MIS Ch.1-5 Laudon 14e

Complementary assets:

- Assets required to derive value from a primary investment - Firms supporting technology investments with investment in complementary assets receive superior returns Example: Invest in technology and the people to make it work properly

Client / Server Era

- Client = Desktop or Laptop - Connected via Network - Computer processing split between machines - Server = Physical computer and software applications Microsoft Windows owns the client / server market - Windows Server (2012, 2008, 2003) - Active Directory - Windows 8 - Windows 7 - Windows Vista

Information Privacy Policy

- Contains general principles regarding information privacy

How information systems are transforming business

- Emerging mobile digital platform - Growing business use of "Big Data" - Growth in cloud computing

Globalization Opportunities

- Internet has drastically reduced costs of operating on a global scale - Increases in foreign trade, outsourcing - Presents both challenges and opportunities

Feedback

- Output is returned to appropriate members of organization to help evaluate or correct input stage.

Minicomputers

- Powerful Servers

In the emerging, fully digital firm

- Significant business relationships are digitally enabled and mediated. - Core business processes are accomplished through digital networks. - Key corporate assets are managed digitally.

In the emerging, fully digital firm:

- Significant business relationships are digitally enabled and mediated. - Core business processes are accomplished through digital networks. - Key corporate assets are managed digitally. Digital firms offer greater flexibility in organization and management. Time shifting, space shifting

Mainframe Computers

- Timesharing - Multitasking - Thousands of connected terminals

Six strategic 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

Management Information Systems (MIS)

A business function, just like accounting and human resources, which moves information about people, products, and processes across the company to facilitate decision-making and problem-solving

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

Competitive advantage

A product or service that an organization's customers place a greater value on than similar offerings from a competitor

Business process

A standardized set of activities that accomplish a specific task

Core competencies

Activity for which firm is world-class leader Relies on knowledge, experience, and sharing this across business units

Cloud Computing

An environment of servers that house and provide access to resources users access through the Internet

New products, services, and business models

Business model: describes how company produces, delivers, and sells product or service to create wealth Examples: Apple's iPad, Google's Android OS, and Netflix

Cloud and Mobile Computing Era

Cloud Computing Mobile computing devices used to communicate and perform business functions

Enterprise Resource Planning (ERP) Systems

Collects data from different firm functions and stores data in single central data repository Enables: Coordination of daily activities Efficient response to customer orders (production, inventory) Help managers make decisions about daily operations and longer-term planning

Extranets:

Company Web sites accessible externally only to vendors and suppliers Often used to coordinate supply chain

How/why do some firms become leaders in their industry?

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

Ethical Computer Use Policy

Contains general principles to guide computer user behavior The ethical computer user policy ensures all users are informed of the rules and, by agreeing to use the system on that basis, consent to abide by the rules

Internet Use Policy

Contains general principles to guide the proper use of the Internet

Law of Mass Digital Storage

Cost of storing data is falling at a rate of 100% per year

The core drivers of the information age

Data Information BI Knowledge

INFORMATION

Data features, such as Auto filter, turn data into information

Email privacy policy

Details the extent to which email messages may be read by others

Tools for collaboration and teamwork

E-mail and instant messaging Wikis Collaboration and social business platforms Virtual meeting systems (telepresence) Google Apps/Google sites Microsoft SharePoint Enterprise social networking tools

E-Policies typically include

Ethical computer use policy Information privacy policy Acceptable use policy Email privacy policy Social media policy Workplace monitoring policy

Customer and supplier intimacy

Example: High-end hotels that use computers to track customer preferences and used to monitor and customize environment Example: Trump International Hotel

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 equipment and supplies

Enterprise Computing Era

Firms began using network standards and software tools to create enterprise-wide infrastructure TCP/IP (Transmission Control Protocol / Internet Protocol) Linkage of computer and devices Free flow of information

Business Processes

Flows of material, information, knowledge Sets of activities, steps May be tied to functional area or be cross-functional Business processes may be assets or liabilities

5 Stages in the evolution of IT infrastructures

General-Purpose Mainframe and Microcomputer Era (1959 - Present) Personal Computer Era (1981 - Present) Client / Server Era (1983 - Present) Enterprise Computing Era (1992 - Present) Cloud and Mobile Computing Era (2000 - Present)

