Introduction to Management Information Systems (MIS)

1. Introduction to Management Information Systems (MIS) Minder Chen, Ph.D. Professor of Management Information Systems Martin V. Smith School of Business and Economics CSU Channel Islands Email: Minder.Chen@csuci.edu

2. What is MIS? • M: Management • Business Functions/Processes, Organizations, and Human Behaviors • I: Information • Contents: Data, Information, Knowledge • Processes: Create, Gather/capture/elicit, Store, Organize, Consolidate & Condense, Filter, Deliver, and Share • S: System (Information Systems/Information Technology) • Input-Process-Output and Storage • General Systems Theory (GST) • http://en.wikipedia.org/wiki/Management_information_system • http://en.wikipedia.org/wiki/Systems_thinking • http://en.wikipedia.org/wiki/Systems_theory

3. A System View of an Information System Information System Boundary Environments Information System (Producer) Data Providers Input Process Output Data Sources/ Business events Information Destinations • Consumers • Users • organization units Main memory Data storage Control Secondary storage Procedure What are the hardware options or Inputs, Outputs, Processing, and Storages?

4. Characteristics of Good Information • Accurate • Timely • Relevant (provide context) to decisions • Just sufficient • Worth its cost (to justify its benefits) Information overloading • Deliver just enough accurate, relevant, and timely information to the right persons to make better decisions. • How much energy does a Google search consume? • 0.0003 kWh of energy per search; a Google search uses just about the same amount of energy that your body burns in ten seconds.

5. Information Quality (IA) and Categories Source: http://sloanreview.mit.edu/files/2008/12/3947-ex3-lo7.png http://sloanreview.mit.edu/article/manage-your-information-as-a-product/

6. Presentation of Information

7. Another Version

8. A Picture Is Worth a Thousand Words • 24 June – 14 December 1812 https://en.wikipedia.org/wiki/File:Napoleons_retreat_from_moscow.jpg

9. Managing Information as a Resource • The resources of the industrial age were tangible things (e.g., raw materials and human resources) and easily understood. • In the emerging post-industrial society, there is little understanding of the characteristics of information – the basic yet abstract/intangible resource. • Both physical resources and information could be mined, processed, bought, sold, and managed. Harland Cleveland, "Information as Resource," The Futurist, December 1982, 34-39.

10. Information Life Cycle Information Data Decision • Intelligence • Design • Choice Action * http://faculty.csuci.edu/minder.chen/MIS310/Reading/20000905cleveland.pdf

11. Characteristic of Information • Expandable: Information explosion*  Reduce information overload to reduce uncertainty in decision making. • Compressible: Sorting, categorizing, filtering, aggregating, summarizing**, and consolidating. • Substitutable: Substitute with other resources via productivity improvement. • Transportable: Data communications and networking. • Diffusive: Spreading (sharing) and leaking (Security & privacy) • Sharable: Sharing information is a shared transaction instead of an exchange transaction. * Digital Universe: The world’s information is doubling every two years. In 2011 the world will create a staggering 1.8 zettabytes.  ** Summly, a news-summarizing app acquired by Yahoo for $30 millions.

12. Even the Caveman Needs Knowledge to Survive The information-knowledge-wisdom hierarchy. The caveman has lots of information; he selects and organizes useful information into knowledge, but he does not achieve wisdom until he has integrated his knowledge into a whole that is more than useful than the sum of its parts. Source: Harlan Cleveland, "Information as a Resource," The Futurist, December 1982, 34-39.

13. Source: IBM Academic Program course materials

14. The Knowledge Value Chain: Data Source: IBM Academic Program course materials

15. The Knowledge Value Chain: Information Source: IBM Academic Program course materials

16. The Knowledge Value Chain: Knowledge Source: IBM Academic Program course materials

17. Knowledge Is Not Enough Source: IBM Academic Program course materials

18. DIKW (Information) Hierarchy Know why Wisdom Integrating: Connect the dots Knowledge Know how Learning: Derive rules/policies through experiences & patterns Information Know what Analyzing: To support decision making Know nothing Data Observing: Description of events Happening/Doing Event

19. DIKW Hierarchy: version 2 • T: Tacit knowledge • E: Explicit knowledge http://en.wikipedia.org/wiki/DIKW_Pyramid http://en.wikipedia.org/wiki/File:DIKW.png

20. Moving Up the DIKW Hierarchy • Where is the Life we have lost in living? • Where is the wisdom we have lost in knowledge? • Where is the knowledge we have lost in information? T.S. Eliot, Choruses from “The Rock”, 1934

21. Information as Products/Services • CarFax: CARFAX - Vehicle History Reports and VIN number check - http://www.carfax.com(1 CARFAX Report $39.99) • Britannica*: http://www.britannica.com/ • Blown to Bits: How the New Economics of Information Transforms Strategy • The printed version was blown away by three disruptive forces • A comeback act? (iPad app) • Why Britannica matter? No printed version, 2012. • Information as services • Google: Searching for information (Google would provide “access to the world's information in one click”) • Facebook: Social networking ("Facebook's mission is to give people the power to share and make the world more open and connected." ) *Source: Jorge Cauz, “Encyclopaedia Britannica's President on Killing Off a 244-Year-Old Product,” Harvard Business Review, Mar 01, 2013.

