Meeting 1 Introductory to Information System Management Course Communication and Information Management Program College of Multimedia Yogyakarta Spring 2014/2015 Tri Anggraeni, S.Kom., M.Sc.

Information System Management

is not

Management Information System

Information System Management I. Achieving Business Success through Information Technology

1. Business Driven Technology Overview (1, 2) 2. Identifying Competitive Advantages (3, 4, 5) 3. Strategic Initiatives for Implementing Competitive Advantages (6,

7) 4. Measuring the Success of Strategic Initiatives (8, 9, 10) 5. Organizational Structures That Support Strategic Initiatives (11, 12)

II. Managing Information for Business Initiatives • Valuing Organizational Information (13, 14)

Reference : Haag, Baltzan, Phillips (2005) Information System Management. Mc Graw Hill

Meeting 1 Business Driven Technology Overview

Communication and Information Management Program College of Multimedia Yogyakarta Spring 2014/2015 Tri Anggraeni, S.Kom., M.Sc.

LEARNING OUTCOMES Understand : • The difference between management

information systems (MIS) and information technology (IT).

• The relationships among people, information technology, and information.

• People at different levels of an organization have different information needs.

• Overview of the units in this text and a few of the important business and technology concepts covered in each unit.

MIS vs IT People

IT Information

Contents 1. Achieving Business Success through

Information Technology

2. Managing Information for Business Initiatives

3. Enhancing Business Decisions

4. Creating Collaborative Partnerships in Business

5. Transforming Organizations

1. ACHIEVING BUSINESS SUCCESS THROUGH INFORMATION TECHNOLOGY

1. Information technology (IT) 2. Management information systems (MIS) 3. Correlation between IT and MIS 4. Business success principles

Information Technology (IT) • IT : any computer-based tool that people use to work with

information and support the information and information-processing needs of an organization.

• IT can be an important enabler of business success and innovation.

• But, IT != business success and innovation.

• IT does not represent business success and innovation.

• IT is most useful when it leverages the talents of people.

• IT in and of itself is not useful unless the right people know how to use and manage it effectively.

Management Information Systems (MIS)

• MIS : a business function (just as marketing, finance, operations, and human resource management. Those are business functions)

• Formally defined :, management information systems (MIS) is the function that plans for, develops, implements, and maintains IT hardware, software, and the portfolio of applications that people use to support the goals of an organization.

• To perform the MIS function effectively : almost all organizations today, particularly large and medium-sized ones, have an internal IT Department, often called Information Technology (IT), Information Systems (IS), or Management Information Systems (MIS).

• The plans and goals of the IT Department must align with the plans and goals of the organization.

• If a primary goal of the organization is to increase sales, as at Levi’s, IT can facilitate Levi’s relationship with WalMart.

• IT can enable an organization to : • Increase efficiency in manufacturing • Retain key customers • Seek out new sources of supply • Introduce effective financial management.

• It is not always easy for managers to make the right choices when using IT to support (and often drive) business initiatives.

• Most managers understand their business initiatives well, but are often at a loss when it comes to knowing how to use and manage IT effectively in support of those initiatives.

• Managers who understand what IT is, and what IT can and cannot do, are in the best position to help their organization succeed.

Business Success = People + IT + Information

• In essence : People use IT to work with Information.

• In the order of priority above, people, information, and IT are inextricably linked.

• One fails all fail • One fails business fail

Tools can be used by organizations to achieve success • Porter’s Five Forces • Value chain • Supply chain management • Customer relationship management

2. MANAGING INFORMATION FOR BUSINESS INITIATIVES a. What must be done by organization about

information b. MIS = DB + DBMS c. Managing Information with a Database and

Database Management System (DBMS)

Organization must manage information properly Organization must: 1. Determine what information it requires. 2. Acquire that information. 3. Organize the information in a meaningful fashion. 4. Assure the information’s quality. 5. Provide software tools so that employees throughout

the organization can access the information they require.

MIS = DB + DBMS • A database maintains information about various types of

objects (inventory), events (transactions), people (employees), and places (warehouses).

• A database management system (DBMS) is software through which users and application programs interact with a database.

Primary task of database and DBMS • The primary task of a database is

to store and organize every piece of information related to transactions and business events.

• Transactions, e.g.: the sale of a product. • Business events, e.g. : the hiring of a new employee.

• Databases store a tremendous amount of detailed

information. • The primary task of a DBMS is

to allow users to create, access, and use information stored in a database.

Managing Information with a Database and Database Management System (DBMS)

• User can directly interact with a database using different types of IT tools such as views and report generators,

• Users can also interact indirectly with a database by using application programs such as accounting, marketing, and manufacturing applications.

3. Enhancing Business Decisions

a. Activities, Information, and Information Technology within an Organization

b. Online transaction processing (OLTP) c. Online analytical processing (OLAP) d. Data Warehouse and Data Mining Introduces the role of information technology in strategic decision making and covers in detail topics such as data marts, data-mining tools, digital dashboards, supply chain management, and customer relationship management.

Activities, Information, and Information Technology within an Organization • People in the organization have unique information

needs and thus require various sets of information technology tools.