Information ethics

Govern the ethical and moral issues arising from the development and use of information technologies, as well as the creation, collection, duplication, distribution, and processing of information itself

IT Infrastructure

Hardware Software Data Storage Technology Networks Services (Consulting, Education, Training) Shared across entire organizations or across business units in an organization to provide a foundation for: Serving Customers Working with Vendors Managing Internal Business Processes

Firewall

Hardware and/or software that guards a private network by analyzing the information leaving and entering the network

IS

Hardware, Software, Data, Processes, People the data that is stored and manipulated by hardware and software, processes that are enabled and supported by hardware and software, and the people who use hardware and software to achieve goals.

IT

Hardware/Software

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

Threat of new entrants

High when it is easy for new competitors to enter a market and low when there are significant entry barriers

Threat of substitute products or services

High when there are many alternatives to a product or service and low when there are few alternatives

Personal Computer Era

IBM PC (1981) is usually considered the beginning of the PC era. First machine widely adopted by American businesses. DOS Microsoft Windows

Organizational and behavioral impacts

IT flattens organizations Decision making is pushed to lower levels. Fewer managers are needed (IT enables faster decision making and increases span of control).

Operational Excellence

Improvement of efficiency to attain higher profitability Example: Walmart

Primary value activities

Inbound logistics - Acquires raw materials and resources, and distributes Operations - Transforms raw materials or inputs into goods and services Outbound logistics - Distributes goods and services to customers Marketing and sales - Promotes, prices, and sells products to customers Service - Provides customer support

Information technology enhances business processes by:

Increasing efficiency of existing processes Automating steps that were manual Enabling entirely new processes Change flow of information Replace sequential steps with parallel steps Eliminate delays in decision making Support new business models

KNOWLEDGE

Information & Intelligence + Skills, Experience, & Expertise

BUSINESS INTELLIGENCE

Information collected from multiple sources: Customers Suppliers Competitors Partners Industries Used to analyze patterns, trends, and relationships for strategic decision making

Organizational resistance to change

Information systems potentially change an organization's structure, culture, politics, and work. Most common reason for failure of large projects is due to organizational and political resistance to change.

3 activities of information systems produce information organizations need

Input: Captures raw data from organization or external environment Processing: Converts raw data into meaningful form Output: Transfers processed information to people or activities that use it

Intranets:

Internal company Web sites accessible only by employees

Perspectives on Information Systems

Investing in information technology does not guarantee good returns. There is considerable variation in the returns firms receive from systems investments. Factors to Consider: Adopting the right business model Investing in complementary assets (organizational and management capital)

Porter's Three Generic Strategies

Low-Cost Leadership Product Differentiation Focus on Market Niche

Individuals form the only ethical component of...

MIS Individuals copy, use, and distribute software Search organizational databases for sensitive and personal information Individuals create and spread viruses Individuals hack into computer systems to steal information Employees destroy and steal information

Supply Chain Management (SCM) Systems

Manage firm's relationships with suppliers Share information about: Orders, production, inventory levels, delivery of products and services Goal: Right amount of products to destination with least amount of time and lowest cost

Business Intelligence Systems

Management Information Systems Decision Support Systems Executive Support Systems

Examples of functional business processes

Manufacturing and production Assembling the product Sales and marketing Identifying customers Finance and accounting Creating financial statements Human resources Hiring employees

High Cost Product Diff

Neiman marcus

Complementary assets include:

Organizational assets, for example: - Appropriate business model - Efficient business processes Managerial assets, for example: - Incentives for management innovation - Teamwork and collaborative work environments Social assets, for example: - The Internet and telecommunications infrastructure - Technology standards

Social media policy

Outlines the corporate guidelines or principles governing employee online communications

Competitive intelligence tools

Porter's Competitive Forces Model Evaluate attractiveness of an industry Porter's Three Generic Strategies Choose a business focus Porter's Value Chain Analysis Execute Business Strategies

Business benefits of collaboration and teamwork

Productivity Quality Innovation Customer service Financial performance Profitability, sales, sales growth

Enterprise social networking software capabilities

Profiles Content sharing Feeds and notifications Groups and team workspaces Permissions and privacy

Customer Relationship Management (CRM) Systems:

