Management Info System

Using MIS

10th Edition

Chapter 1

The Importance of MIS

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“But Today, They’re Not Enough.”

Jennifer Lacks Skills Falcon Security Needs:

Abstract reasoning skills.

Systems Thinking Skills.

Collaboration Skills.

Experimentation Skills.

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What’s not good enough?

What should Jennifer have done differently?

To what extent are the four skills required in your education so far?

How do you feel about working with ambiguity?

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What Do Employers Want?

Self starter, Don’t wait to be told what to do.

Team worker

Develops ideas with others.

Asks questions.

Pulls more than their own weight.

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Study Questions

Q1-1 Why is Introduction to MIS the most important class in the business school?

Q1-2 How will MIS affect me?

Q1-3 What is MIS?

Q1-4 How can you use the five-component model?

Q1-5 What is information?

Q1-6 What are necessary data characteristics?

Q1-7 2027?

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Chapter Preview

It begins by discussing the key skills that students need and explains why this course is the best course for teaching those key skills. The discussion of how important this class will be to your career is followed by discussions of fundamental concepts. The chapter wraps up with some practice on one of the key skills students need to learn.

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The Digital Revolution

Q1-1 Why is Introduction to MIS the most important class in the business school?

Technology fundamentally changing business.

Information Age

Production, distribution, control of information primary economic drivers.

Digital Revolution

From mechanical/analog devices to digital devices.

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What happens when those costs are essentially zero?

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Understanding the Forces Pushing the Evolution of New Digital Devices

Q1-1 Why is Introduction to MIS the most important class in the business school?

Bell’s Law

New class of computers establishes a new industry each decade.

New platforms, programming environments, industries, networks, and information systems.

Understand how next digital evolution will affect businesses.

What an industry does and how it does it will change.

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Change is a given factor.

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Computer Price/Performance Ratio Historical Trend

Figure 1-1 Computer Price / Performance Ratio Decreases

Q1-1 Why is Introduction to MIS the most important class in the business school?

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Moore’s Law: “The number of transistors per square inch on an integrated chip doubles every 18 months.”

You needn’t care how fast of a computer your company can buy for $100.

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Metcalfe’s Law

Figure 1-2 Increasing Value of Networks

Network value equal to square of number of users connected to it. (V=U2)

Google, Amazon, eBay exist due to large numbers of Internet users.

Q1-1 Why is Introduction to MIS the most important class in the business school?

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Will these be the biggest companies in 2027? Or will new ones emerge?

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Fundamental Forces Changing Technology

Q1-1 Why is Introduction to MIS the most important class in the business school?

LawMeaningImplications
Moore’s LawThe number of transistors per square inch on an integrated chip doubles every 18 months.Computers are getting exponentially faster. The cost of data processing is approaching zero.
Metcalfe’s LawThe value of a network is equal to the square of the number of users connected to it.More digital devices are being connected together. The value of digital and social networks is increasing exponentially.
Nielsen’s LawNetwork connection speeds for high-end users will increase by 50 percent per year.Network speed is increasing. Higher speeds enable new products, platforms, and companies.
Kryder’s LawThe storage density on magnetic disks is increasing at an exponential rate.Storage capacity is increasing exponentially. The cost of storing data is approaching zero.

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Test their connection speed here. http://www.geeksquad.com/do-it-yourself/tools/test-your-broadband-speed.aspx

Zipf’s Law is a more accurate, though less easily understood, way of explaining how the value of a network increases as additional network nodes are added. See Briscoe, Odlyzko, and Tilly’s 2006 article “Metcalfe’s Law Is Wrong” for a better explanation. http://spectrum.ieee.org/computing/networks/metcalfes-law-is-wrong.

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Price of Storage Capacity per GB

Figure 1-4 Price of Storage Capacity per GB

Q1-1 Why is Introduction to MIS the most important class in the business school?

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Moore’s Law: “The number of transistors per square inch on an integrated chip doubles every 18 months.”

You needn’t care how fast of a computer your company can buy for $100.

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This Is the Most Important Class in the School of Business Because You Will Learn:

Q1-1 Why is Introduction to MIS the most important class in the business school?

How technology fundamentally changes businesses.

Why executives try to find ways to use new technology to create a sustainable competitive advantage.

Assess, evaluate, apply emerging information technology to business.

Help you attain knowledge needed by future business professionals.

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Technological Change is Accelerating

Q1-2 How will MIS affect me?

Bell’s Law

Today’s highly successful business could be bankrupt quickly because technology changed and it didn’t.

