1.

1
Management Information Systems Management Information Systems
MANAGING THE MANAGING THE
DIGITAL FIRM DIGITAL FIRM
1.2
Management Information Systems Management Information Systems
A set of interrelated components that collect A set of interrelated components that collect
(or retrieve), process, store, and distribute (or retrieve), process, store, and distribute
information to support decision making and information to support decision making and
control in an organization control in an organization
What Is an Information System?
WHY INFORMATION SYSTEMS?
1.3
Management Information Systems Management Information Systems
INPUT OUTPUT PROCESS
FEEDBACK
Activities in an Information System
WHY INFORMATION SYSTEMS?
1.4
Management Information Systems Management Information Systems
Functions of an Information System
WHY INFORMATION SYSTEMS?
Figure 1-3
1.5
Management Information Systems Management Information Systems
Business Processes
Information Processing Activities
Business Value
Management Activities
Supply
Chain
Management
Enterprise
Management
Customer
Management
Knowledge
Management
Data
Collection
and
Storage
Transformation
Into
Business
Systems
Dissemination
Planning Coordinating Controlling Modeling and
Decision Making
Firm
Profitability
and
Strategic
Position
Figure 1-4
WHY INFORMATION SYSTEMS?
1.6
Management Information Systems Management Information Systems
SOURCE: Liker, et al, 1987
Figure 1-7
Socio-technical Systems
CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS
1.7
Management Information Systems Management Information Systems
TOWARD THE DIGITAL FIRM
The Interdependence Between Organizations and Information Systems
Figure 1-8
1.8
Management Information Systems Management Information Systems
Figure 1-9
TOWARD THE DIGITAL FIRM
The Widening Scope of Information Systems
1.9
Management Information Systems Management Information Systems
Information Society Evolution: Periods of Change Information Society Evolution: Periods of Change
Agricultural Industrial
(Prior to 1890s)
(1890s to 1960s)
Informational
(1960s to Present)
1.10
Management Information Systems Management Information Systems
Figure 1-10
TOWARD THE DIGITAL FIRM
Flattening Organizations & Information Systems
1.11
Management Information Systems Management Information Systems
Figure 1-11
Redesigned Work Flow For Insurance Underwriting
TOWARD THE DIGITAL FIRM
1.12
Management Information Systems Management Information Systems
Information Architecture and Information Technology Infrastructure
TOWARD THE DIGITAL FIRM
Figure 1-13
1.13
Management Information Systems Management Information Systems
Executive Roles in Information Technology Executive Roles in Information Technology
CEO
Chief Executive
Officer
COO
Chief Operations
Officer
CFO
Chief Financial
Officer
CIO
Chief Information
Officer

Manages Operations

Allocates Resources

Primary Consumer of IT within the

Organization

Manages External
Stakeholder Relationships

Sets Strategic Direction

Defines High Level IT

Needs for the Future

Manages Accounting & Finance

Forecasts Needs and Secures Financial Resources

Allocates Budget for IT Expenditures

1.14
Management Information Systems Management Information Systems
Executive Roles in Information Technology Executive Roles in Information Technology
CEO
Chief Executive
Officer
COO
Chief Operations
Officer
CFO
Chief Financial
Officer
CIO
Chief Information
Officer

Manages IT Organization and Operations

Forecasts IT Needs from Business Strategy

Sets Direction for IT Architecture and Organization

Plans, Designs and Delivers IT throughout the firm

1.15
Management Information Systems Management Information Systems
Managers Can Be Found on All Levels and in All Functional Managers Can Be Found on All Levels and in All Functional
Areas of the Firm Areas of the Firm
Finance
Function
Human
Resources
Function
Information
Services
Function
Manufacturing
Function
Marketing
Function
Strategic planning level Strategic planning level
Management Control Level Management Control Level
Operational Control Operational Control
Level Level
1-15
1.16
Management Information Systems Management Information Systems
What Managers do What Managers do -- --
Fayols FayolsFunctions Functions
Strategic
Planning Level
Management
Control Level
Operational
Control Level
Plan
Control
Organize
Direct
Staff
Organize
Staff
Direct
Plan
Control
Direct
Staff
Plan
Control
Organize
1-16
1.17
Management Information Systems Management Information Systems
What Managers do What Managers do -- --
Mintzbergs MintzbergsRoles Roles
Interpersonal Interpersonal
roles roles
Figurehead
Leader
Liaison
Informational Informational
roles roles
Monitor
Disseminator
Spokesperson
nn
Decisional roles Decisional roles

Entrepreneur

Disturbance handler

Resource allocator

Negotiator
1-17
1.18
Management Information Systems Management Information Systems
Management Skills Management Skills
Communications Communications
Problem solving Problem solving
How can an information
specialist help?
}
1.19
Management Information Systems Management Information Systems
Three Distinct Competencies of IS Three Distinct Competencies of IS
Professionals Professionals
Technical

Knowledge of hardware, software, networking, and security

Most IS professionals are not deep technical experts but can direct/manage others
with the required technical skills
Business

