Chapter 1 The Importance of MIS

Chapter 1The Importance of MIS Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99258 chen@jepson.gonzaga.edu

Opening Scenario: Fired? Why? • Jennifer gets fired from FlexTime after four months on job. • Her job was to find ways to increase revenues. • She only followed orders, did not show self initiative. • Did not become a team member. • Did not collaborate with others. • Did not understand business process concepts. • Being reliable, hard working, honest, and having integrity is important, but today they’re not enough.

Study Questions Q1: Why is Introduction to MIS the most important class in the business school? Q2: What is MIS? Q3: How can you use the five-component model? Q4: Why is the difference between information technology and information systems important? Q5: What is information? Q6: What are necessary data characteristics? Q7: 2022?

Why Information Systems? technology “Chaotics” Globalization and __________ are the two main forces that helped to create a new level of interlocking fragility in the world economy. While global interdependence works in everyone’s favor in good times, it rapidly spreads much pain and damage in bad times. by Philip Kolter and John Caslione (AMACOM 2009) N

Top-Ten Innovation Mistakes a Company Can Make During a Turbulent Economy • Fire talent. • __________________ • Reduce risk. • Stop product development. • Allow boards to replace growth-oriented CEOs with cost-cutting CEOs. • Retreat from globalization. • Allow CEOs to replace innovation as key strategy. • Change performance metrics. • Reinforce hierarchy over collaboration. • Retreat into walled castle. Cut back on technology.

Q1: Why Is Introduction to MIS the Most Important Class in the Business School? • 1. Learn to assess, evaluate, and apply emerging information technology to business • 2. Gain marketable skills and perspectives • 3. Moore’s Law creates infinite opportunities for innovation

First Reason Introduction MIS Most Important • Future business professionals need to be able to assess, evaluate, and apply emerging information technology to business. • You need the knowledge of this course (BMIS235) to attain that skill.

Second Reason Introduction MIS Most Important • The only job security that exists is “a marketable skill and the courage to use it.” • Because cost of data storage and data communications is essentially zero, any routine skill can and will be outsourced to the lowest bidder. - Learning What is the only entity that remained unchanged in the “Business”? • Learning to Learn and • Learning to Change

How Can I Attain Job Security? • Develop non-routine cognitive skills and ability • Knowledge and skills are your job security • Ability to cope with rapid technological change “Rapid technological change and increased international competition place the spotlight on the skills and preparation of the workforce, particularly the ability to adapt to changing technology and shifting demand. Shifts in the nature of organizations…favor strong nonroutine cognitive skills.”(Lynn A Kaoly and Constantijn W.A. Panis, The 21st Century at Work. RAND Corporation, 2004, p. xiv) • What are your marketable skills? “Capacity to Learn”

How Can Intro to MIS Help You Learn Nonroutine Skills? Abstraction: Concealing irrelevant details from the user. Abstraction is the process of temporarily ignoring underlying details so we can focus on the big picture of the large problem at hand Figure 1-2: Examples of Critical Skills for Nonroutine Cognition

Routine Skills and Moore’s Law • Because cost of data storage and data communications is essentially zero, any routine skill can and will be outsourced to the lowest bidder. • We will study Moore’s Law with its relation to ZERO advantage in the next slides.

Third Reason Introduction to MIS the Most Important Class in the Business School? • Ultimate reason: Moore’s Law • Moore’s Law (1965) • “The number of transistors per square inch on an integrated chip doubles every 18 months.” • Statement commonly misunderstood to be: • “The speed of a computer doubles every 18 months,” which is incorrect, but captures the sense of principle.

Ratio of Price to Performance of Computers

Consequences Moore’s Law • YouTube • iPad • Facebook • Woot.com • Pandora • Twitter • LinkedIn • Foursquare What happens when data storage and communications costs are essentially zero? Are There Cost-Effective Business Applications of Facebook and Twitter? (see next slide)

Are There Cost Effective Business Applications of Facebook and Twitter? • Fitness instructors post announcements via Twitter that participants follow. • FlexTime studio collects those tweets and posts them on its Facebook page. • Total cost to FlexTime studio? Zero. • How do you compute the benefit-cost ratio when the cost is zero? FREE ________ADVANTAGE – related to Moore’s Law?

Achieving Business Goals and Objectives • Q/A: “Everyone has a Facebook presence, therefore, I should also develop my own one” . • YES/NO • What questions should be asked (clarified) before making the decision? • “What is the purpose of our Facebook page?” • “What is it going to do for us?” • “Is Facebook the best choice?” • “Should we be using Microsoft Vine, instead?” • “Are the costs of maintaining the page sufficiently offset by the benefits?” Information systems exist to help people in business achieve the goals and objectives of that business

What is MIS? • Management, Use and AligningInformation Systems to Achieve Business Strategies (and consequently their goals and objectives). • Computer-based information system • (video) • More to be explained in Part II.

Management and Use of Information Systems Management • Information systems are built for business professionals (you) to use. • You need to take an active role in specifying system requirements and in managing development projects to ensure that the system meets your needs and the organization’s needs (user involvement). Use • You need to learn how to use the system to achieve business goals. • You are responsible for the system and data security. • You must ask the right questions

What is MIS? • Information systems components (video link) • Hardware—desktops, laptops, PDAs • Software—operating systems, application programs • Data—facts and figures entered into computers • Procedures—how the other four components are used • People—users, technologists, IS support Figure 1-3 Five Components of an Information System what is the direction of degree of difficulty?

