Kroenke Umis10e Inppt 01

Using MIS
10th Edition
Chapter 1
The Importance of MIS
Copyright © 2018 Pearson Education Ltd. 1-1

“But Today, They’re Not Enough.”
• Jennifer Lacks Skills Falcon Security Needs:

1. Abstract reasoning skills.
2. Systems Thinking Skills.
3. Collaboration Skills.
4. Experimentation Skills.

What Do Employers Want?
• Self starter, Don’t wait to be told what to do.

• Team worker
– Develops ideas with others.
– Asks questions.
– Pulls more than their own weight.

Study Questions
Q1-1 Why is Introduction to MIS the most important class in
the business school?
Q1-2 How will MIS affect me?
Q1-3 What is MIS?
Q1-4 How can you use the five-component model?
Q1-5 What is information?
Q1-6 What are necessary data characteristics?
Q1-7 2027?

The Digital Revolution
Q1-1 Why is Introduction to MIS the most important class in the business school?
• Technology fundamentally changing business.

• Information Age
– Production, distribution, control of information
primary economic drivers.
• Digital Revolution
– From mechanical/analog devices to digital devices.

Understanding the Forces Pushing the
Evolution of New Digital Devices
• Bell’s Law
– New class of computers establishes a new industry
each decade.
 New platforms, programming environments,
industries, networks, and information systems.
• Understand how next digital evolution will affect
businesses.
• What an industry does and how it does it will
change.

Computer Price/Performance Ratio
Historical Trend
Figure 1-1 Computer Price / Performance Ratio Decreases

Metcalfe’s Law
• Network value equal

to square of number
of users connected
to it. (V=U2)
– Google, Amazon,
eBay exist due to
large numbers of
Internet users.
Figure 1-2 Increasing Value of Networks

Fundamental Forces Changing Technology
Law Meaning Implications
Computers are getting exponentially

The number of transistors per
faster.
Moore’s Law square inch on an integrated chip
The cost of data processing is
doubles every 18 months.
approaching zero.
More digital devices are being connected

The value of a network is equal to
together.
Metcalfe’s Law the square of the number of users
The value of digital and social networks is
connected to it.
increasing exponentially.
Network connection speeds for Network speed is increasing. Higher

Nielsen’s Law high-end users will increase by 50 speeds enable new products, platforms,
percent per year. and companies.
Storage capacity is increasing

The storage density on magnetic
exponentially.
Kryder’s Law disks is increasing at an
The cost of storing data is approaching
exponential rate.
zero.

Price of Storage Capacity per GB
Figure 1-4 Price of Storage Capacity per GB

This Is the Most Important Class in the
School of Business Because You Will Learn:
• How technology fundamentally changes

businesses.
• Why executives try to find ways to use new
technology to create a sustainable competitive
advantage.
• Assess, evaluate, apply emerging information
technology to business.
• Help you attain knowledge needed by future
business professionals.

Technological Change is Accelerating
• Bell’s Law
– Today’s highly successful business could be
bankrupt quickly because technology changed and
it didn’t.
• Example: Blockbuster
– In 2004 Blockbuster had $5.9B in revenues
– In 2010 Blockbuster filed for bankruptcy
– High-speed network connections and streaming
video changed the competitive landscape

How Can I Attain Job Security?
• Moore’s Law, Metcalfe’s Law, and Kryder’s Law

– Driving data processing, storage, communications
costs to essentially zero.
• Any routine skill can, and will, be outsourced to
lowest bidder.

What Skills Will Be Marketable During
Your Career?
• Rapid technological change and increased

international competition:
– Requires skills and ability to adapt.
– Favors people with strong non-routine cognitive
skills.
– Message: Develop strong non-routine cognitive
skills.