Provide information to coordinate all of the business processes that deal with customers Sales Marketing Customer service Helps firms identify, attract, and retain most profitable customers

Moore's Law

Refers to the computer chip performance per dollar doubles every 18 months

Acceptable Use Policy (AUP)

Requires a user to agree to follow it to be provided access to corporate email, information systems, and the Internet

Management Information Systems

Serve middle management Provide reports on firm's current performance, based on data from TPS Provide answers to routine questions with predefined procedure for answering them Typically have little analytic capability

Decision Support Systems (DSS)

Serve middle management Support non-routine decision making. Example: What is the impact on production schedule if December sales doubled? May use external information as well TPS / MIS data

Transaction Processing Systems (TPS)

Serve operational managers and staff Perform and record daily routine transactions necessary to conduct business. Examples: sales order entry, payroll, shipping Serve predefined, structured goals and decision making

E-Commerce

Subset of e-business Buying and selling goods and services through Internet

Executive Support Systems (ESS)

Support senior management Address non-routine decisions. Requiring judgment, evaluation, and insight Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS Example: Digital dashboard with real-time view of firm's financial performance: working capital, accounts receivable, accounts payable, cash flow, etc.

Enterprise Applications

Systems for linking the enterprise Span functional areas Execute business processes across firm Three major applications: Enterprise Resource Planning (ERP) systems Supply Chain Management (SCM) systems Customer Relationship Management (CRM) systems

Which of the following best describes an organization?

Technical definition: Formal social structure that processes resources from environment to produce outputs A formal legal entity with internal rules and procedures, as well as a social structure Behavioral definition: A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution

Disruptive Technologies

Technology that brings about sweeping change to businesses, industries, markets

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

Ethics

The principles and standards that guide our behavior toward other people

Competitive Intelligence

The process of gathering information about the competitive environment to improve the company's ability to succeed

Privacy

The right to be left alone when you want to be, to have control over your own personal possessions, and not to be observed without your consent

DATA

The rows in an Excel spreadsheet demonstrate data - raw facts that describe the characteristics of an event or object A fundamental role of all business managers is to be able to take the data and analyze it to find information to make great business decisions

Supplier power

The suppliers' ability to influence the prices they charge for supplies

This is the most common way to identify individual users and typically contains a user ID and a password

This is also the most ineffective form of authentication

E-Business

Use of digital technology and Internet to drive major business processes

Features of organizations

Use of hierarchical structure Accountability, authority in system of impartial decision making Adherence to principle of efficiency Routines and business processes Organizational politics, culture, and environments

Social Business

Use of social networking platforms, internal and external Engage employees, customers, and suppliers

Porter's Competitive Forces Model

Used to evaluate attractiveness of an industry. Five competitive forces shape fate of firm: Buyer Power Supplier Power Threat of substitute products or services Threat of new market entrants Rivalry amongst competitors

E-Government

Using Internet technology to deliver information and services to citizens, employees, and businesses

Value chain analysis

Views a firm as a series of business processes that each add value to the product or service

Low Cost Leadership

WALMART

Synergies

When output of some units used as inputs to others, or organizations pool markets and expertise Example: Purchase of YouTube by Google

Improved decision making

Without accurate information: Managers must use forecasts, best guesses, luck Example: Verizon's Web-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, and so on

WORKPLACE MONITORING POLICY

Workplace monitoring is a concern for many employees Organizations can be held financially responsible for their employees' actions The dilemma surrounding employee monitoring in the workplace is that an organization is placing itself at risk if it fails to monitor its employees, however, some people feel that monitoring employees is unethical

Nonrepudiation

a contractual stipulation to ensure that ebusiness participants do not deny (repudiate) their online actions

Public key encryption (PKE)

an encryption system that uses two keys: a public key for everyone and a private key for the recipient

Employee monitoring

involves the use of computers, mobile devices, or cameras to observe, record, and review an employee's use of a technology, including communications such as email messages, keyboard activity (used to measure productivity), and websites visited

Nich, narrow market

payless; tiffany &co.

Encryption

scrambles information into an alternative form that requires a key or password to decrypt the information

3 levels of management

senior, middle, operational

Confidentiality

the assurance that messages and information are available only to those who are authorized to view them