Online transaction processing (OLTP) • The capturing of transaction and event

information using technology to : 1. process the information according to defined

business rules 2. store the information 3. update existing information to reflect the

new information.

• At this level during OLTP, the organization must capture every detail of transactions and events.

• The activities of processing, storing, and updating information occur within the context of databases and DBMSs.

Online analytical processing (OLAP) • Manipulation of information to create

business intelligence in support of strategic decision making.

• Moving up through the organizational pyramid, people (typically managers) deal less with the details (“finer” information) and more with meaningful aggregations of information (“coarser” information) that help them make broader decisions on behalf of the organization.

• Business intelligence : a broad, general term describing information that people use to support their decision-making efforts.

Data Warehouse and Data Mining • Data warehouse : logical collection of

information—gathered from many different operational databases—that supports business analysis activities and decision-making tasks.

• Data-mining tools : tools that people use to work with information in a data warehouse.

• Data-mining tools use a variety of techniques to find patterns and relationships in large volumes of information and infer rules from them that predict future behavior and guide decision making.

4. CREATING COLLABORATIVE PARTNERSHIPS IN BUSINESS a. Organization b. Teams, Partnerships, and Alliances within and External

to an Organization c. Collaboration Systems d. Core competency strategy e. Information partnerships

Organization To be successful and avoid being

eliminated by the competition

1. Undertake new initiatives 2. Address both minor and

major problems 3. Capitalize on significant

opportunities

Constantly

Because all the requisite expertise needed is beyond the scope of a single individual or even the organization

To support of these activities

Create and utilize teams, partnerships, and alliances

Teams, Partnerships, and Alliances within and External to an Organization

• Groupware : software tools that support team interaction and dynamics including calendaring, scheduling, and videoconferencing.

• Document management systems (DMS) : support the electronic capturing, storage, distribution, archival, and accessing of documents. Document management systems are ideal for moving standard business documents, such as purchase orders, among various functions including order processing, inventory management, billing, warehousing, and shipping.

• Knowledge management systems (KMS) : systems that support the capturing and use of an organization’s “know how” (common procedures).

• Project management software : specifically supports the long-term and day-to-day management and execution of the steps in a project (such as building a new warehouse or designing and implementing a new IT system).

Example of Collaboration Systems : Project Management Advisors, Inc. (PMA): provides its clients with expertise in project management for real estate design, construction, and occupancy processes.

PMA required a system for : sharing project information with its project team members who were typically located in cities across the countries.

Project plans

Budgets Progress reports

Implemented Synergy, a Web-based collaboration tool that :

Provides the various team members access to project information.

Offers the functionality to control which team members can update documents and which team members can only view documents.

Replaced e-mail discussions with Web-based discussion forums

Provide an organized record of project-related discussions among team members.

Synergy @PMA

Permitted PMA to undertake larger, more complex projects and reduce its administrative costs at the same time

• The key strength, a business function that it does better than any of its competitors.

• Example : • Apple Computer : strength in product design • Accenture’s : design and installation of information

systems

• One in which an organization chooses to focus specifically on what it does best (its core competency) and forms partnerships and alliances with other specialist organizations to handle nonstrategic business processes.

Core competency strategy

Information partnership • Occurs when two or more organizations

cooperate by integrating their IT systems, thereby providing customers with the best of what each can offer.

• An integral foundation for many business initiatives, including supply chain management.

• IT systems make such business partnerships and alliances easier to establish and manage.

• The advent of the Internet has greatly increased the opportunity for IT-enabled business partnerships and alliances.

Organization 2 Organization n

Organization 1

cooperate

IT system 1

IT system 2 IT system n

Integrate

Example • Amazon.com developed a profitable business segment by

providing e-business outsourcing services to other retailers who use Amazon’s Web site software. • Some well-known retailers partnering with Amazon.com

include Marshall Fields, Office Depot, and Target.

• Levi’s core competency : brand-name differentiation and recognition

• Wal-Mart’s core competency : retail cost leadership. • The information partnership between those two organizations

enables cost-leadership selling of a widely recognized brand name. It is a win-win situation for both organizations.

5. TRANSFORMING ORGANIZATIONS

• Digital Darwinism • Impact of advances in technology

Digital Darwinism • Organizations which cannot adapt to the new demands

placed on them for surviving in the information age are doomed to extinction.

• Rapid changes in technology coupled with recent trends toward the globalization of business have raised the intensity of the competitive environment in just about every industry.

• In the words of one long-time business consultant, “Nothing’s easy any more.”

• What this means is that managers will need all of the tools at their disposal to ensure that their business thrives in the information age by continuously transforming itself.

Several business segments that have changed dramatically because of Internet-based competition

Impact of advances in technology • There are numerous examples of organizations losing revenue

because of advances in technology. • Example : airline industry lost revenue from business travelers after :

• Invention of videoconferencing technologies because managers no longer have to travel to distant places to meet with their co-workers.

• Invention of networking technologies that give individuals the ability to access systems remotely to make updates, changes, and fixes.

• Technical specialists do not have to physically travel to the location of the system; they can simply log in from wherever they are located.

Managers must continually watch for Internet competition and technology advances that have the potential to corrode market share.