22. CD-ROM based Encyclopedia • Encarta (1993), Grolier, and Compton, list for $50 to $70; usually bundled with a new PC for free. • Content quality and distribution channel • Cost: • With a marginal manufacturing cost of $1.50 per copy, the CD-ROM as freebie makes good economic sense. • The marginal cost of Britannica, in contrast, is about $250 for production plus about $500 to $600 for the salesperson’s commission.

23. Britannica Sales WWW invented 1990 Netscape 1995 Google IPO, 2004 Google Inc. incorporated, 1999 Encarta discontinued 2008 Source: http://hbr.org/2013/03/encyclopaedia-britannicas-president-on-killing-off-a-244-year-old-product/ar/1

24. The Rise of Wikipedia Disruptive force

25. Britannica vs. Wikipedia Wiki is an open source content management system (CMS). Wikipedia uses wiki as a development tool.

26. Information Systems Components • Computers • Server • PC • Mobile • Networking Information Individuals, Groups, Departments, Enterprise-wide, Customers, Trading partners System SW, Application SW Data, Information, Knowledge Manual Procedures and Business Process Source: adapted from Using MIS 3e

27. huMan, Market, Money, Method, Machine, Material, Message • Business environments • Market demands • Technology development • Social trends • Locations/Localization Man: Human Resource, Employees Market: Customers People $$$ Who?   Message: Information Money: Accounting, Finance, Investment Processes Things Vision  Why? Goals/Objectives/ Performance measures How, When? What? Machine: Property, Facility, Technology Material: Raw material, Product Method: Technique, Process, Project, Task

28. Organizational Hierarchy and Information Aggregated OLAP External Planning Control Operation Level of Detail source Processing Detail Internal OLTP

29. Information Systems Triangle Operational Database Data Warehouse Data Mart Enterprise Workflow BIDSS EIS OLAP Online Analytical Processing OLTP Online Transaction Processing Business Process Workflow Data Information Messaging Systems Knowledge Workflow, Collaboration, Groupware

30. Classification of Information Systems • Transaction Processing System • Online transaction processing system (OLTP) • Batch, Online, real-time • Management support system • Decision support system (DSS), Executive information system (EIS), and Digital Dashboard • Data warehouse, Business intelligence (BI), and Online Analytical Processing (OLAP) • Units involved • Individual, group, and departmental, enterprise-wide, inter-organizational, and social networking systems • Strategic Information Systems • Based on IT Platforms • Traditional desktop/client-server applications • Web-based applications (e.g., Electronic Commerce) • Mobile applications

31. The Extended Enterprise Buy Make/Add Value Sell B2B E-Commerce B2C or B2B E-Commerce Back Office Front Office Customers Suppliers E-Business: Virtual and Dynamic Enterprise Warehousing Logistic/Transportation Order Fulfillment Manufacturing Finance/Accounting Engineering HR Marketing Sales Support/Service Demand Chain Supply Chain Back Office Integration Enterprise Resource Planning Customer Relationship Management Supply Chain Management

32. MIS • Management BY Information Systems • Management OF Information Systems Resources Other Resources: HR, Money, Material, etc. Information Information Systems Manages As Products or Services • Managing Information as a Resource (i.e., Inventory Info. System) • Selling Information as Products (i.e., CarFax) • Offering Information/IS as Services (i.e., Facebook, Google)

33. Summary • What information does one may need to obtain to do his/her works? • What kinds of information systems/technologies may be the best to manage such information? • Be sensitive to the information, IS, and IT. • Know how to apply conceptual frameworks introduced this module in understanding information needs, but start with the analysis of decisions and/or business processes.

34. IT, IS and IM Source: Competing with Information: A Manager's Guide to Creating Business Value with Information Content

35. Key Frameworks

36. Information Systems Applications in a Firm Customer Relationship Management (CRM)

37. Information as: Product vs. By-Product http://sloanreview.mit.edu/article/manage-your-information-as-a-product/ http://sloanreview.mit.edu/files/2008/12/3947-ex1-lo7.png

38. COBIT’s Information Criteria (I) • Effectiveness deals with information being relevant and pertinent to the business process as well as being delivered in a timely, correct, consistent and usable manner. • Efficiency concerns the provision of information through the optimal (most productive and economical) use of resources. • Confidentiality concerns the protection of sensitive information from unauthorized disclosure. (Sony PlayStation Network hacked) • Integrity relates to the accuracy and completeness of information as well as to its validity in accordance with business values and expectations.

39. COBIT’s Information Criteria (II) • Availability relates to information being available when required by the business process now and in the future. It also concerns the safeguarding of necessary resources and associated capabilities. • Compliance deals with complying with the laws, regulations and contractual arrangements to which the business process is subject, i.e., externally imposed business criteria as well as internal policies. (Sarbanes–Oxley Act) • Reliability relates to the provision of appropriate information for management to operate the entity and exercise its fiduciary and governance responsibilities.

40. Exercise – 20-minute break and 5-minute presentation • Describe your background and experiences • Company name and the industry it belongs to • Position and general responsibility • Three major decisions • Pick the most important decision involved in this position and find out the following: • Characteristic of the decision: Operational vs. Strategic; Structured vs. Unstructured; Routine vs. Non-routine • What information is current used to support the decision • What kind of source data should be collected to generate the information needed • Under which task is this decision performed • What is the broader business process that this task belongs. • What additional improvements can be made from the perspectives of information systems and decision making

41. Information System Applications