Module 1: Introduction to MIS

1. Module 1: Introduction to MIS

2. Objectives • Understand the systems approach • Why is technology important? • Understand Porters 5 forces framework • Understand the Value chain framework • Differentiate between types of systems

3. Systems approach to MIS

4. Management • The act, art, or manner of managing, handling, controlling directing, etc. • Origin: to train (a horse) in his paces; cause to do exercises of the manage • 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

5. Information • Derived from the Latin verb informo, informare, meaning to “give form to” • 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 • Data that have been shaped by humans into a meaningful and useful form. Schoderbek, Schoderbek & Kefalas

6. SYSTEM • A set or arrangement of things so related or connected as to form a unity or organic whole • 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. • A method or plan of classification or arrangement Webster’s New World Dictionary

7. SYSTEM A system is defined as (1) a set (2) of objects (3) together with relationships (4) 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

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

9. The Organization as a System Science Technology Products, goods and services Labor Management Money Process Output Marketable waste Input Materials and Equipment Management Pollution Government Public Environment Political, Legal, Social, Physical, Economic, …

10. 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 Process Output Input o i Feedback 0 p o p I

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

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

13. CHALLENGES • Technology advances • Productivity challenge • Strategic business challenge • People challenge

14. Information Systems1 -- FOCUS • People • Organizations • Technology • 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.

15. 5 forces and value chainOrganizational processes

16. 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.

17. Porter’s Competitive Forces Model • 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 The model recognizes five major forces that could endanger a company’s position in a given industry. External Competitive Forces

18. Porter’s Competitive Forces Model Competitive Forces

19. 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

20. The Value Chain According to the value chain model (Porter, 1985), the activities conducted in any organization can be divided into two parts: primary activities and support activities. • Primary activities 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 chain. • Inbound logistics (inputs) • Operations (manufacturing and testing) • Outbound logistics (storage and distribution) • Marketing and sales • Service

21. The Value Chain (Continued) • Unlike the primary activities, which directly add value to the product or service, the support activities are operations that support the creation of value (primary activities) • 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.

22. The Value Chain (Continued) Secondary Activities Value Primary Activities

23. IBM’s Value Chain Model

24. Does IT matter?

25. Types of systems

26. Information System Focus Focus on information systems advantage has moved upward through the organization. Executive Management 1990’s Middle Management 1980’s Operational Management 1960’s - 1970’s

27. Organization Levels and Types of IS Used Top Level ??? Strategic Level GSS/EIS Tactical Level MIS/DSS/GSS/EIS MIS/DSS/KWS Knowledge Level TPS Operational Level

28. Information System Focus • 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

29. 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. Knowledge Level

30. 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

31. 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

32. Information Systems Process Systems and Knowledge Systems

33. Characteristics of Information System Capabilities 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.

34. Lewin’s Change Model • •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

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

36. Change • 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

37. Strategic Role of ISHow Businesses Use Information Systems & Information Systems: Challenges and Opportunities

38. SYSTEM INTERDEPENDENCE INTERDEPENDENCE HARDWARE BUSINESS Strategy Rules Procedures SOFTWARE DATABASE TELE-COMMUNICATIONS ORGANIZATION INFORMATION SYSTEM