Management Information Systems - Week 1

Course Information

Learning Objectives
1. Business Transformation: How information systems are transforming business and why
they are essential for running and managing businesses today
2. System Components: Understanding what an information system is, how it works, and its
management, organization, and technology components
3. Value Creation: Why complementary assets are essential for ensuring information systems
provide genuine value for organizations
4. Academic Disciplines: What academic disciplines are used to study information systems
and how each contributes to understanding

Lecture 1: Introduction - Part 1

Goals of MIS
The hierarchy of information value:
 Data → Information → Knowledge → Wisdom
What Is an Information System?
Definition: A set of interrelated components that:
 Collect, process, store, and distribute information
 Support decision making, coordination, and control
Key Distinctions:
 Data: Streams of raw facts
 Information: Data shaped into meaningful form; an ordered set of data that you can
understand and act on
Example: Data-Information-Decision Flow
DATA:
Region Sales (Rs.)
North 50 lacs
West 40 lacs
South 22 lacs
East 10 lacs

INFORMATION:
Sales is best in North region and worst in South and East regions,
where the target of 40 lacs has been missed.

DECISION:
1. Appoint more sales engineers in South and East regions
2. Increase advertisement budget
3. Offer more discounts to dealers

Three Core Activities of Information Systems

1. Input: Captures raw data from organization or external environment
 2. Processing: Converts raw data into meaningful form
3. Output: Transfers processed information to people or activities that use it
4. Feedback: Output returned to appropriate members to help evaluate or correct input stage
How Information Systems Are Transforming Business
Key transformation areas:
 Global networking in real-time
 Mobile digital platforms
 Improved customer experience and demand response
 Reduced inventories
 Growing online learning and readership
 Expanding e-Commerce and Internet advertising
 Banking, Finance, and Stock Markets evolution
 New federal security and accounting laws (e.g., 5-year email storage requirements)
What's New in Management Information Systems
Technology Advances:
 Cloud computing
 Big Data and Internet of Things (IoT)
 Mobile digital platforms
Management Changes:
 Online collaboration and social networking software
 Business intelligence
 Virtual meetings (especially post-COVID-19)
Organizational Changes:
 Globally connected enterprises
 Changing business models driven by new technology (e.g., Uber, Airbnb)
 Rapid technological change
 Emphasis on time/speed to market
 Social business transformation
The Emerging Digital Firm
Characteristics of a fully digital firm:
 Significant business relationships are digitally enabled and mediated
 Core business processes accomplished through digital networks
 Key corporate assets managed digitally
 Greater flexibility in organization and management
 Time shifting (multiple time zones)
 Space shifting (multiple geographical locations, work from home)

