Introduction to MIS

Chapter 1
Introduction

Jerry Post

Technology Toolbox: Search Engines

Technology Toolbox: Searching
Cases: Fast Food
Outline
 How can MIS help you in your job?
 What is MIS?
 Why is information technology important? Why do all business
majors need to study it?
 What are e-commerce and e-business? Is e-business increasing or
decreasing?
 Do you know what a manager does? Do you know what a
successful manager will do in the future?
 How is business changing? What will managers need to know in the
future?
 Does technology alone improve a business?
 How do you break businesses into smaller pieces to analyze them?
 Why are strategic decisions so difficult? How do you begin
searching for competitive advantage?
What is MIS?
 Information
◦ Data that has been put into a meaningful and
useful context. Usually to help make a decision.

 Management Information System

◦ A combination of computers and people that is
used to provide information to aid in making
decisions and managing a firm.

 Information Technology (IT)

MIS Components

Hardware
Software

Backup data
Restart job
Virus scan

People Data
Procedures
Goal of This Course
 How can MIS help you do your job?

 Understand the technology.

 Analyze business problems.
 An introduction to systems analysis.
 Identify types of problems that MIS can
help solve through cases.
 Ability to classify problems.
 Know when to call for help.
Why is MIS Important?
 MIS affects all areas of business
◦ Manufacturing
◦ Accounting & Finance
◦ Human resources
◦ Marketing
◦ Top management
 Performance evaluations—expectations
Chapters/Topics
1. Introduction 8. Teamwork
2. Technology Foundations 9. Decisions
3. Networks 10. Strategy
4. Databases 11. Entrepreneurship
5. Security 12. Systems
6. Transactions and ERP 13. MIS Organization
7. eCommerce 14. Society
 Productivity Growth: Output per Worker
Output per Person
120

100

80

60

40

20

0
1994-Q1
1994-Q3
1995-Q1
1995-Q3
1996-Q1
1996-Q3
1997-Q1
1997-Q3
1998-Q1
1998-Q3
1999-Q1
1999-Q3
2000-Q1
2000-Q3
2001-Q1
2001-Q3
2002-Q1
2002-Q3
2003-Q1
2003-Q3
2004-Q1
2004-Q3
2005-Q1
2005-Q3
2006-Q1
2006-Q3
2007-Q1
2007-Q3
2008-Q1
2008-Q3
2009-Q1
2009-Q3
2010-Q1
2010-Q3
1. Managers need to use technology to increase productivity to be competitive.
2. With a 2.9% growth rate, in a decade, productivity increases 34%.
Companies can produce the same output with half the workers. Will you be
one of the workers replaced?
http://data.bls.gov:8080/PDQ/outside.jsp?survey=pr
What are e-Commerce and e-Business?

 Business-to-Consumer (B2C)
◦ Selling retail products to consumers
 Business-to-Business (B2B)
◦ Selling at the wholesale level to other businesses
 E-Business
◦ Using Internet technologies to conduct any level
of business
◦ E-Commerce
◦ Intranets
◦ Most areas of MIS
Retail E-Commerce Statistics
Retail
U.S. Retail and E-Commerce Sales
Ecommerce
1200 60

1000 50

800 40
Retail Billtion $

600 30

400 20

200 10

0 0

In 2010 EC was about 5 percent of total.

Remove autos and auto parts and EC is about 6 percent.
Notice the seasonal peak in the fourth quarter.
Notice the EC is growing faster than total retail sales.
http://www.census.gov/retail/index.html#ecommerce
Technology Excesses?
Typical Price Declines
• You can buy a new
model item when it is
800 released or wait for the
700 price to drop.
600 • You can keep buying
500 new releases or
price

400
continue to use an “old”
300
model.
200
• Answers depend on
100
your needs, the
0
1 3 5 7 9 11 13 15 17 features offered, and
time the reliability of the old
items.
• Plus the bling factor.
What do Managers do?
 Traditional
◦ Organizing
◦ Planning
◦ Control
 Mintzberg
◦ Interpersonal
◦ Informational
◦ Decisional
 Luthans
◦ Traditional 50%
◦ Formal Communication 30%
◦ Networking 20%
 Meetings

Managers and professionals spend considerable time in meetings. Providing

support for teamwork and group decisions is an important issues in MIS.
 Making Decisions
 Methodology v Ad Hoc Decisions
 Decision Process
◦ Collect Data
◦ Identify Problems & Opportunities
◦ Make Choices
2 3
1
Traditional Management
CEO Condensed reports
Commands

VP VP VP VP VP
Finance Marketing Accounting HRM MIS
Analyze data

Layers of middle managers

Collect
data
Customers
Decentralization
Management Team
CEO
VP VP VP VP VP
Fin Mrkt Acct HRM MIS
Strategy

Corporate
Finance Marketing Accounting HRM
Team Team Team Team Database
&
Network

