Chapters 1–10
Study Guide

The study of how organizations use information technology and data to make better decisions, manage operations, and create competitive advantage. MIS sits at the intersection of business strategy and technology — it is not purely about computers, but about how people, processes, and systems work together.

The rise of AI refers to the increasing use of machine learning, natural language processing, and automation systems to perform tasks that previously required human judgment — reshaping industries, job roles, and competitive dynamics.

Internal representations or frameworks people use to understand how something works. Mental models shape how individuals interpret information, solve problems, and make decisions — and two people can look at the same data and reach completely different conclusions based on different mental models.

A cognitive bias in which a person who knows something well finds it very difficult to imagine what it is like not to know it — making them a poor communicator to less-informed audiences because they unconsciously assume shared knowledge that doesn't exist.

A graphical model developed by Gartner that represents the maturity, adoption, and business application of specific technologies over time. It maps the typical emotional and expectation journey a technology goes through from invention to mainstream adoption.

A long-term edge over competitors that cannot easily be replicated or eroded — derived from unique resources, capabilities, or strategic positioning that create lasting value for customers and the firm.

A framework developed by Michael Porter to analyze the competitive intensity and attractiveness (profitability potential) of an industry by examining five structural forces that shape competition.

Porter's framework that maps competitive strategies along two dimensions: competitive advantage (cost vs. differentiation) and competitive scope (broad market vs. narrow/niche market). This creates four generic strategic positions.

A model that breaks down a firm's activities into primary and support activities to identify where value is created (and where costs are incurred) — helping firms find sources of competitive advantage within their own operations.

Obstacles that make it difficult for new competitors to enter a market — protecting incumbent firms from new competition and helping sustain competitive advantage.

The costs — financial, time, psychological, or effort-related — that a customer incurs when changing from one product or service to a competing one. High switching costs lock customers in and reduce the bargaining power of buyers.

Network effects occur when a product or service becomes more valuable as more people use it. Each additional user adds value not just for themselves, but for all existing users.

Visual or structured representations of the steps, decisions, and flows involved in completing a specific business activity — used to analyze, document, and improve how work gets done within an organization.

A framework that describes the five essential components of any information system — working together to collect, process, store, and communicate information to support organizational decision-making.

Network effects occur when a product or service becomes more valuable as more people use it — each new user increases value for all existing users. Metcalfe's Law formalizes this: the value of a network is proportional to the square of the number of connected users (n²).

The cost of producing one additional unit of software is essentially zero — once software is created, distributing another copy costs virtually nothing (server bandwidth costs aside). This is one of the most powerful economic properties of the software industry.

The practice of offering multiple software products or features together as a combined package — often at a price lower than buying each component individually — to increase perceived value, drive adoption, and lock in customers.

A layered model showing how software components stack on top of each other — each layer depending on the one below it, creating an integrated ecosystem that delivers end-user applications. (Also appears in Chapter 6 as the Ecosystem Model.)

A one-sided market serves a single type of customer (e.g., a manufacturer selling to consumers). A multi-sided market (or platform) serves two or more distinct user groups whose interactions with each other create the core value of the platform.

A business model that creates value by facilitating interactions between two or more distinct user groups — rather than producing a product itself. Platforms succeed by attracting enough participants on each side to generate self-reinforcing network effects.

Industries with strong network effects tend toward highly concentrated market structures — often a monopoly or duopoly — because the largest network is exponentially more valuable than the second-largest, making it very hard for smaller players to compete.

Because markets with strong network effects tend toward dominance by incumbents, challengers and incumbents alike use specific strategies to win or maintain position.

A technology or innovation that initially enters the market with a different — often inferior by conventional metrics — set of performance attributes that existing customers do not value, but over time improves to the point where it invades and eventually dominates established markets.

Disruptive innovators do not need to perform better than incumbents right away — they just need to appeal to enough customers at a cheap enough price while their technology continues to improve.

The error of making decisions based solely on quantitative observations linked to past events — while ignoring qualitative or hard-to-measure factors. Named after Robert McNamara (U.S. Secretary of Defense), who famously relied on quantifiable metrics like body counts during the Vietnam War while ignoring unmeasurable factors.