Example: Blockbuster

In 2004 Blockbuster had $5.9B in revenues

In 2010 Blockbuster filed for bankruptcy

High-speed network connections and streaming video changed the competitive landscape

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Changes in technology will threaten your job security and provide opportunities, if you have the skills and desire to use them.

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How Can I Attain Job Security?

Q1-2 How will MIS affect me?

Moore’s Law, Metcalfe’s Law, and Kryder’s Law

Driving data processing, storage, communications costs to essentially zero.

Any routine skill can, and will, be outsourced to lowest bidder.

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Can today’s non-routine skills become routine in a few years? Identify some non-routine job skills. How could they be threatened?

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What Skills Will Be Marketable During Your Career?

Q1-2 How will MIS affect me?

Rapid technological change and increased international competition:

Requires skills and ability to adapt.

Favors people with strong non-routine cognitive skills.

Message: Develop strong non-routine cognitive skills.

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What Is a Marketable Skill?

Figure 1-5 Examples of Critical Skills for Nonroutine Cognition

SkillExampleJennifer’s Problem at Falcon Security
Abstract ReasoningConstruct a model or representation.Hesitancy and uncertainty when conceptualizing a method for identifying 3D printable drone parts.
Systems ThinkingModel system components and show how components’ inputs and outputs relate to one another.Inability to model Falcon Security’s operational needs.
CollaborationDevelop ideas and plans with others. Provide and receive critical feedback.Unwilling to work with others on work-in-progress.
Ability to ExperimentCreate and test promising new alternatives, consistent with available resources.Fear of failure prohibited discussion of new ideas.

Q1-2 How will MIS affect me?

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Rapid technological change and increased international competition place spotlight on workforce skills and preparation, particularly ability to adapt to changing technology and shifting demand.

How are abstract thinking and system thinking related?

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How Can Intro to MIS Help You Learn Non-Routine Skills?

Q1-2 How will MIS affect me?

Abstract Reason

Ability to make and manipulate models.

Learn to use and construct abstract models.

Ch. 1: Five components of an IS model.

Ch. 5: How to create data models.

Ch. 10: How to make process models.

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Abstract thinking involves using models. One or more models in every course topic and book chapter.

The model example is from Wikipedia.org https://en.wikipedia.org/wiki/Data_model#/media/File:Data_modeling_context.svg.

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How Can Intro to MIS Help You Learn Non-Routine Skills? (cont’d)

Q1-2 How will MIS affect me?

Systems Thinking

Ability to model system components, connect inputs and outputs among components to reflect structure and dynamics.

Ability to discuss, illustrate, critique systems; compare alternative systems; apply different systems to different situations.

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These skills are essential for business professionals.

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How Can Intro to MIS Help You Learn Non-Routine Skills? (cont’d)

Q1-2 How will MIS affect me?

Collaboration

People working together to achieve a common goal, result, or work product.

Ch. 2 discusses collaboration skills and illustrates several collaboration information systems.

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Every chapter of this book includes collaboration exercises that you may be assigned in class or as homework.

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How Can Intro to MIS Help You Learn Non-Routine Skills? (cont’d)

Q1-2 How will MIS affect me?

Ability to Experiment

Make reasoned analysis of an opportunity; develop and evaluate possible solutions.

“I’ve never done this before.”

“I don’t know how to do it.”

“But will it work?”

“Is it too weird for the market?”

Fear of failure paralyzes many good people and ideas

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Use features and functions of Microsoft Excel, Access not used before. Collaborate using Microsoft SharePoint, Google Docs and Spreadsheets, or other collaboration tools.

Think about Falcon Security’s 3D printing problem. What are risks? Should they proceed?

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Jobs

Q1-2 How will MIS affect me?

69% of college graduates need additional training or education.

46% working in jobs not requiring their degree, underemployed.

Better success for students with courses related to information systems.

Tradable job

Job not dependent on particular location, can be offshore outsourced.

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One in two recent college graduates either unemployed or underemployed, but, not in all job categories.

Will these trends change over the next 20 years?

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Job Growth By Sector Over the Past Twenty Years

Figure 1-6 Growth of Jobs by Sector from 1989 to 2009

Q1-2 How will MIS affect me?

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This figure shows tradable jobs; it puts an end to the myth that all the good computer jobs have gone overseas.

Notice the rapid growth in Management, Scientific, and Technical Consulting from 2000-2009.