Q2: What Is MIS? (Summary) Business professionals need to: Take an active role in IS to ensure that systems meet their needs Understand how IT systems are constructed Consider users’ needs during development Learn how to use information systems Take into account ancillary IT functions (Security, Backups, etc.)

How Can You Use the Five-Component Framework? • The Most Important Component – • Quality of your thinking • Change the way your brain works • Know how to use information systems YOU [Video] Figure 1-4 Characteristics of the Five Components

Components Ordered by Difficulty and Disruption Five IS components evaluated based on order of ease of change and amount of organizational disruption. • Hardware is simple to order and install. • Obtaining or developing new programs is more difficult. • Creating new databases or changing structure of existing databases is more difficult. • Changing procedures, requiring people to work in new ways, is even more difficult. • Changing personnel responsibilities and reporting relationships and hiring and terminating employees are both very difficult and very disruptive. - create competitive advantage as they are more difficult to be replicated/replaced.

Q3: How Can You Use the Five-Component Model? (Summary) • Consider high-tech vs. low-tech alternatives • Understand scope of new systems • Remember components ordered by difficulty and disruption

Next Class • 1. Complete reading the rest of chapter. • 2. Read chapter Case Study 1: The Amazon of Innovation (1,2,3,5,6; p.27-29) • Prepare answers for all seven questions and turn in a hardcopy using MS/Word next class. • We will also conduct case discussion. • 3. Read Ethics Guide (Situations A,B,C Q:1&2; p.16-17) and prepare for class discussion • 4. If you are asked to present your answer for case study (or “Guide”) questions but you do not prepare for them, there will be “10” points off every time from your final course grade.

IS vs. IT ? IS = IT Why?

INFORMATION SYSTEMS Components of Information Systems (MIS/IS) – Managerial Perspective ORGANIZATIONS TECHNOLOGY MANAGEMENT TM -29 Dr. Chen, The Challenge of the Information Systems Technology

Information Systems (IS) are more than just computer hardware and software. It is not just developing business applications programs Information Systems include: Information Technology Management Organization Ultimately, IS are used as strategic tool to improve/create an organization’s competitive advantage. What is Information Systems?

Difference Between Information Technology and Information Systems? • Information technology (IT) pertains to things you buy: • Hardware; Software; Data components • Things you can buy or lease: • Products; Methods; Inventions • Standards (obtain predesigned procedures) • Information technology drives the development of new information systems. • You can buy IT, but you cannot buy IS. - competitive advantage since they are difficult to be replaced/replicated.

How can you enjoy/apply MIS ... improve • To _________the information content of the data, • to _________the valuable information in a user-friendly, intuitive, and easy to understand way, and • to ________ knowledge workers of today and tomorrow. present empower

Roles of Information Systems Automates Informates Innovates/ Transforms

Q4: Why Is Difference Between IT and IS Important? (Summary) IS = IT + Management + Organization • Can buy or lease hardware, software licenses, databases and predesigned procedures • People require training, overcoming employees’ resistance to change, managing employees using new system IS = IT + Procedures + People (text) Avoid common mistake: You cannot buy an IS

SUMMARY Information System (IS) should be an organizational and management solution, based on information technology (IT), to a challenge posed by the environment.

Q5: What Is Information? • Information is knowledge derived from data • Data in a meaningful context • Data processed by summing, ordering, averaging, grouping, comparing, etc. • “A difference that makes a difference” • Where is information? • It’s in Your Head

What Is Information? Does this graph contain information?

Which is data? Information? Context Change Process Figure (Extra)

Which is data? Information? • A student’s name • A student’s transcript record • Unit price of iPod touch • Monthly sales amount of MP3 players • Fall enrollment of students • Fall enrollment of students from 2001 – 2009 • Enrollment comparisons of students at GU vs. other peer universities • Users really want is • Information

DATA What is Information ? INFORMATION What is 80/20 rule? How to apply it to this scenario? Information is refined data.

DATA What is Information ? INFORMATION Trivial many (80%)? or 80% of information/ valuable output Vital few (20%)? Other business example?

DATA, INFORMATION , AND KNOWLEDGE

Information Knowledge Data Valuable information from the human mind; includes reflection, synthesis, context Data endowed with relevance and purpose Simple observation of states of the world Easily captured Requires unit of analysis Easily structured Needs consensus on meaning Hard to capture electronically Hard to structure Easily transferred Human mediation necessary Often tacit Compact, quantifiable Often garbled in transmission Hard to transfer Highly personal to the source The relationships between data, information, and knowledge. Data Information Knowledge Data More human contribution Greater value

Wisdom Information Knowledge Intelligence Value Chain Data of the Enterprise Data “Knowledge is information that changes something or somebody – either by becoming grounds for actions, or by making an individual (or an institution) capable of different or more effective action” - Pete Drucker. Wisdom refers to our effective use of intelligence (or knowledge), intelligence refers to our effective use of knowledge. An organization learns what it knows by cultivating its knowledge ecosystem in which information, insights, and inspirations cross-fertilize and feed one another, free from the constraints of geography and schedule.

100 Years ago... • Industrial Revolution changed the World • Information Revolution! Today...

Steam Engine Computer Industry Evolution (mid 1770s) Rail Road (1829, change concept of distance) Impact on: Economy, Politics, Social change Internet (1990, ??? Distance) Information Evolution (late 1990s) N

More Information ? • More information is not profitable unless it is relevant information. • Executives will need information in the future if their companies are to be competitive. better

Information … BAD information is WORSE than ... NO information.

Chapter 1 The Importance of MIS

Chapter 1 The Importance of MIS

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