What Is a Marketable Skill?
Jennifer's Problem at Falcon

Skill Example
Security
Hesitancy and uncertainty when

Abstract Reasoning Construct a model or representation. conceptualizing a method for
identifying 3D printable drone parts.
Model system components and

Inability to model Falcon Security’s
Systems Thinking show how components’ inputs and
operational needs.
outputs relate to one another.
Develop ideas and plans with

Unwilling to work with others on work-
Collaboration others. Provide and receive critical
in-progress.
feedback.
Create and test promising new

Fear of failure prohibited discussion of
Ability to Experiment alternatives, consistent with
new ideas.
available resources.
Figure 1-5 Examples of Critical Skills for Nonroutine Cognition

How Can Intro to MIS Help You Learn
Non-Routine Skills?
• Abstract Reason
– Ability to make and manipulate models.
– Learn to use and construct abstract models.
– Ch. 1: Five components of an IS model.
– Ch. 5: How to create data models.
– Ch. 10: How to make process models.

Non-Routine Skills? (cont’d)
• Systems Thinking
– Ability to model system components, connect inputs
and outputs among components to reflect structure
and dynamics.
– Ability to discuss, illustrate, critique systems;
compare alternative systems; apply different
systems to different situations.

• Collaboration
– People working together to achieve a common goal,
result, or work product.
– Ch. 2 discusses collaboration skills and illustrates
several collaboration information systems.

• Ability to Experiment
– Make reasoned analysis of an opportunity; develop
and evaluate possible solutions.
 “I’ve never done this before.”
 “I don’t know how to do it.”
 “But will it work?”
 “Is it too weird for the market?”
• Fear of failure paralyzes many good people
and ideas

Jobs
• 69% of college graduates need additional training

or education.
• 46% working in jobs not requiring their degree,
underemployed.
• Better success for students with courses related to
information systems.
• Tradable job
– Job not dependent on particular location, can be
offshore outsourced.

Job Growth By Sector Over the Past Twenty
Years
Figure 1-6 Growth of Jobs by Sector from 1989 to 2009

BLS Occupational Outlook 2014-2024
2012 Median Pay 2014 Median Pay Job Growth (%) 2014-24 Job Growth (N) 2014-24
Business Managers
Marketing Managers $ 115,750 $ 123,450 9% 19,700
Information Systems Managers $ 120,950 $ 127,640 15% 53,700
Financial Managers $ 109,740 $ 115,320 7% 37,700
Human Resources Managers $ 99,720 $ 102,780 9% 10,800
Sales Managers $ 105,260 $ 110,660 5% 19,000
Computer and Information Technology
Computer Network Architects $ 91,000 $ 98,430 9% 12,700
Computer Systems Analysts $ 79,680 $ 82,710 21% 118,600
Database Administrators $ 118,700 $ 80,280 11% 13,400
Information Security Analysts $ 87,170 $ 88,890 18% 14,800
Network and Systems Admin. $ 72,560 $ 75,790 8% 30,200
Software Developers $ 93,350 $ 97,990 17% 186,600
Web Developers $ 62,500 $ 63,490 27% 39,500
Business Occupations
Accountants and Auditors $ 63,550 $ 65,940 11% 142,400
Financial Analysts $ 76,950 $ 78,620 12% 32,300
Management Analysts $ 78,600 $ 80,880 14% 103,400
Market Research Analysts $ 60,300 $ 61,290 19% 92,300
Logisticians $ 72,780 $ 73,870 2% 2,500
Human Resources Specialists $ 55,640 $ 57,420 5% 22,000
Figure 1-7 Bureau of Labor Statistics Occupational Outlook 2014–2024

Bottom Line of MIS Course
Most important course in business school because:

1. Gives background needed to assess, evaluate,
and apply emerging information systems
technology to business.
2. Gives marketable skills by helping you learn
abstraction, systems thinking, collaboration, and
experimentation.
3. Makes you aware of well-paying, high demand
MIS-related jobs.

Management Information Systems
Q1-3 What is MIS?
• Key elements
1. Management and use
2. Information systems
3. Strategies
•Goal of MIS:
 Managing IS to achieve business strategies.

