MIS

CHAPTER 1

INFORMATION SYSTEMS:
AN OVERVIEW
Gordon Kanoyangwa

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 Chapter 1 Information Systems: An Overview

learning outcomes
LO1 Discuss common applications of computers and
information systems.
LO2 Explain the differences between computer literacy
and information literacy.
LO3 Define transaction processing systems.
LO4 Define management information systems.
LO5 Describe the four major components of an
information system.
LO6 Discuss the differences between data and
information.

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l e a r n i n g o u t c o m e s (cont’d.)
LO7 Explain the importance and applications of
information systems in functional areas of a business.
LO8 Discuss how information technologies are used to
gain a competitive advantage.
LO9 Explain the Five Forces Model and strategies for
gaining a competitive advantage.
L1O Review the IT job market.
L11 Summarize the future outlook of information
systems.

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 Chapter 1 Information Systems: An Overview

Computers and Information Systems in Daily Life

• Computers and information systems are all
around you
– Online classes
– Grading
– Grocery and retail
– PDA and smartphones
– Internet
• “Information systems” versus “information
technology”: Used interchangeably

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 Chapter 1 Information Systems: An Overview

Computer Literacy and Information Literacy

• Computer literacy
– Having skills in using productivity software ,eg word
processors, spreadsheets, DBMS etc, as well as having basic
knowledge of hardware and software,
• Information literacy
– Understanding the role of information in generating and
using business intelligence
• Business intelligence (BI)
– Provides historical, current, and predictive views of business
operations and environments
– Gives organizations a competitive advantage in the
marketplace
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 Chapter 1 Information Systems: An Overview

The Beginning: Transaction Processing Systems

• Transaction processing systems (TPSs)
-have been applied to structured tasks such
as record keeping, clerical operations and
inventory control.
– Focus on data collection and processing,
– Cost reduction
– Operations repetitive
– Human involvement minimal
– Eg payroll system

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 Chapter 1 Information Systems: An Overview

Management Information Systems

• Management information system (MIS)
– Organized integration of hardware and software technologies,
data, processes, and human elements
– Designed to produce timely, integrated, relevant, accurate, and
useful information
• For decision-making purposes
• Include:
– Hardware components thus input, output and memory devices.
– MIS software include commercial programs and in-house
developed programs.
– Processes –methods for performing tasks

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 Chapter 1 Information Systems: An Overview

Management Information Systems (cont’d.)

• Designing an MIS
– Define objectives
– Collect and analyze data
– Provide information in useful format for decision
making purposes.
• Used in both the private and public sectors
• Many organizations use information systems to
gain a competitive advantage

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 Chapter 1 Information Systems: An Overview

Major Components of an Information System

• Data
• Database
• Process
• Information

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Exhibit 1.3 Major components of an information system

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 Chapter 1 Information Systems: An Overview

Data

-Input to the system –raw facts , difficult to use for decision

making.
• Sources of data
–External eg of this data sources :customers, competitors,
suppliers, government agencies, financial institutions
–Internal eg of this data sources : sales records, personnel
records,
• Data has a time orientation – post data for performance report and
current data for operational report.
• Can be collected in different forms
–Aggregated eg subtotals for categories of information
–Disaggregated eg itemized lists

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 Chapter 1 Information Systems: An Overview

Database
• Database
– Heart of an information system
– Collection of all relevant data organized in a series of
integrated files
• Essential for the success of any information
system
• Managed with database management system
(DBMS): e.g., Oracle, MS Access,
• Reduces personnel time needed to gather,
process, and interpret data manually
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 Chapter 1 Information Systems: An Overview

Process
• Process
– Generates the most useful type of information for
decision making
• Generally includes transaction-processing reports
and models for decision analysis
• Includes a wide range of models to support all
levels of decision making

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 Chapter 1 Information Systems: An Overview

Information
• Information
– Output of an information system
– Facts that have been analyzed by the process
component and are useful to the MIS User.
• Quality of information
– Timeliness
– Integration with other data and information
– Consistency and accuracy
– Relevance

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 Chapter 1 Information Systems: An Overview

Information (cont’d.)
Another factor affecting Usefulness of information
•User interface
– Must be flexible and easy to use
– Graphical user interfaces (GUIs) should produce
information different formats, graphics, tables,
exception reports.
•Ultimate goal of an information system
– Generate business intelligence (BI)

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 Chapter 1 Information Systems: An Overview

Examples of Information Systems

• Example 1: A university’s DBMS
– State university stores all student data in a database
– Built-in query capability
– Other types of analysis can be done
• Example 2: Teletech
– International textile company
– Database stores data on products, suppliers, sales personnel,
costs
– Process components conduct analysis
– Forecasting models can be used to generate predictions

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 Chapter 1 Information Systems: An Overview

Using Information Systems and Information

Technologies
• Information systems- designed to collect data, process the data,
and deliver timely, relevant and useful information for decisions
making.
• Information technologies
– Achieve goals of information systems
• Examples
– Internet
– Databases
– POS Systems
– RFID tags

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Information Technologies at The Home Depot

• POS system
– Fast customer service
– Improved inventory management
• Wireless network
– Efficient in-store communication
• Web site
– Communicate with customers
– Increase sales with online orders
• RFID tags
– Better manage inventory
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The Importance of Information Systems

• Information
– Second most important resource in any organization
after human element.
• Four Ms of resources:
– Manpower
– Machinery
– Materials
– Money

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The Importance of Information Systems (cont’d.)

• Personnel information system (PIS) or human
resource information system (HRIS)
– Designed to provide information that helps decision
makers in personnel carry out their tasks more
effectively
– Use Web technologies
• Main difference between an intranet and the
Internet
– Intranets are private / Internet is public

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 Chapter 1 Information Systems: An Overview

The Importance of Information Systems (cont’d.)