Established firms have structural and behavioral tendencies that leave them vulnerable to disruption, even when the threat is visible.

Strategies incumbents can use to protect against or participate in disruption rather than simply being overtaken by it.

Outsourcing production to third-party firms rather than directly owning plants or employing production workers. A company using contract manufacturing does not own factories — it contracts out the work.

Unlike competitors using contract manufacturing, Zara owns most of its factories. This gives it direct control over the entire production process — from raw materials to store shelves — allowing it to respond to fashion trends far faster than rivals.

The structure and coordination of relationships and activities involved in moving a product from raw materials to the end consumer — encompassing sourcing, production, inventory, logistics, and delivery.

The distortion of demand signals and increased order volatility that occurs as forecasts and orders move upstream from the retailer to the manufacturer. Small fluctuations in retail demand get amplified at each step of the supply chain.

Radio Frequency Identification tags attached to individual garments that allow Zara to track exactly where each item is in the production and distribution process in real time — from the factory floor to the store shelf.

The system at which a customer completes a transaction — the "cash register." In the context of MIS, POS systems are critical data collection tools, capturing real-time sales data that feeds directly back into inventory and production decisions.

Tablet-like devices used by Zara store staff to capture real-time customer feedback and preference data directly on the sales floor. Staff use PDAs to ask customers about design preferences and immediately transmit that data back to headquarters.

An approach to retail that offers consumers an integrated and complementary set of shopping, sales, and return experiences across all channels — including physical stores, websites, mobile apps, and social media — so the experience is seamless regardless of how the customer chooses to engage.

The practice of contracting work or business functions to an external party rather than performing them in-house — commonly used for manufacturing, IT, customer service, and logistics.

Zara deliberately limits clothing inventory based on store location and customer profile — creating a sense of exclusivity and urgency that drives immediate purchasing behavior.

Amazon operates by running many small businesses through its vast logistics and distribution resources, acting as a platform for third-party sellers and distributors — in contrast to Zara's vertically integrated, direct-ownership model.

Discarded electronics — such as laptops, phones, and servers — that damage the environment with their toxic materials (e.g., lead, mercury, cadmium).

A network of physical devices connected to the internet — such as smart thermostats, refrigerators, and industrial sensors — that can collect and exchange data without human intervention.

A framework that divides technology into multiple layers to show how they work together like a team, creating a deeply integrated system that delivers the software we use every day.

Short-term, fast-access data storage used while programs are running. RAM holds what the CPU is actively working with at any given moment.

Long-term data retention that stores files, apps, and operating systems. Unlike RAM, storage is non-volatile — data is not erased when the power is turned off.

Volatile — data that is permanently erased when the power is turned off on a device (e.g., RAM). Non-Volatile — data that is permanently stored and persists without power (e.g., SSD, hard drive).

The CPU — the "brain" of the computer. It executes instructions and performs calculations, determining the overall performance, speed, and capability of a system.

The observation by Gordon Moore (1965) that computing power doubles approximately every 18–24 months, meaning technology gets faster and cheaper over time due to the development of smaller, more powerful transistors.

A measure of how demand changes when price changes — essentially, the willingness of customers to purchase a product depending on its price.

A computing paradigm that uses qubits instead of classical bits. Because qubits can exist in multiple states simultaneously (superposition), quantum computing can process massive combinations of possibilities at once — essentially solving problems that are impossible for regular computers.

Software that is designed to help users perform specific tasks. Built on top of the operating system and user-centered, it drives productivity. (Examples: Excel, Spotify, Salesforce)

Systems that use data collected from other systems to create reports, organize data, and provide analysis for organizational decision-making. They turn raw data into insights — through dashboards, reports, and visualizations — specifically used for strategic decision-making.

Systems used to support customer-related sales and marketing decisions and activities. A CRM stores customer data — including purchases and preferences — and helps with marketing, sales, and customer service to create better customer retention.