Management Information Systems (cont’d)
Q1-3 What is MIS?
• Management and use to:

– Develop, maintain, adapt by:
 Creating an information system that meets your
needs, take an active role in system’s development.
Why?
 Business professionals using cognitive skills to
understand business needs and requirements.

Components of an Information System?
Q1-3 What is MIS?
Figure 1-8 Five Components of an Information System

Difference Between IT and IS
Q1-3 What is MIS?
• Information technology (IT)

IT People
1. Products
2. Methods IS
3. Inventions
4. Standards
Procedures
– IT drives development of new IS.
– IT components = Hardware +
Software + Data
– IS = IT + Procedures + People

Development and Use of Information
Systems
Q1-3 What is MIS?
• Business professionals need to:

– Take active role to ensure systems meet their
needs.
– Understand how IS constructed.
– Consider users’ needs during development.
– Learn how to use IS.
– Remember ancillary requirements (security,
backups).

Achieving Strategies
Q1-3 What is MIS?
• Information systems exist to help people achieve

business strategies.
– “What is the purpose of our Facebook page?”
– “What is it going to do for us?”
– “What is our policy for employees’ contributions?”
– “What should we do about critical customer
reviews?”
– “Are the costs of maintaining the page sufficiently
offset by the benefits?”

The Five-Component Model

Characteristics of the Five Components
• Most Important Component – YOU!

– Your cognitive skills determine quality of your
thinking, ability to conceive information from data.
– You add value to information and information
systems.
• Only humans produce information.
• All components must work together.

Why Is the Difference Between IT and IS
Important to You?
• Avoid common mistake: Cannot buy an IS.

– Can buy, rent, lease hardware, software, and
databases, and predesigned procedures.
• People execute procedures to employ new IT.
• New systems require training, overcoming
employee resistance, and managing employees as
they use new system.

Why Is the Difference Between IT and IS
Important to You? (cont’d)
• High-tech vs. low-tech information systems.

– Consider amount of work being moved from people
to computers.
• Understanding scope of new information systems.
– Assess how big an investment new technology
represents.
• Components ordered by difficulty and disruption.

A is for Alphabet
So What?
• The Internet has enabled innovation and changed

our lives.
• Google is one of the largest publicly traded
companies in the world with a diverse portfolio of
projects.
• As of August 10, 2015, it was a subsidiary of an
overarching company named Alphabet Inc.
• Page and Brin manage the overall strategy, but not
daily operations of each company.

A is for Alphabet (cont’d)
So What?
• The company was restructured to:

– Retain top talent in a highly competitive industry.
– Decrease bureaucratic climate.
– Improve internal career trajectories of industry
superstars.
– Make individual companies more nimble, efficient,
and autonomous.

Defining Information
Definitions vary:
1. Knowledge derived from data.
2. Meaningful context.
3. Processed data, or data processed by
summing, ordering, averaging, grouping,
comparing, or similar operations.
4. “A difference that makes a difference.”

Amazon.com Stock Price and Net Income
Figure 1-9 Amazon.com Stock Price and Net Income

Where Is Information?
• Graph is not information.

– It’s data people perceive and use to conceive
information.
• Ability to conceive information determined by
cognitive skills.
• People perceive different information from same
data.
• You add value by conceiving information from
data.

Characteristics of Data
• Accurate
• Timely
• Relevant
–To context
–To subject
• Just sufficient
• Worth its cost

Ethics and Professional Responsibility
Ethics Guide
Figure 1-3 Measuring growth of units sold using different axis values

(cont’d)
Ethics Guide
Immanuel Kant
• Categorical imperative
– One should behave only in a way that one would
want the behavior to be a universal law.
 Are you willing to publish your behavior to the world?

