Purposes of Information Systems

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Purposes of Information Systems
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Why Firms Seek Competitive Advantage (Porters
Five-Force Model)

• Rivalry among existing competitors
• Threat of new entrants
• Threat of substitute product and services
• Bargaining power of buyers
• Bargaining power of suppliers

3
Information Systems for Competitive Advantage

• Businesses continually seek to establish
  competitive advantage in the marketplace.
• There are eight principles
• The first three principles concern products.
• The second three principles concern the creation
  of barriers.
• The last two principles concern establishing
  alliances and reducing costs.

4
Organizational Change

• Organizational change deals with how
  organizations plan for, implement and handle
  change. Overcoming resistance to change can be
  the hardest part of bringing information systems
  into a business. Too many computer systems and
  new technologies have failed because managers and
  employees were not prepared for change.
• A change model identifies the phases of change
  and the best way to implement it
• Unfreezing is the process of removing old habits
  and creating a climate receptive to change
• Moving is the process of learning new work
  methods, behaviors and systems
• Refreezing involves reinforcing changes to make
  the new process second nature, accepted and part
  of the job

5
Information Systems for Problem Solving

• Information systems can be used to solve
  problems.
• Problem definition
• A problem is a perceived difference between what
  is and what is not.
• A problem is a perception.
• A good problem definition defines the differences
  between what is and what ought to be by
  describing both the current and desired
  situations.
• Different problem definitions require the
  development of different information systems.
• All personnel in the organization must have a
  clear understanding of which definition of the
  problem the information system will address.

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Decision Making and Problem Solving

• Problem solving is the most critical activity a
  business organization undertakes. Problem solving
  begins with decision making.
• In the intelligence stage, potential problems and
  /or opportunities are identified and defined
• In the design stage, alternative solutions to the
  problem are developed
• In the choice stage, a course of action is
  selected
• In the implementation stage, action is taken to
  put the solution into effect
• In the monitoring stage, the implementation of
  the solution is evaluated to determine if the
  anticipated results were achieved and modify the
  process

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The Decision Process

• Three decision processes (method by which a
  decision is to be made) are structured,
  semi-structured, and unstructured.
• Structured decision process is one for which
  there is an understood and accepted method for
  making the decision.
• Semi-structured process is one for part of which
  there is no accepted method for making the
  decision.
• Unstructured process is one for which there is no
  agreed on decision making process.
• The terms structured and unstructured refers to
  the decision process-not the underlying subject.

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Relationship of Decision Level and Decision Type
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Optimization, Satisficing, and Heuristic

• Optimizing is finding the best solution and best
  fit for problems that can be modeled
  mathematically with a low degree of estimation
  risk. For example, find how many iPads to produce
  to meet a profit goal.
• Satisficing is finding a good, but not
  necessarily the best, solution. Satisficing does
  not look at all possible solutions, but at those
  that are likely to give good results. Satisficing
  is a practical decision method because it is
  sometimes too expensive to analyze every
  alternative to get the best solution. For
  example, when you have to select a location for a
  new plant.
• Heuristics are guidelines or procedures that
  usually find a good solution by using rules of
  thumb.

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Different Types of Information Systems for
Different Types of Decisions

• Automated information systems are those by which
  the computer hardware and program components do
  most of the work.
• Humans start the programs and use the results.
• Augmentation information systems are those in
  which humans do the bulk of the work.
• These systems augment, support, or supplement the
  work done by People (email, instant messaging,
  video-conferencing, etc) to aid in decision
  making.

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How Decision Level, Decision Type and IS Type
Are Related
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Information Systems for Decision Making

• Decision making in organizations is varied and
  complex.
• Decisions occur at three levels in organizations
  (decision levels)
• Operational decisions concern day-to-day
  activities.
• Information systems that support operational
  decision making are called transaction processing
  systems (TPS).
• Managerial decisions concern the allocation and
  utilization of resources.
• Information systems that support managerial
  decision making are called management information
  systems (MIS).
• Strategic decision making concern broader-scope
  organizational issues.
• Information systems that support strategic
  decision making are called executive information
  systems (EIS).

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Knowledge Management System

• A knowledge management system (KMS) is an
  information system for storing and retrieving
  organizational knowledge.This knowledge can be
  in the form of data, documents, or employee
  know-how.
• KMS goal is to make the organization knowledge
  available to
• Employees
• Vendors
• Customers
• Investors
• Press and who else who needs the knowledge

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Summary

• Organizations develop and use information systems
  to gain competitive advantage, to solve problems,
  and to assist in decision making
• Eight principles of competitive advantage.
• A problem is a perceived difference between what
  is and what ought to be.
• Decisions vary according to whether a structured
  or unstructured process is used to make them.
• Automated information systems are those in which
  the computer and program side of the five
  components do most of the work.
• Augmentation information systems are those in
  which humans do most of the work.
• Another way to consider information systems and
  decision making is to consider the steps of the
  decision process.
• Different types of information systems are used
  for different steps of the decision process.
• Decisions can be made at the operational (TPS),
  managerial (MIS), and strategic (EIS) levels.

15
Video

• Interview Question According to your survey, you
  like sociable environments, but will
  follow-through on tasks that are important. How
  do you prioritize and keep on track toward your
  objectives? How do you manage procrastination and
  talkative co-workers?
• How to evaluate the responses to this question?
  PeopleKeys will compare the applicants response
  to a benchmark set by the actual job description
  - then once the interview process is complete -
  PeopleKeys will tell you which applicant(s) are
  best suited for the position.
• PeopleKeys is a tool for understanding the
  strengths and weaknesses of individuals based on
  personality traits that can be used for hiring,
  training, retention, and much more.

16
Guides

• Ethics Guide
• Do you see evidence of a digital divide in your
  campus, hometown, neighborhood? What solutions do
  you offer to reduce the digital divide?
• Problem Solving Guide
• What is the difference between egocentric and
  empathetic thinking?
• How does empathetic thinking relate to problem
  definition?
• In business, is empathetic thinking smart?
• Reflections Guide
• Summarize the efforts you have taken to build an
  employment record that will lead to job offers
  after graduation.
• Describe one way in which you have a competitive
  advantage over your classmates.
• How can you use student alliances to obtain a job?