Lecture 2: Introduction - Part 2

Six Strategic Business Objectives of Information Systems
1. Operational Excellence
 Improvement of efficiency to attain higher profitability
 Information Systems Technology as a tool for greater efficiency and productivity
  Examples: Amazon, Flipkart, Alibaba operational excellence
2. New Products, Services, and Business Models
 Business Model: Describes how a company produces, delivers, and sells products/services
to create wealth
 Information systems as major enabling tools for innovation
 Examples: Apple's iPad, Google's Android OS, Netflix, Uber, Airbnb, Amazon
3. Customer and Supplier Intimacy
 Serving customers well increases return visits, revenue, and profits
 Customer Example: High-end hotels using computers to track preferences and customize
environment
 Supplier Example: Intimate relationships lower costs through vital inputs
 Digital Examples: Amazon, Swiggy achieving high customer intimacy
4. Improved Decision Making
Without accurate information, managers face:
 Forecasts, best guesses, luck
 Overproduction, underproduction
 Misallocation of resources
 Poor response times
 Poor outcomes that raise costs and lose customers
5. Competitive Advantage
Achieved through:
 Delivering better performance
 Charging less for superior products
 Responding to customers and suppliers in real-time
 Examples: Apple, Walmart, UPS, Airbnb, Uber, OYO
6. Survival
Information technologies as business necessities:
 Governmental regulations requiring record-keeping
 Examples: Toxic Substances Control Act, Sarbanes-Oxley Act
 Compliance requirements: Financial, Statutory, Environmental, Income-Tax, GST records
 Current pandemic situations forcing organizational changes (work from home)
Information Technology and Organizations
Major Organizational Influencers:
 Structure
 Business processes
 Politics
 Culture
 Environment
 Management decisions
Features of an Organization
 Use of hierarchical structure
 Accountability and authority in impartial decision-making systems
 Adherence to efficiency principles
  Decision making and business processes
 Organizational politics, culture, and environment
 Ethical practices
Major Economic Impacts of Information Systems
 IT changes relative costs of capital and information costs
 Information systems technology as a factor of production (like capital and labor)
 IT affects cost and quality of information, changing information economics
 IT helps firms contract in size by reducing transaction costs
 Enables outsourcing
Organizational and Behavioral Impacts
IT Organizational Flattening:
 Decision making pushed to lower levels
 Fewer management levels/managers needed
 IT enables faster decision making and increases span of control
 Authority increasingly relies on knowledge and competence rather than formal positions
Organizational Resistance to Change
Common Issues:
 Information systems influence access to key resource: information
 Systems potentially change organization's structure, culture, politics, and work
 Most common reason for large project failure: organizational and political resistance to
change
Change Management Model: Technology → Task → Process → People
Michael Porter's Competitive Forces Model
Five Competitive Forces:
1. Traditional competitors
2. New market entrants
3. Substitute products and services
4. Customers
5. Suppliers
IT-Enabled Strategies for Managing Competitive Forces
1. Low-cost leadership (e.g., Walmart)
2. Product differentiation (e.g., Apple, Google)
3. Focus on market niche (e.g., Uber, Airbnb)
4. Strengthen customer and supplier intimacy (e.g., Netflix, Amazon)
Internet's Impact on Competitive Advantage
 Transformation and disruption of some industries (travel agencies, printed encyclopedias,
newspapers)
 Intensified rivalry but competitive forces still at work (e.g., Booking.com)
 Universal standards allow new rivals and market entrants (e.g., Amazon competing with
Microsoft & IBM in cloud technology)
 New opportunities for building brands and loyal customer bases (e.g., Uber, Airbnb)

Lecture 3: Dimensions of Information Systems

Information System Ecosystem
Components:
 Input: Suppliers, Environment, Regulatory Agencies
 Organization: Information System Processing (Arranging, Analyzing)
 Output: Shareholders, Customers, Competitors
Three Key Dimensions of Information Systems
1. Organizations
Organizational Levels:
 Senior Management
 Middle Management (Knowledge Workers)
 Operational Management (Production and Service, Data Workers)
Business Functions:
 Sales and Marketing
 Human Resources
 Finance and Accounting
 Manufacturing and Production
Note: "Every business is different"
Case Study Example: Dabbawala business of food delivery systems in Mumbai - achieving 'Zero'
defect service through effective information systems
2. Management
Management Responsibilities:
 Set organizational strategy for responding to business challenges
 Act creatively in creating new products and services
 Occasionally recreate the organization (mergers, acquisitions, joint ventures, collaborations)
Discussion Topic: MIS issues related to recent merger of Public Sector Banks
3. Technology
Core Components:
 Computer hardware and software
 Data management technology
 Networking and telecommunications technology
 Networks, Internet, intranets, extranets, World Wide Web
IT Infrastructure: Provides the platform on which the system is built; information technology is
at the heart of information systems
Complementary Assets
Definition: Assets required to derive value from a primary investment
Examples:
Organizational Assets:
 Appropriate business model
 Efficient business processes
Managerial Assets:
 Incentives for management innovation
 Teamwork and collaborative work environments
Social Assets:
 Internet and telecommunications infrastructure
  Technology standards
Key Principle: Firms supporting technology investments with complementary asset investments
receive superior returns
Contemporary Approaches to Information Systems
Interdisciplinary Field Combining:
 Technical Aspects: Computer Science, Management Science, Operations Research
 Behavioral Aspects: Psychology, Social Science, Economics
The Three Categories of IT
IT Category Examples
Functional IT Spreadsheets, computer-aided design, statistical software
Network IT E-mail, instant messaging, wikis, blogs
Enterprise IT Enterprise resource planning, Customer resource management, Supply chain management

