Management Information Systems

Chapter 1

Introduction
Technology Toolbox: Search Engines Technology Toolbox: Searching Cases: Fast Food

McGraw-Hill/Irwin

Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.

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?
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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)

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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.

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Why is MIS Important?

MIS affects all areas of business

Manufacturing Accounting & Finance Human resources Marketing Top management

Performance evaluationsexpectations

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Productivity Growth: Output per Worker

Productivity 140 120 100 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

1.

Managers need to use technology to increase productivity to be competitive.

2.

Productivity doubles in 14 years with todays 5% rate. Companies produce the same output with half the workers. Will you be one of the workers replaced?
http://www.bls.gov/news.release/prod2.t02.htm
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2003-Q3

What are e-Commerce and e-Business?

Business-to-Consumer (B2C)

Selling retail products to consumers Selling at the wholesale level to other businesses Using Internet technologies to conduct any level of business E-Commerce Intranets Most areas of MIS

Business-to-Business (B2B)

E-Business

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Retail E-Commerce Statistics

U.S. Retail and E-Commerce Sales
1,000 900 800

Total retail E-C retail

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Retail Sales ($b)

700 600 500 400 300 200 100 0

12 10 8 6 4 2 0

1999-Q4

2000-Q1

2000-Q2

2000-Q3

2000-Q4

2001-Q1

2001-Q2

2001-Q3

2001-Q4

2002-Q1

2002-Q2

2002-Q3

2002-Q4

2003-Q1

2003-Q2

B2C is about 1.5 percent of total retail sales. Notice the seasonal peak in the fourth quarter. Notice the EC is growing faster than total retail sales.
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http://www.census.gov/mrts/www/current.html

2003-Q3

Retail E-Commerce ($b)

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What do Managers do?

Traditional

Organizing Planning Control Interpersonal Informational Decisional Traditional Formal Communication Networking 50% 30% 20%

Mintzberg

Luthans

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Meetings

Managers and professionals spend considerable time in meetings. Providing support for teamwork and group decisions is an important issue in MIS.

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Making Decisions

Methodology v. Ad Hoc Decisions Decision Process

Collect Data Identify Problems & Opportunities Make Choices

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Traditional Management
CEO
Condensed reports

Commands

VP Finance

VP Marketing

VP Accounting

VP HRM

VP MIS

Analyze data

Layers of middle managers

Collect data

Customers

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Decentralization
Management Team CEO
VP Fin VP Mrkt VP Acct VP HRM VP MIS

Strategy
Finance Team Marketing Team Accounting Team HRM Team

Corporate Database & Network

Sales Team

Methodology/Rules

Franchise

Customers

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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

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Business Trend Specialization

Implications for Technology 1.Increased demand for technical skills 2.Specialized MIS tools 3.Increased communication 1.Reduction of middle management 2.Increased data sharing 3.Increased analysis by top management 4.Computer support for rules 5.Re-engineering 1.Four or five big firms dominate most industries 2.Need for communication 3.Strategic ties to customers and suppliers 1.Communication needs 2.Lower cost of management tasks 3.Low maintenance technology

Methodology & Franchises

Business Trend Summary

Mergers

Decentralization & Small Business

Temporary Workers

1.Managing through rules 2.Finding and evaluating workers 3.Coordination and control 4.Personal advancement through technology 5.Security
1.Communication 2.Product design 3.System development and programming 4.Sales and marketing 1.Management jobs are information jobs 2.Customer service requires better information 3.Speed

Internationalization

Service Orientation

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US Employment Patterns
US Employment Patterns
160 140

millions of workers

120 100 80 60 40 20 0 1920 1930 1940 1950 1960 1970 1980 1990 2000 Service Management Manufacturing Farm

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International Web Browsers

Web Users
Asia-Other 2% Scandanavian 2% Russian 2% Italian 3% Portuguese 3% French 3% Korean 4% Europe-Other 4% German 7% Spanish 8% Japanese 9% Chinese 13% English 35% Malay 2% Dutch 2% Arabic 1%

Source: http://www.glreach.com/globstats/

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MIS Organization

Strategic Mgt. Tactical Management

Business Operations

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Operations, Tactics,Strategy
Sector Production Operations Machine settings Worker schedules Maintenance sch. Categorize assets Assign expenses Produce reports Reward salespeople Survey customers Monitor promotions Tactics Rearrange work area Schedule new products Change inventory method Inventory valuation Depreciation method Finance short/long term Determine pricing Promotional campaigns Select marketing media Strategy New factory New products New industry New GL system Debt vs. equity International taxes Monitor competitors New products New markets

Accounting

Marketing

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Decision Levels
Decision Level
Strategic

Description
Competitive advantage, become a market leader. Long-term outlook. Improving operations without restructuring the company.

Example
New product that will change the industry. New tools to cut costs or improve efficiency.

Type of Information
External events, rivals, sales, costs quality, trends. Expenses, schedules, sales, models, forecasts.

Tactical

Operations

Day-to-day actions to keep the company functioning.

Scheduling Transactions, employees, accounting, human ordering supplies. resource management, inventory.

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Baxter/Strategy
Typical Supply Relationship Hospital American Hospital Supply Warehouse Supplier Supplier

Supply Closets

Supply storeroom

Supplier

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Baxter/Strategy
AHS/Baxter Computer Link Supplier
Monitor Usage data
Supply Closets

Hospital

American Hospital Supply Computer Warehouse

Baxter

Deliver Supplies as needed Free space

Supplier

Accurate usage data

Supplier

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An Internet Approach for Hospital Supply

Daily Auction
Bid1 Bid2 Bid3 <<purchase

Hospital

Supplier Baxter

Supply Closets

Internet Supplier Johnson

Winning bidder delivers supplies

Supplier

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Technology Toolbox: Choosing a Search Engine

General purpose search engines Google, Vivisimo, MSN, Lycos, Altavista Human supervised category searches Yahoo, Looksmart Meta-searches across multiple engines Webcrawler, Dogpile Encyclopedia Wikipedia.org Dictionary Bartleby (or click the research button in IE) Phone book Switchboard, Superpages Products Mysimon, Cnet Government data CIA.gov (World Factbook) Other (and often better) Fedstats.gov (main data source) Your library databases SEC.gov (EDGAR corporate filings)

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Quick Quiz: Search Engines

Where would you begin your search to answer the following questions:

1. How many Internet users are there in Tanzania?

2. How much revenue did Heinz earn last year? 3. What is the lowest price on a 21 inch LCD monitor?

4. Where are the best surfing beaches in Hawaii?

5. How many students applied to your school last year? 6. Which movie won the Oscar for best picture last year?

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Cases: Fast Food Industry

Annual Revenue
18 16 14 12 McDonald's Burger King Yum 8 6 4 2 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Starbucks Wendys

Billion $

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What do customers want? How do you use information technology to find out?

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