage

26. IDENTIFYING COMPETITIVE ADVANTAGES • Competitive intelligence – The process of gathering information about the competitive environment to improve the company’s ability to succeed • Competitive intelligence tools • Porter’s Five Forces Model • Porter’s Three Generic Strategies • Porter’s Value Chain Analysis

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 do 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 • Outboundlogistics - 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