The Information Age in Which

You Live:
Changing the Face of
Business

IS YOUR SOCIAL SECURITY

NUMBER WORTH $98?

Information technology has greatly

accelerated both the good and the bad
IT can be used to increase profit, reduce
costs, increase service quality, and benefit
society
IT can also be used to steal your personal
information, commit fraudulent acts, etc
Many sites on the Web are right now
selling your personal information
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What Your Personal Information

Is Worth?

$490 credit card number and PIN

$147 drivers license number

$147 birth certificate

$6 PayPal logon and password

$78-$294 billing data including account

number, address, birth date, etc

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Questions
1.

2.

3.

Have you, a friend, or a family member

been a victim of identity theft? If so, tell the
story to your class.

How often do you buy your credit report?

Did you know you get one for free annually?
Is technology good or bad?

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Introduction

digital age
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Introduction

the cohort of people born in

the mid-to-late 1980s and
very early 1990s, was born
into a digital age
unimaginable
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Introduction

terms
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Introduction

The reach of digital

technologies is vast
and wide.

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What is MIS

is both a business discipline

that deals with the use of
information technology (IT)or
computers, computer
technology, or simply
technologyand an academic fi
eld of study.
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Introduction

Businesses are different; they

carefully scrutinize
their technology purchases,
seeking to find and justify a
competitive advantage and a
return on a big investment.
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Businesses ask questions such as:

1. Can this technology help streamline and lower the cost of
our business processes while not sacrificing the quality we
deliver to our customers?
2. Can this technology enable us to reach larger markets of
customers, understand our customers better so we can
deliver more tailored products and services to them, and/or
help us design and develop products that are better than
those of
our competitors?
3. Can this technology enable us to innovate our business
operations and move into
completely new markets?
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business strategy drives

technology
decisions, not the
reverse.
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The steps are as follows:

1. Assess the state of competition and
industry pressures affecting your organization.
2. Determine business strategies critical to
successfully addressing those
competitive and industry pressures.
3. Identify important business processes that
support your chosen business strategies.
4. Finally, align technology tools with those
important business processes.
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The steps are as follows:

1. Assess the state of competition and
industry pressures affecting your organization.
2. Determine business strategies critical to
successfully addressing those
competitive and industry pressures.
3. Identify important business processes that
support your chosen business strategies.
4. Finally, align technology tools with those
important business processes.
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1-15

INTRODUCTION

Management information
systems (MIS) helping people
perform all tasks related to
information processing and
management. 3 key resources:
1.
2.
3.

People
Information
Technology

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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
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MIS RESOURCE #1: INFORMATION

Business intelligence collective information that supports important,

strategic decision making
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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

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MIS RESOURCE #3: INFORMATION

TECHNOLOGY

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FINANCIAL IMPACT OF
INFORMATION TECHNOLOGY

IT can definitely impact break-even

analysis

Fixed costs costs you incur even if you

dont sell anything
Variable costs costs you incur when
you sell something (COGS)
Revenue how much you sell one unit
for

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FINANCIAL IMPACT OF
INFORMATION TECHNOLOGY
Reduce Fixed Costs

Reduce Variable Costs

Increase Revenue
Recommendation Engines
Long-Tail Economics
Many others
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INDUSTRY IMPACT OF
INFORMATION TECHNOLOGY
Porters Five Forces Model helps business people understand the relative
attractiveness of an industry and the industrys competitive pressures.

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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

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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

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STRATEGY IMPACT OF
INFORMATION TECHNOLOGY

Porter identified 3
generic business
strategies for
beating the
competition
1.

2.
3.

Overall cost
leadership
Differentiation
Focus
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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
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RGT Framework
How will you allocate IT dollars to

Run optimizing execution of existing processes

Grow increasing market share, products, and service
offerings
Transform innovating business processes, products,
and/or services

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Porter, Top Line/Bottom Line,

RGT

Run = overall cost leadership = bottom line

Grow = focus and differentiation = top line

Transform = (new) differentiation = top line (when the

focus is innovation)

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VALUE-CHAIN ANALYSIS

Value-chain analysis systematic approach to

assessing and improving the value of business
processes

Value chain chain or series of business processes,

each of which adds value to your organizations
products or services

Business process standardized set of activities that

accomplishes a specific task

Two types of processes: Primary and Support

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VALUE-CHAIN ANALYSIS

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VALUE-CHAIN ANALYSIS
Primary value process takes in raw materials and

makes, delivers, markets and sells, and services your

products and services

Support value process supports the primary value

processes

Ask customers which processes add value and which

processes reduce value

Focus IT appropriately

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VALUE-CHAIN ANALYSIS

VALUE-ADDED PROCESSES
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VALUE-CHAIN ANALYSIS

VALUE-REDUCING PROCESSES
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