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BLS Occupational Outlook 2014-2024

Figure 1-7 Bureau of Labor Statistics Occupational Outlook 2014–2024

  2012 Median Pay2014 Median PayJob Growth (%) 2014-24Job Growth (N) 2014-24
Business Managers    
 Marketing Managers$ 115,750$ 123,4509%19,700
 Information Systems Managers$ 120,950$ 127,64015%53,700
 Financial Managers$ 109,740$ 115,3207%37,700
 Human Resources Managers$ 99,720$ 102,7809%10,800
 Sales Managers$ 105,260$ 110,6605%19,000
Computer and Information Technology  
 Computer Network Architects$ 91,000$ 98,4309%12,700
 Computer Systems Analysts$ 79,680$ 82,71021%118,600
 Database Administrators$ 118,700$ 80,28011%13,400
 Information Security Analysts$ 87,170$ 88,89018%14,800
 Network and Systems Admin.$ 72,560$ 75,7908%30,200
 Software Developers$ 93,350$ 97,99017%186,600
 Web Developers$ 62,500$ 63,49027%39,500
Business Occupations    
 Accountants and Auditors$ 63,550$ 65,94011%142,400
 Financial Analysts$ 76,950$ 78,62012%32,300
 Management Analysts$ 78,600$ 80,88014%103,400
 Market Research Analysts$ 60,300$ 61,29019%92,300
 Logisticians$ 72,780$ 73,8702%2,500
 Human Resources Specialists$ 55,640$ 57,4205%22,000

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U.S. Bureau of Labor Statistics recent job projections for business managers, computer and information technology, and other business occupations for the years 2014 to 2024. Growth rates of all information systems–related jobs are above the average for all occupations.

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Bottom Line of MIS Course

Q1-2 How will MIS affect me?

Most important course in business school because:

Gives background needed to assess, evaluate, and apply emerging information systems technology to business.

Gives marketable skills by helping you learn abstraction, systems thinking, collaboration, and experimentation.

Makes you aware of well-paying, high demand MIS-related jobs.

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Management Information Systems

Q1-3 What is MIS?

Key elements

Management and use

Information systems

Strategies

Goal of MIS:

Managing IS to achieve business strategies.

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Management Information Systems (cont’d)

Q1-3 What is MIS?

Management and use to:

Develop, maintain, adapt by:

Creating an information system that meets your needs, take an active role in system’s development. Why?

Business professionals using cognitive skills to understand business needs and requirements.

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Components of an Information System?

Figure 1-8 Five Components of an Information System

Q1-3 What is MIS?

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Identify IS components of your university’s online registration system.

This framework appears throughout the textbook.

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Difference Between IT and IS

Q1-3 What is MIS?

Information technology (IT)

Products

Methods

Inventions

Standards

IT drives development of new IS.

IT components = Hardware + Software + Data

IS = IT + Procedures + People

IT

Procedures

People

IS

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Development and Use of Information Systems

Q1-3 What is MIS?

Business professionals need to:

Take active role to ensure systems meet their needs.

Understand how IS constructed.

Consider users’ needs during development.

Learn how to use IS.

Remember ancillary requirements (security, backups).

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Achieving Strategies

Q1-3 What is MIS?

Information systems exist to help people achieve business strategies.

“What is the purpose of our Facebook page?”

“What is it going to do for us?”

“What is our policy for employees’ contributions?”

“What should we do about critical customer reviews?”

“Are the costs of maintaining the page sufficiently offset by the benefits?”

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Chapter 3 addresses the relationship between information systems and strategy in more depth.

Chapter 8 addresses social media and strategy specifically.

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The Five-Component Model

Q1-4 How can you use the five-component model?

Q1-4 How can you use the five-component model?

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Automation moves routine jobs to the computer side.

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Characteristics of the Five Components

Q1-4 How can you use the five-component model?

Most Important Component – YOU!

Your cognitive skills determine quality of your thinking, ability to conceive information from data.

You add value to information and information systems.

Only humans produce information.

All components must work together.

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It’s only data until you or some other human takes it into their mind and are informed by it.

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Why Is the Difference Between IT and IS Important to You?

Q1-4 How can you use the five-component model?

Avoid common mistake: Cannot buy an IS.

Can buy, rent, lease hardware, software, and databases, and predesigned procedures.

People execute procedures to employ new IT.

New systems require training, overcoming employee resistance, and managing employees as they use new system.

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Use example of an organization developing a Facebook page.

Facebook provides hardware, software, database structures, and standard procedures.

You provide content, custom procedures, training, and managing your employees.

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Why Is the Difference Between IT and IS Important to You? (cont’d)

Q1-4 How can you use the five-component model?

High-tech vs. low-tech information systems.

Consider amount of work being moved from people to computers.

Understanding scope of new information systems.