(cont’d)
Ethics Guide
• Necessity to act in accordance with categorical

imperative.
– Perfect duty - behavior that must always be met.
– Imperfect duty - a praiseworthy action, but not
required.
 Giving to charity, developing your business skills and
abilities.

Imperfect Duty of Business Professionals
Ethics Guide: Ethics and Professional Responsibility
• Imperfect duties
– Cultivating your talent is a professional
responsibility.
– Obtaining skills necessary to accomplish your job.
– Continuing to develop business skills and abilities
throughout your career.

MIS in 2027
Q1-7 2027?
• Most computers won’t look like computers.

• Smartphones
– 1Gbps network connection,
– 1 Exabyte storage,
– Teraflop+ processing power,
– Connect to any electrical device,
– Store/stream every song and movie ever made to
any device,
– Battery life over a month on a single charge.

Technology in 2027 (cont’d)
Q1-7 2027?
• BYOD common.
• Comprehensive bio-monitoring devices at home,
linked to health care systems.
• Widespread use of Google Glass or Microsoft’s
HoloLens.
• More people work at home or wherever.
• Knowledge and use of business information
systems will be more important, not less.

Passwords and Password Etiquette
Security Guide
• 10+ characters.
• Does not contain your user name, real name, or
company name.
• Does not contain a complete dictionary word in
any language.
• Different from previous passwords used.
• Contains both upper- and lowercase letters,
numbers, and special characters (such as ˜ ! @; #
$ % ^; &; * ( ) _ +; – =; { } | [ ] \ : “ ; ’ <; >;? , . /)

Passwords and Password Etiquette (cont’d)
Security Guide
• Never write down your password.

• Never ask someone for their password.
• Never give your password to someone.
• “do-si-do” move—move away so another person
can enter password privately.
– Common professional practice.

Five-Component Careers
Career Guide
Hardware Software Data Procedures People

Vendors Vendors Vendors Vendors Recruiters
Sales &
(IBM, Cisco, (Microsoft, (Acxiom, (SAP, Infor, (Robert Half,
Marketing
etc.) Oracle, etc.) Google, etc.) Oracle) Lucas Group)
Vendors and
Database Customer
Vendors Vendors internal
Support administration support
Internal MIS Internal MIS customer
Security Training
support
Business
Application
Computer Data modeler process Training
programmer
Development engineering Database management Internal MIS
Quality test
Internal MIS design Process recruiting
Engineer
reengineering
Data Project Technical
Management Internal MIS Internal MIS
administration management management
Consulting Project management, development, pre- and postsale support

Active Review
Q1-1 Why is Introduction to MIS the most important

class in the business school?
Q1-3 What is MIS?
Q1-7 2027?

zulily
Case Study 1
• What is the business model?

– Flash sales to mothers:
 Children’s clothes, toys, women’s clothes,
accessories, and décor items.
– IT provides entertaining shopping experience, name
brand goods, unique and difficult-to-find off-brands,
at substantial discounts.
– 45% of sales over mobile devices.
– Curated sales.

zulily (cont’d)
Case Study 1
Figure 1-11 zulily Merchandise Variety

Courtesy of zulily Inc. Used by permission

zulily (cont’d)
Case Study 1
2010 2011 2012 2013 2014
Number of active customers

157 791 1580 3,200 4,900
(thousands)
Revenue (millions) $18 $143 $331 $696 $1,200
Sales per active customer $117 $180 $210 $218 $245
Figure 1-13 zulily Performance

Courtesy of zulily Inc. Used by permission

zulily (cont’d)
Case Study 1
• How did they do it?