Understand the nature of business including process, management, social,

and communication domains

Unique skills over those with only technical skills

Systems

Knowledge of approaches and methods, also possess critical thinking and

problem solving skills necessary to build and integrate large information
systems

Unique skills over those with only technical skills

1.20
Management Information Systems Management Information Systems
1-20
Levels of the Organization and Traditional Systems Levels of the Organization and Traditional Systems

Management Information Systems

Executive Information Systems

Decision Support Systems (both levels)

Transaction Processing Systems

Functional Area Information Systems

(Across all levels within a function)

Expert Systems
1.21
Management Information Systems Management Information Systems
Traditional Information System Functions Traditional Information System Functions
Transaction
Processing Systems
Management
Information Systems
Executive
Information Systems
Decision Support
Systems
Expert Systems
Functional Area
Information Systems
Process day-to-day business event data
data in an organization (Operational level)
Produce details information to help manage a firm or part of a firm
(Managerial)
Provide very high-level, aggregate information
to support decisions (Executive)
Provide analysis tools and databases to support quantitative
decision making (Multiple)
Mimic human expert in a particular area and provide answers or
advice (Operational)
Support the activities within a specific functional area of the firm
(All)
1.22
Management Information Systems Management Information Systems
Other Information Systems Other Information Systems -- Not as Easy to Categorize Not as Easy to Categorize
Office Automation System
Collaboration
System
Customer Relationship
Management
Electronic
Commerce
Enterprise Resource
Planning System
Support a wide range of predefined, daily work activities of
individuals or groups (e.g. MS Word)
Enable People to communicate, collaborate, and coordinate with
each other (e.g. email)
Support the interaction between the firm and its customers (e.g.
sales force automation or call center technology)
Enable customers to buy goods and service
from a firms website. (www.amazon.com)
Support and integrate all facets of the business (e.g. planning,
manufacturing, sales, etc.)
1.23
Management Information Systems Management Information Systems
IS Competitive Advantage Perspectives: Who is Right? IS Competitive Advantage Perspectives: Who is Right?
IT Doesnt Matter - Car 2003

As IT becomes more pervasive, technology becomes more

standardized and ubiquitous

The result is that the same technologies are available to all

competitors in an industry

This produces no competitive advantage

The Engine that Drives Success: The Best Companies have the Models
Because they Have the Best IT Strategies - Lundberg 2004

Companies with bad business models fail regardless of IT systems or

other capabilities

Companies with good business models use IT to execute successful

business models and succeed
1.24
Management Information Systems Management Information Systems
IS for Competitive Advantage: Business Value IS for Competitive Advantage: Business Value

Using IS to create/support business strategy is the most effective approach

creating the most business value

Strategic IS systems are typically custom built and are integrated to support the
business strategy

Strategic IS systems are by nature hard to replicate just as are good business
models
1.25
Management Information Systems Management Information Systems
Organizational IT Roles Organizational IT Roles
Central IT Organization

Responsible for IT Planning

Coordinates implementations

Establishes organizations IT methods

and standards
Business Unit

Responsible for determining IS business

requirements

Supply budget and personal resources for

implementations
IT Business Unit Support

Liaison between Central IT and the

Business Unit

Spends much time onsite at the

Business Unit

Reports to both orgs

1.26
Management Information Systems Management Information Systems
1-26
The Future of Information Systems: Trends The Future of Information Systems: Trends
Ownership and Control (Old School IS)

Large back logs of user requestsvery poor service

Arrogance and feeling of ownership and control of IT

Cant do attitudetold users why they couldnt do things

Resulted in a very poor relationship with users

Consulting and Service Mentality (New School IS)

IS is taking on an IT consulting role

Service Mentalityusers are customers to be served

Proactively support and problem solve for their customers

Fundamentally believe that customers own the technology

Business managers became technology savy

Systems evolved and became easier to develop

Business organizations developed their own systems

T
H
E
N
1.27
Management Information Systems Management Information Systems
IS Role in Change: Trends and Terms IS Role in Change: Trends and Terms
Downsizing (Sometimes called Rightsizing)

Reducing organizational headcount to meet the financial goals of

the organization

IT is viewed as the lever to provide the systems necessary to

increase productivity
Outsourcing

Transferring business functions outside the organization to increase service

levels and/or reduce operating cost

IT is not immune to this trend. Certain commodity IT technical jobs will be

increasingly transferred overseas

IT must find better methods to manage offshore work

1.28
Management Information Systems Management Information Systems
The Future for IS The Future for IS
Characteristics for success include: continuous learning Characteristics for success include: continuous learning
and growth, finding new ways to add value, flexibility, and growth, finding new ways to add value, flexibility,
and developing unique skills and developing unique skills
IS needs will continue to grow as technology developments
advance
Although outsourcing will continue, there will be strong
demand for IS professionals
There is a need for personnel that can speak the language of
technology and business and the skills to manage projects and
people
1.29
Management Information Systems Management Information Systems
Thank You Thank You
Kridanto Kridanto Surendro Surendro
Laboratorium LaboratoriumSistem Sistem Informasi Informasi STEI STEI
endro@informatika.org endro@informatika.org