Assess how big an investment new technology represents.

Components ordered by difficulty and disruption.

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Information systems differ in the amount of work moved from the human side (people and procedures) to the computer side (hardware and programs). When considering different information systems alternatives, it’s helpful to consider low-tech versus high-tech alternatives in light of the amount of work being moved from people to computers.

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A is for Alphabet

So What?

The Internet has enabled innovation and changed our lives.

Google is one of the largest publicly traded companies in the world with a diverse portfolio of projects.

As of August 10, 2015, it was a subsidiary of an overarching company named Alphabet Inc.

Page and Brin manage the overall strategy, but not daily operations of each company.

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A is for Alphabet (cont’d)

So What?

The company was restructured to:

Retain top talent in a highly competitive industry.

Decrease bureaucratic climate.

Improve internal career trajectories of industry superstars.

Make individual companies more nimble, efficient, and autonomous.

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Defining Information

Q1-5 What is information?

Definitions vary:

Knowledge derived from data.

Meaningful context.

Processed data, or data processed by summing, ordering, averaging, grouping, comparing, or similar operations.

“A difference that makes a difference.”

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Data are recorded facts or figures.

Mary Jones earns $50.00 per hour is data. Average hourly wage of all the graphic designers is $60.00 per hour is information. Explain.

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Amazon.com Stock Price and Net Income

Figure 1-9 Amazon.com Stock Price and Net Income

Q1-5 What is information?

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Does this graph contain information?

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Where Is Information?

Q1-5 What is information?

Graph is not information.

It’s data people perceive and use to conceive information.

Ability to conceive information determined by cognitive skills.

People perceive different information from same data.

You add value by conceiving information from data.

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Information is created in your mind, which explains why you are the most important part of any information system you use.

Data is just the data; the information you conceive from it is the value that you add to the information system.

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Characteristics of Data

Q1-6 What are necessary data characteristics?

Accurate

Timely

Relevant

To context

To subject

Just sufficient

Worth its cost

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Do not rely on data just because it appears in the context of a Web page, a well-formatted report, or a fancy query. It is sometimes easy to be misled by data delivered with beautiful, active graphics. Do not be misled. When you use a new information system, be sceptical. Cross-check the data you receive.

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Ethics and Professional Responsibility

Figure 1-3 Measuring growth of units sold using different axis values

Ethics Guide

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Use Kant’s categorical imperative, to explore ethical issues concerning deceptive data displays.

Practice applying the difference between data and information.

Note the graph on the left has no quantitative labels on the vertical axis; the vertical scale on the middle graph ranges only 20 units (20/6000=0.003%) which exaggerates insignificant variations; the scale of the last graph conceals variation in the data.

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Ethics and Professional Responsibility (cont’d)

Ethics Guide

Immanuel Kant

Categorical imperative

One should behave only in a way that one would want the behavior to be a universal law.

Are you willing to publish your behavior to the world?

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How do you want other people to behave?

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Ethics and Professional Responsibility (cont’d)

Ethics Guide

Necessity to act in accordance with categorical imperative.

Perfect duty – behavior that must always be met.

Imperfect duty – a praiseworthy action, but not required.

Giving to charity, developing your business skills and abilities.

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Stealing cannot be a universal law. Lying is not consistent with the categorical imperative because if everyone lies, words are useless.

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Imperfect Duty of Business Professionals

Ethics Guide: Ethics and Professional Responsibility

Imperfect duties

Cultivating your talent is a professional responsibility.

Obtaining skills necessary to accomplish your job.

Continuing to develop business skills and abilities throughout your career.

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MIS in 2027

Q1-7 2027?

Most computers won’t look like computers.

Smartphones

1Gbps network connection,

1 Exabyte storage,

Teraflop+ processing power,

Connect to any electrical device,

Store/stream every song and movie ever made to any device,

Battery life over a month on a single charge.

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Everyday items now have embedded computers to collect data and interact over the Internet.

Look for opportunities to include networked computers into products you’re making, marketing, or selling.

Who will be the big winners? Students. Publishers will sell innovative content over the Kindles-to-be that could eliminate used books. Students will pay $40 instead of $140 for a textbook, while book resellers will lose.

If you can learn on your own, why go to a traditional campus or classroom when you could learn from an online class for $3,500 per year?

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Technology in 2027 (cont’d)

Q1-7 2027?

BYOD common.

Comprehensive bio-monitoring devices at home, linked to health care systems.

Widespread use of Google Glass or Microsoft’s HoloLens.

More people work at home or wherever.

Knowledge and use of business information systems will be more important, not less.

