CHAPTER 2

Information Systems: Concepts and Management

Introduction to Information Systems, Second Edition by Kelly Rainer and Efraim Turban

CHAPTER OUTLINE
2.1 Types of Information Systems 2.2 Competitive Advantage and Strategic Information Systems 2.3 Why Are Information Systems Important to Organizations and Society? 2.4 Managing Information Resources

LEARNING OBJECTIVES
Describe the components of computerbased information systems. Describe the various types of information systems by breadth of support. Identify the major information systems that support each organizational level. Describe strategic information systems (SISs), and explain their advantages.

Learning Objectives (continued)

Describe porters competitive forces model and his value chain model, and explain how IT helps companies improve their competitive positions. Describe five strategies that companies can use to achieve competitive advantage in their industries. Describe how information resources are managed, and discuss the roles of the information systems department and the end users.

2.1 Types of Information Systems

Computer-based information systems (CBIS) use computer technology to perform some or all of their tasks and are composed of:
Hardware Software A Database A Network Procedures People

Application Programs
An application program is a computer program designed to support a specific task, a business process or another application program.

Breadth of Support of Information Systems

Functional area information systems Enterprise resource planning systems Transaction processing systems Interorganizational information systems

Information Systems Support for Organization Employees

Office automation systems Functional area information systems Business intelligence systems Expert Systems Dashboards

2.2 Competitive Advantage and Strategic Information Systems

Competitive Advantage Strategic Information Systems (SIS)

Porters Competitive Forces Model

The best-known framework for analyzing competitiveness is Michael Porters competitive forces model (Porter, 1985).

Porters Competitive Forces Model

Threat of entry of new competitors is high when it is easy to enter a market and low when significant barriers to entry exist. A barrier to entry is a product or service feature that customers expect from organizations in a certain industry. For most organizations, the Internet increases the threat that new competitors will enter a market.

Porters Competitive Forces Model

The bargaining power of suppliers is high when buyers have few choices and low when buyers have many choices. Internet impact is mixed. Buyers can find alternative suppliers and compare prices more easily, reducing power of suppliers. On the other hand, as companies use the Internet to integrate their supply chains, suppliers can lock in customers.

Porters Competitive Forces Model

The bargaining power of buyers is high when buyers have many choices and low when buyers have few choices. Internet increases buyers access to information, increasing buyer power. Internet reduces switching costs, which are the costs, in money and time, to buy elsewhere. This also increases buyer power.

Porters Competitive Forces Model

The threat of substitute products or services is high when there are many substitutes for an organizations products or services and low where there are few substitutes. Information-based industries are in the greatest danger from this threat (e.g., music, books, software). The Internet can convey digital information quickly and efficiently.

Porters Competitive Forces Model

The rivalry among firms in an industry is high when there is fierce competition and low when there is not.

Porters Value Chain Model

This model identifies specific activities where organizations can use competitive strategies for greatest impact.
Primary activities Support activities

2.3 Why are Information Systems Important to Organizations & Society

IT will reduce the number of middle managers. IT will change the managers job. IT impacts employees at work. IT provides quality-of-life improvements.

Managing Information Resources

Which IT Resources are Managed and By Whom? The Role of the IS Department

Traditional Major IS Functions

Managing systems development and systems project management Managing computer operations Staffing, training, developing IS skills Providing technical services Infrastructure planning, development, control

New (Consultative) IS Functions

Initiating and designing strategic information systems Incorporating the Internet and e-commerce into the business Managing system integration Educating non-IS managers about IT Educating IS staff about the business Supporting end-user computing Partnering with executives Managing outsourcing Innovate Ally with vendors and IS departments in other organizations

Supporting End Users

One form of end-user support is the help desk, where IS staffers help users troubleshoot problems with their systems.

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