The IT Dialogue
Functional IT Questions:
 Will any new software enable workers to do jobs more efficiently?
 Are our functional technologies outdated? What has changed?
Network IT Questions:
 How do our people collaborate? What technologies are they using?
 How would we get broad feedback on important topics?
 How do we know what our people are working on and what they think are hot topics?
Enterprise IT Questions:
 In what ways are current processes not supporting business needs?
 Which processes need redesigning or extending to customers and suppliers?
 Are there important business activities, events, or trends we should monitor?
 Are data unavailable or scattered across systems, making information difficult to assemble?

Lecture 4: Information Management in the Digital World

Cloud Computing
Four Key Service Categories:
1. Infrastructure as a Service (IaaS): Data Centers
2. Platform as a Service (PaaS): Amazon Web Service, Azure
3. Software as a Service (SaaS): MS Office, Google Docs
4. Business Process as a Service (BPaaS): Sales Force.com, Workday.com
Cloud Computing Security Considerations:
 Changes in Control: Security, Privacy, Data and Application Protection, Identity
Protection, Threat Protection
 Deployment Models: Private cloud, Hybrid IT, Public cloud
Big Data and Analytics
Data Growth Statistics:
 2009: 800,000 petabytes
 2020: 35 zettabytes (44x growth over decade)
 90% of world's data generated in last two years
 60% of world's data is unstructured
 80% of CIOs cited "Business intelligence and analytics" for competitive enhancement
Business Analytics Needs:
 1 in 3 business leaders say they don't have access to needed information
 1 in 2 business leaders make decisions based on information they don't trust or don't have
 83% of CIOs need to better capture and understand information rapidly for swift decisions
Analytics Security:
Risks: Personally identifiable data, Credit card data, Health data, Intellectual property, Social
media, Sensor data
Opportunities: Larger diverse data sets, Faster analysis, Deeper insights, Predictive models
Mobile Technology
Mobile Growth and Security:
 2014: 7.3 billion cell phones exceeded 7 billion people on planet
 2017: Mobile downloads increased to 108 billion
 Mobile Malware: Infecting more than 11.6 million devices at any given time
 90% of top mobile apps have been hacked
Internet of Things (IoT)
IoT Ecosystem:
Connecting: Information + People + Things = Greatest resource for insightful action
IoT Applications:
 Manufacturing: Predictive maintenance, Responsive supply chains
 Consumer: Connected home, Connected car, Connected healthcare
 Urban: Connected cities, Connected retail
 Business: Connected asset management, Connected logistics, Connected factory
Industry 4.0
Definition: "Current trend of automation and data exchange in manufacturing technologies,
including cyber-physical systems, Internet of things, cloud computing, and cognitive computing,
creating the smart factory"
IoT and "Datafication":
 Rapid acceleration of Sensors, Actuators, and Devices
 Deluge of data from connected devices
 Datafication will have similar pervasive effect as electricity in 20th century
 Data availability will be taken for granted like electricity
Key Impacts of IoT on Industry
1. Automation: Connecting machines, sensors, actuators to computing systems enables large-
degree process automation (e.g., jet engines)
2. Integration: Integrating machine data with other sources (ERP, CRM systems) enhances
derived value
 3. Servitization: Combination of automation and integration helps organizations move from
product-centered to service-oriented business models
Manufacturing Analytics Integration
Enterprise Systems: ERP, PLM (Product Lifecycle Planning), SCM (Supply Chain Management)
Manufacturing Systems: Maintenance, Production Quality, Operations
Shop Floor Systems: Inventory, Operations
Data Flow: Sensors → Actuators → Valves → Big Data Analytics Engine → Feature Extraction
→ Anomaly Detection → Fault Diagnosis → Predictive Model
Social Media Impact
Social Media Statistics (2018 Internet Activity per 60 seconds):
 Facebook: 3.7 million logins, 30 billion pieces of content shared monthly
 Google: 3.7 million search queries
 Netflix: 266,000 hours watched
 YouTube: 4.3 million videos viewed
 Instagram: 174,000 scrolling activities
 Twitter: 481,000 tweets sent
 Snapchat: 2.4 million snaps created
 Email: 187 million emails sent
Social Technology Impact:
 Productivity: Raise interaction worker productivity by 20-25%
 Business Integration: 66% of top financially performing companies leverage social in
business processes
 Internal vs External: More companies use social internally than externally
 Security Concerns: Information exposed in new ways, mixing personal and corporate data
creates risk

