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Chapter 1

Chapter 1. The Information Age in Which You Live: Changing the Face of Business. INTRODUCTION. Management information systems (MIS) – helping people perform all tasks related to information processing and management. 3 key resources: People Information Technology.

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Chapter 1

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  1. Chapter 1 The Information Age in Which You Live: Changing the Face of Business

  2. INTRODUCTION • Management information systems (MIS) – helping people perform all tasks related to information processing and management. 3 key resources: • People • Information • Technology

  3. MIS RESOURCE #1: INFORMATION Information is often aggregated data that has meaning such as average age, youngest and oldest customer, and a histogram of customer ages Data – raw facts

  4. MIS RESOURCE #1: INFORMATION Business intelligence – collective information that supports important, strategic decision making

  5. MIS RESOURCE #2: PEOPLE • People are the most important resource in any organization, with a focus on • Technology literacy – knowing how/when to apply technology • Information literacy – knowing how to use information • Ethical responsibilities

  6. MIS RESOURCE #3: INFORMATION TECHNOLOGY

  7. FINANCIAL IMPACT OF INFORMATION TECHNOLOGY • IT can definitely impact break-even analysis • Fixed costs – costs you incur even if you don’t sell anything • Variable costs – costs you incur when you sell something (COGS) • Revenue – how much you sell one unit for

  8. FINANCIAL IMPACT OF INFORMATION TECHNOLOGY Reduce Fixed Costs Reduce Variable Costs • Increase Revenue • Recommendation Engines • Long-Tail Economics • Many others

  9. INDUSTRY IMPACT OF INFORMATION TECHNOLOGY Porter’s Five Forces Model helps business people understand the relative attractiveness of an industry and the industry’s competitive pressures.

  10. Buyer & Supplier Power • Buyer power – high when buyers have many choices and low when their choices are few • Supplier power – high when buyers have few choices and low when choices are many • The inverse of each other

  11. Threat of Substitute Products and Services and New Entrants • Threat of substitute products and services – high when there are many alternatives for buyers • Threat of new entrants – high when it is easy for competitors to enter the market • Rivalry among existing competitors – high when competition is fierce

  12. STRATEGY IMPACT OF INFORMATION TECHNOLOGY • Porter identified 3 generic business strategies for beating the competition • Overall cost leadership • Differentiation • Focus

  13. STRATEGY IMPACT OF INFORMATION TECHNOLOGY Focus - focusing on offering products or services to a particular segment or buyer group, within a segment of a product line, to a specific geographic market, etc Differentiation - offering a product or service that is perceived as being “unique” in the marketplace Cost leadership - offering the same or better quality product or service at a price that is less than what any of the competition is able to do

  14. Run-Grow-Transform (RGT) Framework • Run-grow-transform (RGT) framework – the allocation in terms of percentages of IT dollars on various types of business strategies

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