Sales Methodology/Rules
Franchise
Team

Customers
Business Trends
 Changing business environment
◦ Specialization
◦ Management by Methodology and Franchises
◦ Mergers
◦ Decentralization and Small Business
◦ Temporary Workers
◦ Internationalization
◦ Service-Oriented Business
◦ Re-engineering
 Need for faster responses and flexibility
Business Trends & Implications
 Specialization
◦ Increased demand for technical skills
◦ Specialized MIS tools
◦ Increased communication
◦ Emphasis on Teamwork
 Methodology & Franchises
◦ Reduction of middle management
◦ Increased data sharing
◦ Increased analysis by top management
◦ Computer support for rules
◦ Re-engineering
 Mergers
◦ Larger companies
◦ Need for control and information
◦ Economies of scale
 Decentralization & Small Business
◦ Communication needs
◦ Lower cost of management tasks
◦ Low maintenance technology
 Business Trend Summary
Business Trend Implications for Technology

Specialization 1.Increased demand for technical skills

2.Specialized MIS tools
3.Increased communication

Methodology & Franchises 1.Reduction of middle management

2.Increased data sharing
3.Increased analysis by top management
4.Computer support for rules
5.Re-engineering

Mergers 1.Four or five big firms dominate most industries

2.Need for communication
3.Strategic ties to customers and suppliers

Decentralization & Small 1.Communication needs

Business 2.Lower cost of management tasks
3.Low maintenance technology

Temporary Workers 1.Managing through rules

2.Finding and evaluating workers
3.Coordination and control
4.Personal advancement through technology
5.Security

Internationalization 1.Communication
2.Product design
3.System development and programming
4.Sales and marketing

Service Orientation 1.Management jobs are information jobs

2.Customer service requires better information
3.Speed
Business Trends & Implications
 Temporary Workers
◦ Managing through rules
◦ Finding and evaluating workers
◦ Coordination and control
◦ Personal advancement through technology
◦ Security
 Internationalization
◦ Communication
◦ Product design
◦ System development and programming
◦ Sales and marketing
 Service Orientation
◦ Management jobs are information jobs
◦ Customer service requires better information
◦ Speed
Internationalization
U.S. Trade Imports/GDP

Exports/GDP

0.2

0.18

0.16

0.14

0.12
Percent

0.1

0.08

0.06

0.04

0.02

Year

http://www.bea.gov/national/nipaweb/Index.asp
International Web Browsers
Web Users (Language)

Other, 17.8
Korean, 2
Russian, 3 English, 27.3
French, 3

Arabic, 3.3
Chinese, 22.6
German, 3.8
Portuguese,
4.2
Japanese, 5
Spanish, 7.8

http://www.internetworldstats.com/stats7.htm
Web Users (Counts)
Africa, 110.9
Middle East, Oceania/
63.2 Australia,
Latin 21.3
America/
Caribbean, Million
204.7 Users

Asia, 825.1
North
America,
266.2

Europe,
475.1
Asia: 30 percent of population
North America: 75 percent

http://www.internetworldstats.com/stats.htm
 US Employment Patterns
U.S. Employment Patterns
140

120

100
Million Workers

80
Service
Management
60
Manufacturing
40 Farm

20

0
1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Categories and definitions have changed over time.

Management includes professional, sales, and administrative.
The key point is that most jobs are information-processing jobs.
But the numbers measure number of workers, not the value or sales.
http://www.bls.gov/webapps/legacy/cpsatab4.htm
 Changing Business Environment
 US History: Farmer Laborer Management

Year Farm Mfg Mgt Service

1920 29% 44% 22% 6%

1940 23 38 30 8
1960 9 36 43 12
1980 3 32 52 13
2000 1 16 66 17
2010 1 11 68 20
MIS Organization

Strategic
Mgt.

Tactical
Management

Business Operations
 Operations, Tactics,Strategy
Sector Operations Tactics Strategy
Production • Machine settings • Rearrange work area • New factory
• Worker schedules • Schedule new products • New products
• Maintenance sch. • Change inventory method • New industry
Accounting • Categorize assets • Inventory valuation • New GL system
• Assign expenses • Depreciation method • Debt vs. equity
• Produce reports • Finance short/long term • International taxes
Marketing • Reward salespeople • Determine pricing • Monitor competitors
• Survey customers • Promotional campaigns • New products
• Monitor promotions • Select marketing media • New markets
 Decision Levels
Decision Description Example Type of Information
Level
Strategic Competitive advantage, New product that External events, rivals,
become a market leader. will change the sales, costs quality,
Long-term outlook. industry. trends.
Tactical Improving operations New tools to cut Expenses, schedules,
without restructuring the costs or improve sales, models,
company. efficiency. forecasts.
Operations Day-to-day actions to Scheduling Transactions,
keep the company employees, accounting, human
functioning. ordering supplies. resource management,
inventory.
Introduction to Strategy
 Risk & Reward
 Creativity
 Porter’s External Agents
◦ Customers
◦ Suppliers
◦ Competitors
◦ Government
 Strategy/Porter
Threat of
New Entrants