Lecture 5: Class Discussions and Conclusion

Enterprise Resource Planning (ERP)
Value Chain Integration: ERP systems extend across the complete value chain from suppliers to
customers, integrating:
 Vehicle OEM Manufacturing
 Component Suppliers
 Transport Fleet Operators
 Finance systems across all entities
ERP Process Flow Example:
Customer Request → Sales Enquiry → Material Management → Finance → Credit
Management → Dynamic Availability Check → Cash Forecast
Globalization Challenges and Opportunities
Key Points:
 Internet drastically reduced costs of operating on global scale
 Increases in foreign trade and outsourcing
 Presents both challenges and opportunities
Case Studies: Airbnb, Uber, Booking.com - managing entire businesses using only Internet and
Information Systems without material assets
Customer and Supplier Intimacy Strategies
Customer Intimacy Techniques:
1. Return policies give confidence to customers
2. Loyalty bonuses
3. Offers and discounts
4. Data monetization: Customer data/browsing history/preferences sold to marketing agencies
5. Revenue per click: Every click generates revenue
Interactive Session: Mobile Pocket Office
Businesses Benefiting from Mobile Digital Devices:
 Point of Sales Order and Supply information at retailers
 Customer satisfaction surveys
 Marketing data collection/questionnaires
 Payment banks in rural areas
Conclusion
Four Main Actors in MIS:
1. Suppliers of hardware and software
2. Business firms
3. Managers and employees
4. Firm's environment (Customer satisfaction, legal, social and cultural context)
Socio-Technical Perspective:
Key Principle: System performance is optimized when both technology and organization
mutually adjust to one another until a satisfactory fit is obtained.
Technology ↔ Organization
Important Note: Business leaders (especially CIOs) must understand which technology best suits
their organization. "Following the Joneses" can lead to wrong investments.

References
1. "The World is Flat" by Thomas L. Friedman
2. "Management Information Systems: Managing the Digital Firm" by Kenneth C. Laudon
& Jane P. Laudon

Key Terms and Definitions

 MIS: Management Information Systems
 ERP: Enterprise Resource Planning
 CRM: Customer Relationship Management
 SCM: Supply Chain Management
 IoT: Internet of Things
 Big Data: Large, complex data sets requiring advanced analytics
 Cloud Computing: On-demand delivery of IT resources over the internet
 Digital Firm: Organization where significant business relationships and processes are
digitally enabled
 Complementary Assets: Assets required to derive value from primary investment
  Industry 4.0: Fourth industrial revolution characterized by automation and data exchange

These notes provide a comprehensive overview of Week 1 MIS lectures covering fundamental
concepts, strategic objectives, system dimensions, and modern technological trends in information
systems management.