Management Information Systems Ch 4 5 6
Businesses invest in I Tto achieve six important business objectives
1. Operational excellence 2. New products, services, and business models 3. Customer and supplier intimacy 4. Improved decision making 5. Competitive advantage 6. Survival
Information technology
the hardware and software a business uses to achieve objectives
Information
data shaped into meaningful, useful form
Management information systems (M I S)
- Focuses on broader information systems literacy - Issues surrounding development, use, impact of information systems used by managers and employees - Focuses on firm performance, productivity, and competitive challenges
Technology
- IT Infrastructure: Foundation or platform that information systems are built on ▪ Computer hardware ▪ Computer software ▪ Data management technology ▪ Networking and telecommunications technology - Internet and web, extranets, intranets - Voice, video communications
People
- Information systems require skilled people to build, maintain, and use them. - Employee attitudes affect their ability to use systems productively. - Role of managers: ▪ Perceive business challenges ▪ Set organizational strategy ▪ Allocate human and financial resources ▪ Creative work: new products, services
Activities in an information system that produce information
- Input - Processing - Output - Feedback
Organizations
Coordinate work through structured hierarchy and business processes - Business processes: related tasks and behaviors for accomplishing work ▪ Examples: fulfilling an order, hiring an employee ▪ May be informal or include formal rules - Culture embedded in information systems ▪ Example: U P S ' sconcern with placing service to customer first
Information system
interrelated components that manage information to: - Support decision making and control - Help with analysis, visualization, and product creation
Data
streams of raw facts
Survival
• Businesses may need to invest in information systems out of necessity; it is simply the cost of doing business. • Keeping up with competitors - Citibank's introduction of A T M s • Federal and state regulations and reporting requirements - Toxic Substances Control Act and the Sarbanes-Oxley Act
Customer and Supplier Intimacy
• Customers who are served well become repeat customers who purchase more. - Mandarin Oriental Hotel ▪ Uses IT to foster an intimate relationship with its customers, keeping track of preferences, and so on • Close relationships with suppliers result in lower costs. - JCPenney ▪ IT to enhance relationship with supplier in Hong Kong
Improved Decision Making
• If managers rely on forecasts, best guesses, and luck, they will misallocate employees, services, and inventory. • Real-time data improves ability of managers to make decisions. • Verizon: web-based digital dashboard to update managers with real-time data on customer complaints, network performance, and line outages
operational excellence
• Improved efficiency results in higher profits. • Information systems and technologies help improve efficiency and productivity. • Example: Walmart - Power of combining information systems and best business practices to achieve operational efficiency—and over $514 billion in sales in 2019 - Most efficient retail store in world as result of digital links between suppliers and stores
New Products, Services, and Business Models
• Information systems and technologies enable firms to create new products, services, and business models. • Business model: how a company produces, delivers, and sells its products and services • Example: Apple - Transformed old model of music distribution with iTunes - Constant innovations—iPod, iPhone, iPad, etc.
Competitive Advantage
• Often results from achieving previous business objectives • Advantages over competitors: - Charging less for superior products, better performance, and better response to suppliers and customers - Examples: Apple, Walmart, and U P S are industry leaders because they know how to use information systems for this purpose