MANAGEMENT INFORMATION SYSTEM

COURSE DESCRIPTION:
This subject explores current Information Systems
concepts and technologies. Students learn how information
systems give a business or organization a competitive edge
by providing technologies that help managers plan, control,
and make decisions. Includes topics such as hardware and
software components of an information system, e-business
concepts and implementation, and a survey of common
information systems used today.

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 MIS
CHAPTER 1

INFORMATION SYSTEMS:
AN OVERVIEW
Hossein BIDGOLI

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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 and
management information systems.
LO4 Describe the four major components of an
information system.
LO5 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.)
LO6 Explain the importance and applications of
information systems in functional areas of a
business.
LO7 Discuss how information technologies are used to
gain a competitive advantage.
LO8 Explain the Five Forces Model and strategies for
gaining a competitive advantage.
LO9 Summarize the future outlook of information
systems.

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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
– MIS software
– Processes

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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
• Used in both the private and public sect
• 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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Data
• Data
– Input to the system
• Sources of data
– External
– Internal
• Time orientation
• Can be collected in different forms
– Aggregated
– Disaggregated

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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
• Reduces personnel time needed to gather,
process, and interpret data manually
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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
• Quality of information
– Timeliness
– Integration with other data and information
– Consistency and accuracy
– Relevance

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Information (cont’d.)
• User interface
– Must be flexible and easy to use
– Graphical user interfaces (GUIs)
• Ultimate goal of an information system
– Generate business intelligence (BI)

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Using Information Systems and Information

Technologies
• Information technologies
– Achieve goals of information systems
• Examples
– Internet
– Databases
– POS Systems
– RFID tags

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 Chapter 1 Information Systems: An Overview

The Importance of Information Systems

• Information
– Second most important resource in any organization
• 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 and the Internet is public

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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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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 and top-line strategies
• Enterprise systems
– Supply chain management (SCM)
– Customer relationship management (CRM)
– Enterprise resource planning (ERP)
– Collaboration software
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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

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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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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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 Chapter 1 Information Systems: An Overview

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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Future Outlooks
• 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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Future Outlooks (cont'd.)

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

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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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