– Buyers identify goods to be sold, negotiate with
vendors.
– Photographs sample items in-house, write ad copy.
– Group items for 3-day sales events.
– After event closes, zulily orders items from vendor,
receives, packages, and ships to customers
(maintains no inventory).
– Vulnerable to vendor’s errors and mistakes.

zulily (cont’d)
Case Study 1
• Use of Technology at zulily

– “Continual innovation through investment in
technology is core to our business.”
– Internet, mobile technology compatibility.
– Developed a proprietary technology platform to
handle. Enormous spikes in web processing
demand.
– Extensive data collection and analytics capabilities.

zulily (cont’d)
Case Study 1
• Growth-management problems
– Must effectively integrate, develop and motivate a
large number of new employees, while maintaining
corporate culture. Continue to make substantial
investments to expand merchandising and
technology personnel.
– Need to hire mid-level managers.
– Finding and retaining merchandising and
technology personnel difficult.

zulily (cont’d)
Case Study 1
• Lessons Learned
– Technology zulily uses not ground breaking.
– Developed innovative application of information
systems technology.
– Applied it to a business opportunity.
– Managerial skill to develop that idea.


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Using MIS

Copyright © 2018 Pearson Education Ltd. 1-1

• Jennifer Lacks Skills Falcon Security Needs:

Copyright © 2018 Pearson Education Ltd. 1-2

• Self starter, Don’t wait to be told what to do.

Copyright © 2018 Pearson Education Ltd. 1-3

Copyright © 2018 Pearson Education Ltd. 1-4

• Technology fundamentally changing business.

Copyright © 2018 Pearson Education Ltd. 1-5

Copyright © 2018 Pearson Education Ltd. 1-6

Figure 1-1 Computer Price / Performance Ratio Decreases

Copyright © 2018 Pearson Education Ltd. 1-7

• Network value equal

Figure 1-2 Increasing Value of Networks

Copyright © 2018 Pearson Education Ltd. 1-8

Law Meaning Implications

Computers are getting exponentially

More digital devices are being connected

Network connection speeds for Network speed is increasing. Higher

Storage capacity is increasing

Copyright © 2018 Pearson Education Ltd. 1-9

Figure 1-4 Price of Storage Capacity per GB

Copyright © 2018 Pearson Education Ltd. 1-10

• How technology fundamentally changes

Copyright © 2018 Pearson Education Ltd. 1-11

Copyright © 2018 Pearson Education Ltd. 1-12

• Moore’s Law, Metcalfe’s Law, and Kryder’s Law

Copyright © 2018 Pearson Education Ltd. 1-13

• Rapid technological change and increased

Copyright © 2018 Pearson Education Ltd. 1-14

Jennifer's Problem at Falcon

Hesitancy and uncertainty when

Model system components and

Develop ideas and plans with

Create and test promising new

Figure 1-5 Examples of Critical Skills for Nonroutine Cognition

Copyright © 2018 Pearson Education Ltd. 1-15

Copyright © 2018 Pearson Education Ltd. 1-16

Copyright © 2018 Pearson Education Ltd. 1-17

Copyright © 2018 Pearson Education Ltd. 1-18

Copyright © 2018 Pearson Education Ltd. 1-19

• 69% of college graduates need additional training

Copyright © 2018 Pearson Education Ltd. 1-20

Figure 1-6 Growth of Jobs by Sector from 1989 to 2009

Copyright © 2018 Pearson Education Ltd. 1-21

Copyright © 2018 Pearson Education Ltd. 1-22

Most important course in business school because:

Copyright © 2018 Pearson Education Ltd. 1-23

Copyright © 2018 Pearson Education Ltd. 1-24

• Management and use to:

Copyright © 2018 Pearson Education Ltd. 1-25

Figure 1-8 Five Components of an Information System

Copyright © 2018 Pearson Education Ltd. 1-26

• Information technology (IT)

Copyright © 2018 Pearson Education Ltd. 1-27

• Business professionals need to:

Copyright © 2018 Pearson Education Ltd. 1-28

• Information systems exist to help people achieve

Copyright © 2018 Pearson Education Ltd. 1-29

Q1-4 How can you use the five-component model?

Copyright © 2018 Pearson Education Ltd. 1-30

• Most Important Component – YOU!

Copyright © 2018 Pearson Education Ltd. 1-31