Bargaining Power Rivalry Among Bargaining Power

of Suppliers Existing Competitors of Buyers

Threat of Substitute
Products or Services
Baxter/Strategy
Typical Supply Relationship

Hospital
American Hospital Supplier
Supply

Supply
Closets Warehouse

Supplier
Supply storeroom

Supplier
Baxter/Strategy
AHS/Baxter Computer Link

Supplier
Hospital
American Hospital
Monitor
Supply Baxter
Usage data
Supply Closets Computer

Deliver Warehouse
Supplies as
needed
Supplier
Free space
Accurate usage data

Supplier
An Internet Approach for Hospital Supply
Daily Auction
Bid1
Bid2 Supplier
Hospital
Bid3 <<purchase
Baxter
Supply Closets
Internet
Supplier

Johnson

Winning bidder
delivers supplies
Supplier
Strategy/Organization
 Strength  Weaknesses
◦ Source of strength ◦ Effect on company
◦ Value of strength ◦ Possible solutions
◦ How can it be developed? ◦ Cost of solution
◦ What could undermine it? ◦ Result and cost of leaving as-is
◦ Development costs (do nothing)
◦ Additional benefits
(opportunities)
Cloud Computing
 As consumers and students, you are familiar with Web-based
services.
◦ E-commerce, sales
◦ News, entertainment
◦ Communications
◦ Social networks and interaction
 Businesses can use the same approaches and run software
and data on Web servers with applications on laptops, tablets,
and cell phones to access this data.
◦ Cloud computing consists of running the main servers, data, and
business logic on Web-based servers in the Internet cloud.
◦ Each chapter explores impacts and implications for business of
moving more operations into a Web-based system.
Technology Toolbox: Choosing a Search Engine
General purpose search engines Consider using multiple
Google, Bing, Yahoo search engines because
Meta-searches across multiple engines some of them filter
Dogpile responses based on your
Encyclopedia prior queries.
Wikipedia.org
Dictionary
Wiktionary.org (or click the research button in IE)
Phone book
Switchboard, Superpages
Products
Mysimon, Cnet
Government data
CIA.gov (World Factbook)
Fedstats.gov (main data source)
SEC.gov (EDGAR corporate filings)
Math and Science and some Data
Wolframalpha
Other (and often better)
Your library databases
 Quick Quiz: Search Engines
Where would you begin your search to answer the following
questions?
1. Under the proposed IAU definition, which planetoid falls between
Mars and Jupiter?
2. By revenue, which was the largest company in the world in 2010?
3. Find the best price on a 512 GB SSD.
4. Which U.S. professional basketball team had the fewest wins in
the 2010-2011 season?
5. Which celebrities are still alive? Sophia Loren, Harman Killebrew,
Phyllis Diller, Nancy Reagan, I.M. Pei.
 Advanced Searches
Boolean searches: And/Or/Not
Phrases: “white knight”

“white knight” 126,000

“white knight” corporate 12,000
“white knight” corporate
–hackers –groups –Australia –resources 5,080
“white knight” corporate merger
–hackers –groups –resources 701
“white knight” corporate merger
–hackers –groups –resources –history –Australia 655

You can also search by date, domain (company), linked

pages, and even reading level (with Google).
 Wolfram Alpha (Mathematica)
http://www.wolframalpha.com/

Search:
derivative of 5*x^4 - 13*x^3

Other searches:
A date
A town
Two stocks
 Bing (Microsoft)
http://www.bing.com

Organizing the
results to help find
answers and
knowledge.

http://www.yippy.com
Was: http://www.clusty.com
(Vivisimo)
 Technology Toolbox: Government Data
Agency Main Types of Data Site
Labor (BLS) Employment and prices www.bls.gov/data
Census Demographic and maps www.census.gov
Economic Analysis (BEA) Economic summaries www.bea.gov
Transportation Statistics Airline, rail, and road www.bts.gov
Justice Statistics Crime and courts bjs.ojp.usdoj.gov
Economic Research (Ag) Food and farm economics www.ers.usda.gov
Health (CDC) Health and Healthcare www.cdc.gov/nchs
Securities and Exchange Business filings www.sec.gov
(SEC) (EDGAR)

http://www.fedstats.gov
 Google: Public Data (2009)
WolframAlpha
Search:
CA unemployment rate

Can use other

standard statistics
from government
databases,
including
demographics.
 Quick Quiz: Government Data
1. What was the U.S. monthly unemployment rate for
the last year?
2. What is the current population of the U.S.?
3. What was the value of the U.S. trade deficit for the
last year?
 Cases: Fast Food Industry
Annual Revenue
30

25

20 McDonald's
Billion $

Burger King
15
Yum

10 Starbucks
Wendys
5

0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Net Income / Revenue

0.25

0.20

0.15
McDonald's
0.10
Burger King
Ratio

0.05 Yum
Starbucks
0.00
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Wendys
-0.05

-0.10

-0.15