Software used for creating, maintaining, and manipulating data. Acts as the brain of data storage — ensuring that data is organized, secure, and accessible. (Examples: MySQL, Oracle)

A form of computing where systems in different locations communicate and collaborate to complete a task. By spreading the workload across machines, distributed computing enables scalability and speed — and is the foundation of cloud computing.

A software package that integrates the many functions of a business — accounting, finance, inventory management, human resources, and more — into a single unified system. Creates a single source of truth and improves coordination across departments.

Software that connects different systems or applications so that they can communicate. Acts as the "glue" between systems — enabling integration and data sharing across platforms that were not originally designed to work together. Critical for large organizations.

The core software that manages hardware and allows applications to run. Manages memory, CPU, and files — acting as a bridge between hardware and the applications that run on top of it.

Systems that help a firm manage aspects of its value chain — from the flow of raw materials into the firm through delivery of finished products and services at the point of consumption. Tracks inventory, production, and logistics; improves efficiency, cost control, and reduces delays and shortages.

UI refers to all interaction methods between a user and software — including keyboard shortcuts, voice commands, and anything visible on screen. GUI is the visual, graphical subset of UI — things like buttons, sliders, icons, and progress bars (e.g., the playback slider on Spotify).

An open-source operating system (like Windows or macOS) that anyone can use, modify, and distribute — freely and without licensing fees. Powers the majority of the world's web servers, cloud infrastructure, and Android devices.

Software whose source code is freely available for anyone to view, modify, and distribute. Built and maintained by communities and companies, OSS encourages collaboration and innovation.

The ability of a system to handle increasing amounts of work or users without losing performance. Critical for growing companies — enabled by cloud computing and distributed computing. Software can scale much more easily than physical goods.

An economic measure of the full cost of owning a product — typically computing hardware and/or software. TCO includes direct costs such as the purchase price, plus indirect costs such as training, support, and maintenance.

The phenomenon where the cost of producing one additional unit of a software product approaches zero — because digital goods can be replicated and distributed with virtually no additional expense.

The delivery of computing resources — servers, storage, databases, software, and networking — over the internet, instead of owning and maintaining physical infrastructure. Instead of buying servers and maintaining data centers (high upfront costs), you rent computing power on demand.

Three delivery models that define what the cloud provider manages versus what the customer controls:

A cloud computing platform by Amazon that provides on-demand computing services over the internet. AWS allows anyone with a credit card to access industrial-strength, scalable computing resources — including computing capability, storage, and operating systems, software development platforms, and enterprise-class applications.

The trend where consumer technology — apps, devices — influences what businesses adopt. Employees expect easy-to-use technology in this day and age (Google, iPhone) and bring those expectations into the workplace, driving demand for user-friendly, on-demand software.

A contract that defines the expected performance and reliability of a service between a provider and a customer.

A non-professional programmer who builds programs using low-code or no-code tools. Citizen developers bridge the gap between business needs and IT, and speed up development. Common in departments like marketing or HR.

Ensuring systems and processes follow laws, regulations, and company policies. Examples include data privacy laws (GDPR), financial reporting rules (SOX), and healthcare data standards (HIPAA). Critical for avoiding legal penalties and reputational damage.

The uncontrolled expansion of project requirements beyond the original plan. Happens when new features are continuously added without adjusting timeline or budget — delaying delivery and increasing costs.

The person responsible for defining requirements and representing user needs in a project. The Product Owner prioritizes features and — most importantly — acts as a bridge between the business side and the development team.

A formal language used to write software — used by developers to build applications, with different languages suited for different types of projects. (Examples: Python, Java, JavaScript, SQL)

Tools that allow users to build applications with minimal or no programming, using drag-and-drop interfaces. No-code is designed for citizen developers; low-code is designed for more technical business users. Both enable faster development and can be used for front-end business tools.

The three factors that determine a project's success — Scope, Time, and Cost — which are deeply interdependent. Changing any one of them necessarily impacts at least one of the others.

The step-by-step process of building software. The SDLC travels through a series of stages to ensure software is built systematically and meets requirements.

Structured approaches to managing the software development process. Two major examples: