B U SINES S DRIV E N I N F O R M AT I O N
SYS T E M S
REVIEW QUESTIONS
1. What is data and why is it important to a business?
Data are raw facts that describe the characteriscs of an event or object. Before the
2. How can a manager turn data into informaon?
Informaon is data converted into a meaningful and useful context. Having the right
3. What is the relaonship between data, informaon, business intelligence, and
knowledge?
Data is converted into informaon, business intelligence, and knowledge. Using data,
4. Why is it important for a company to operate cross-funconally?
Each department performs its own acvies. Although each department has its own
focus and data, none can work independently if the company is to operate as a whole. It
is easy to see how a business decision made by one department can a0ect other
5. Why would a company want to have a CIO, CPO, and CSO?
A chief informaon o9cer is responsible for (1) overseeing all uses of MIS and (2)
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6. Explain MIS and the role it plays in a company and global business.
Management informaon systems (MIS) is a business funcon, like accounng and
human resources, which moves informaon about people, products, and processes
across the company to facilitate decision making and problem solving. MIS incorporates
7. Do you agree that MIS is essenal for businesses operang in the informaon age? Why
or why not?
MIS can be an important enabler of business success and innovaon. This is not to say
that MIS equals business success and innovaon, or that MIS represents business
8. Why is it important for a business major to understand MIS?
MIS systems drive organizaons and all business students will be using MIS systems to
9. What type of career are you planning to pursue? How will your speci+c career use data,
informaon, business intelligence, and knowledge?
10. Explain systems thinking and how it supports business operaons.
Systems thinking is a way of monitoring the enre system by viewing mulple inputs
being processed or transformed to produce outputs while connuously gathering
11. What business strategies would you use if you were developing a compeve advantage
for a company?
12. Explain Porter’s Five Forces Model and the role it plays in decision making.
Formally de+ned, Porter’s Five Forces Model analyzes the compeve forces within the
environment in which a company operates to assess the potenal for pro+tability in an
13. How could a company use loyalty programs to inCuence buyer power? How could a
company use switching costs to lock in customers and suppliers?
Companies can also reduce buyer power with loyalty programs, which reward customers
based on their spending. The airline industry is famous for its frequent-Cyer programs,
buyer power.
One way to reduce buyer power is by manipulang switching costs, costs that
make customers reluctant to switch to another product or service. Switching costs
14. What are Porter’s three generic strategies and why would a company want to follow only
one?
Porter has iden+ed three generic business strategies for entering a new market: (1)
broad cost leadership, (2) broad di0erenaon, and (3) focused strategy. Broad
15. How can a company use Porter’s value chain analysis to measure customer sasfacon?
To idenfy these compeve advantages, Michael Porter created value chain analysis ,
which views a +rm as a series of business processes that each add value to the product
or service. Value chain analysis is a useful tool for determining how to create the
B U SI N ES S D R I V E N I N F O R M AT I O N
SYS T E M S
REVIEW QUESTIONS
1. Why must business professionals understand how MIS supports decision making and
problem solving?
Decision making is one of the most important and challenging aspects of management.
Decisions range from roune choices, such as how many items to order or how many
2. What is the relaonship between crical success factors and key performance
indicators? How can a manager use them to understand business operaons?
Crical success factors (CSFs) are the crucial steps companies perform to achieve their
goals and objecves and implement their strategies. Key performance indicators (KPIs)
3. What are the three di0erent levels found in a company? What types of decisions are
made at each level?
A few key concepts about organizaonal structure will help our discussion of MIS
decision-making tools. The structure of a typical organizaon is similar to a pyramid, and
4. De+ne transacon processing systems and describe the role they play in a business.
Transaconal informaon encompasses all the informaon contained within a single
business process or unit of work, and its primary purpose is to support the performance
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5. De+ne decision support systems and describe the role they play in a business.
Decision support systems (DSSs) model informaon using OLAP, which provides
assistance in evaluang and choosing among di0erent courses of acon. DSSs enable
6. De+ne expert systems and describe the role they play in a business.
Expert systems are computerized advisory programs that imitate the reasoning
processes of experts in solving di9cult problems. Typically, they include a knowledge
7. What are the capabilies associated with digital dashboards?
Execuve informaon systems use visualizaon to deliver speci+c key informaon to top
8. What are the common DSS analysis techniques?
Consolidaon is the aggregaon of data from simple roll-ups to complex groupings of
interrelated informaon. For example, data for di0erent sales representaves can then
be rolled up to an o9ce level, then a state level, then a regional sales level. Drill-down
9. How does an electronic spreadsheet program, such as Excel, provide decision support
capabilies?