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What impact will these have on new products and services? Structure of organizations? Nature of work and education? Personal privacy? Personal relationships?

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Passwords and Password Etiquette

Security Guide

10+ characters.

Does not contain your user name, real name, or company name.

Does not contain a complete dictionary word in any language.

Different from previous passwords used.

Contains both upper- and lowercase letters, numbers, and special characters (such as ˜ ! @; # $ % ^; &; * ( ) _ +; – =; { } | [ ] \ : “ ; ’ <; >;? , . /)

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One technique for creating memorable, strong passwords is to base them on the first letter of the words in a phrase.

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Passwords and Password Etiquette (cont’d)

Security Guide

Never write down your password.

Never ask someone for their password.

Never give your password to someone.

“do-si-do” move—move away so another person can enter password privately.

Common professional practice.

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You are a protector of your employer’s information system, customer, supplier, and your personal data.

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Five-Component Careers

Career Guide

 HardwareSoftwareDataProceduresPeople
Sales & MarketingVendors (IBM, Cisco, etc.)Vendors (Microsoft, Oracle, etc.)Vendors (Acxiom, Google, etc.)Vendors (SAP, Infor, Oracle)Recruiters (Robert Half, Lucas Group)
SupportVendors Internal MISVendors Internal MISDatabase administration SecurityVendors and internal customer supportCustomer support Training
DevelopmentComputer engineering Internal MISApplication programmer Quality test EngineerData modeler Database designBusiness process management Process reengineeringTraining Internal MIS recruiting
ManagementInternal MISInternal MISData administrationProject managementTechnical management
ConsultingProject management, development, pre- and postsale support

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GOALS

Motivate students for study in this course and in others by reminding them of the need to prepare for jobs now. Employment will not necessarily be easy.

Broaden students’ perspectives about MIS careers. Many exciting jobs other than programmer or hardware specialist exist.

Make students aware that a lot of interesting jobs that require MIS skills are not necessarily “computer” jobs. Professional sales is one, for example.

Reinforce the five-component model and show students another way they can use it to guide their thinking.

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Active Review

Q1-1 Why is Introduction to MIS the most important class in the business school?

Q1-2 How will MIS affect me?

Q1-3 What is MIS?

Q1-4 How can you use the five-component model?

Q1-5 What is information?

Q1-6 What are necessary data characteristics?

Q1-7 2027?

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zulily

Case Study 1

What is the business model?

Flash sales to mothers:

Children’s clothes, toys, women’s clothes, accessories, and décor items.

IT provides entertaining shopping experience, name brand goods, unique and difficult-to-find off-brands, at substantial discounts.

45% of sales over mobile devices.

Curated sales.

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Point of case: You should learn to assess, evaluate, and apply emerging information technology to business.

Curated sales are items specifically selected and grouped by its shopping experts that are targeted at women.

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zulily (cont’d)

Figure 1-11 zulily Merchandise Variety

Courtesy of zulily Inc. Used by permission

Case Study 1

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zulily (cont’d)

Case Study 1

20102011201220132014
Number of active customers (thousands)15779115803,2004,900
Revenue (millions)$18$143$331$696$1,200
Sales per active customer$117$180$210$218$245

Figure 1-13 zulily Performance

Courtesy of zulily Inc. Used by permission

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Effects of curated sales

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zulily (cont’d)

Case Study 1

How did they do it?

Buyers identify goods to be sold, negotiate with vendors.

Photographs sample items in-house, write ad copy.

Group items for 3-day sales events.

After event closes, zulily orders items from vendor, receives, packages, and ships to customers (maintains no inventory).

Vulnerable to vendor’s errors and mistakes.

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zulily (cont’d)

Case Study 1

Use of Technology at zulily

“Continual innovation through investment in technology is core to our business.”

Internet, mobile technology compatibility.

Developed a proprietary technology platform to handle. Enormous spikes in web processing demand.

Extensive data collection and analytics capabilities.

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zulily (cont’d)

Case Study 1

Growth-management problems

Must effectively integrate, develop and motivate a large number of new employees, while maintaining corporate culture. Continue to make substantial investments to expand merchandising and technology personnel.

Need to hire mid-level managers.

Finding and retaining merchandising and technology personnel difficult.

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zulily (cont’d)

Case Study 1

Lessons Learned

Technology zulily uses not ground breaking.

Developed innovative application of information systems technology.

Applied it to a business opportunity.

Managerial skill to develop that idea.

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Use questions at end of case.

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10e 2017

David M. Kroenke Randall J. Boyle

Using MIS