• Logistics information system (LIS)
– Designed to reduce the cost of transporting materials
– Maintains safe and reliable delivery
• Manufacturing information system (MFIS)
– Manages manufacturing resources
– Companies can reduce manufacturing costs, increase
product quality, and improve inventory decisions

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 Chapter 1 Information Systems: An Overview

Information Technologies at UPS

• UPS Delivery Intercept
– Web-based service that allows customers to intercept
and reroute packages before they are delivered
Uses Package Flow Technology system to map
efficient routes for routes for drivers and mark
packages for special handling.

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 Chapter 1 Information Systems: An Overview

The Importance of Information Systems (cont’d.)

• Financial information system (FIS)
– Provides information to financial executives in a
timely manner
• Marketing information system (MKIS)
– Improve marketing decisions
– Provide timely, accurate, and integrated information
about the marketing mix

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Using Information Technologies for a Competitive

Advantage
• Michael Porter
– Professor at Harvard Business School
– Identified three strategies for competing in the
marketplace successfully
• Overall cost leadership
• Differentiation
• Focus

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 Chapter 1 Information Systems: An Overview

Using Information Technologies for a Competitive

Advantage (cont’d.)
• Information systems
– Help organizations reduce the cost of products and services
– Assist with differentiation and focus strategies
– Can help bottom-line(focuses on improving efficiency by reducing
overall costs) and top-line strategies (focuses on generating new
revenue by offering new products or services or by selling to new
customers)
• Enterprise systems
– Supply chain management (SCM)
– Customer relationship management (CRM)
– Enterprise resource planning (ERP)
– Knowledge management (KM)
– Collaboration software

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Information Technologies at Walmart

• Walmart Satellite Network
– Largest private satellite communication system in the
United States
– Links branch stores with the home office in
Bentonville, Arkansas
• POS systems
• RetailLink
• Electronic data interchange
• RFID technologies

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Using Information Technologies for a Competitive

Advantage (cont'd.)
• Differentiation strategies
– Make products and services different from
competitors
– Examples: Apple, Amazon.com differentiated its
website

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 Chapter 1 Information Systems: An Overview

Using Information Technologies for a Competitive

Advantage (cont'd.)
• Focus strategies
– Concentrate on a specific market segment
– Attempt to achieve a cost or differentiation advantage
– Examples: Apple, Abercrombie & Fitch, Nordstrom

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 Chapter 1 Information Systems: An Overview

Porter’s Five Forces Model: Understanding the

Business Environment
• Five Forces Model
– Michael Porter
– For analyzing an organization, its position in the
marketplace, and how information systems could be
used to make it more competitive
– Buyer power
– Supplier power
– Threat of substitute products or services
– Threat of new entrants
– Rivalry among existing competitors
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Exhibit 1.4 The Five Forces Model

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 Chapter 1 Information Systems: An Overview

Porter’s Five Forces Model: Understanding the

Business Environment (cont'd.)
• Buyer power
– High when customers have many choices
– Low when they have few choices
– Limit buyers’ choices by offering services that make it
difficult for customers to switch
• Supplier power
– High when customers have fewer options
– Low when customers have more options
– Use information systems to make their products and
services cheaper
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Porter’s Five Forces Model: Understanding the

Business Environment (cont'd.)
• Threat of substitute products or services
– High when many alternatives for an organization’s
products or services available
– Add services to make organization more distinct
– Add fees to discourage customers from switching
• Threat of new entrants
– Low when duplicating a company’s product or service is
difficult
– Use focus strategies to ensure that this threat remains
low
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Porter’s Five Forces Model: Understanding the

Business Environment (cont'd.)
• Rivalry among existing competitors
– High when many competitors occupy the same
marketplace position
– Low when there are few competitors

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The IT Job Market

• One of the fastest growing segments in the
economy
• Categories
– Operations and help desk
– Programming
– Systems design
– Web design and Web hosting
– Network design and maintenance
– Database design and maintenance
– Robotics and artificial intelligence
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CTO/CIO
• Top information systems job belongs to the chief
technology officer (CTO) / chief information
officer (CIO)
– Oversees long-range planning
– Keeps an eye on new developments that can affect a
company’s success
• Also chief privacy officer (CPO)
– Responsibility for managing risks and business
impacts of privacy laws and policies

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Manager of Information Systems Services

• Responsible for managing:
– Hardware
– Software
– Personnel within the information systems department

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Systems Analyst
• Responsible for:
– Design and implementation of information systems
• Requires:
– Computer knowledge
– Information systems background
– Thorough understanding of business systems and
functional areas within a business organization

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Outlook for the Future

• Hardware and software costs continue to decline
– Processing information less expensive in the future
• Artificial intelligence and related technologies will
continue to improve and expand
• Computer literacy will improve
• Networking technology will improve
• Personal computers will continue to improve in
power and quality

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Outlook for the Future (cont'd.)

• Internet growth will continue
• Computer criminals will become more
sophisticated
– Protecting personal identity information will become
more difficult

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Outlook for the Future (cont'd.)

Major computing trends that are already underway
-Ubiquitous computing: computing devices everywhere with different
sizes ,power, accessed thru multiple formats eg voice ,touch, and gesture.
-The internet of things
-3D printing
-Pervasive analytics
-Content aware computing
-smart machines and devices
-cloud computing
-software defined applications and infrastructures
-security.

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Summary
• Examples of uses for computers and information
systems
• Difference between computer literacy and
information literacy
• Management information system (MIS)
– Data, database, process, and information
• Porter
– Three competitive strategies
– Five Forces Model

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