10. What is the di0erence between the ability of a manager to retrieve informaon instantly
on demand using an MIS and the capabilies provided by a DSS?
11. What is ar+cial intelligence? What are the +ve types of AI systems? What applicaons
of AI o0er the greatest business value?
Ar+cial intelligence (AI) simulates human thinking and behavior, such as the ability to
reason and learn. Its ulmate goal is to build a system that can mimic human
12. What is a business process and what role does it play in an organizaon?
A business process is a standardized set of acvies that accomplish a speci+c task, such
13. Why do managers need to understand business processes? Can you make a correlaon
between systems thinking and business processes?
Some processes, such as a programming process, may be contained wholly within a
single department. However, most, such as ordering a product, are cross-funconal or
cross-departmental processes and span the enre organizaon. The process of “order to
14. Why would a manager need to review an As-Is and To-Be process model?
As-Is process models represent the current state of the operaon that has been
mapped, without any speci+c improvements or changes to exisng processes. The next
15. How can a manager use automaon, streamlining, and business process reengineering
to gain operaonal e9ciency and e0ecveness?
Automaon is the process of computerizing manual tasks, making them more e9cient
and e0ecve and dramacally lowering operaonal costs. Streamlining improves
business process e9ciencies by simplifying or eliminang unnecessary steps. As the rate
16. Explain the di0erence between customer-facing processes and business-facing
processes. Which one is more important to an organizaon?
Customer-facing processes, also called front-o9ce processes, result in a product or
service received by an organizaon’s external customer. They include ful+lling orders,
17. Explain how +nding di0erent ways to travel the same road relates to automaon,
streamlining, and business process reengineering.
Be#er, faster, cheaper is the path taken by automaon, streamlining, and business
process reengineering. Automaon and streamlining are typically be#er, faster, and
B U SI N ES S D R I V E N I N F O R M AT I O N
SYS T E M S
REVIEW QUESTIONS
1. What is the di0erent between sustaining and disrupve technology?
A disrupve technology is a new way of doing things that inially does not meet the
needs of exisng customers. Disrupve technologies tend to open new markets and
2. Do you consider the Internet and WWW forms of sustaining or disrupve technology?
3. How has the Internet and WWW created a global plaOorm for business?
As people began learning about the WWW and the Internet, they understood that it
enabled a company to communicate with anyone, anywhere, at any me, creang a new
4. What is the di0erence between ebusiness and ecommerce?
Ecommerce is the buying and selling of goods and services over the Internet.
Ecommerce refers only to online transacons. Ebusiness includes ecommerce along with
5. What are the bene+ts and challenges associated with ebusiness?
Advantages of ebusiness include opening new markets, reducing costs, improving
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6. What are the bene+ts and challenges associated with Business 2.0?
The bene+ts of Business 2.0 include content sharing through open sourcing,
7. Explain business models and their role in a company. How did ebusiness change
tradional business models?
A business model is a plan that details how a company creates, delivers, and generates
8. How can a company use mass customizaon and personalizaon to decrease buyer
power?
9. How does ebusiness di0er from Business 2.0?
10. What are the di0erences among collecve intelligence, knowledge management, and
crowdsourcing?
Collecve intelligence is collaborang and tapping into the core knowledge of all
employees, partners, and customers. Knowledge can be a real compeve advantage for
an organizaon. The most common form of collecve intelligence found inside the
11. Why is knowledge management crical to a business?
The primary objecve of knowledge management is to be sure that a company’s
12. What are the bene+ts and challenges associated with wikis?
Wikis are great tools for collaborang but can be changed and updated by any person.
13. How do disintermediaon, reintermediaon, and cybermediaon di0er?
Intermediaries are agents, so?ware, or businesses that provide a trading infrastructure
to bring buyers and sellers together. The introducon of ebusiness brought about
disintermediaon, which occurs when a business sells directly to the customer online
14. What is the semanc web?
The semanc web as a component of Web 3.0 that describes things in a way that
15. How does mbusiness di0erent from ebusiness?
Mobile business (or mbusiness, mcommerce) is the ability to purchase goods and
services through a wireless Internet-enabled device. Egovernment involves the use of