CHAPTER 2

Information Systems: Concepts and Management

CHAPTER OUTLINE

2.1 Types of Information Systems

2.2 Competitive Advantage and Strategic Information Systems

2.3 Why Are Information Systems Importantto Organizations and Society?

2.4 Managing Information Resources

LEARNING OBJECTIVES

Describe the components of computer-based 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 porter’s 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.

Chapter Opening Case

Expansion

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

Information Systems Inside Your Organization

Information Technology Outside Your Organization

Capabilities of Information Systems

Perform high-speed, high-volume numerical computations Provide fast, accurate communication and collaboration within

and among organizations Store huge amounts of information in small space Allow quick, inexpensive access to vast amounts of information

worldwide Interpret vast amounts of data quickly and efficiently Increase effectiveness and efficiency of people working in

groups in one place or around the world Automate semiautomatic business process and manual tasks

Table 2.1

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 andStrategic Information Systems

Competitive Advantage

Strategic Information Systems

Porter’s Competitive Forces Model

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

Porter’s Competitive Forces Model

Porter’s 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.

Porter’s 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.

Porter’s 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.

Porter’s Competitive Forces Model

The threat of substitute products or services is high when there are many substitutes for an organization’s 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.

Porter’s Competitive Forces Model

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

Porter’s Value Chain Model

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

Porter’s Value Chain Model

Strategies for Competitive Advantage

Cost Leadership

Differentiation

Innovation

Operational Effectiveness

Customer-orientation

Under Armour (IT’s About Business 2.2)

2.3 Why are Information Systems Important to Organizations & Society

IT will reduce the number of middle managers.

IT will change the manager’s job. IT impacts employees at work. IT provides quality-of-life improvements.

Ergonomic Products

When ergonomics doesn’t work

When all else fails…….

Enabling People with Disabilities to Work with Computers

The Robot Revolution

See Invasion of the Humanoid Robots

The Robot Revolution

See video of Big Dog robot in action

The Robot Revolution (continued)

Honda’s ASIMO robot

See video of ASIMO in action

See ASIMO commercial

See video of ASIMO learning

Industrial Robots

See video of warehouse robots at work

Improvements in Health Care

Improvements in Health Care (continued)

The Pill Cam

See video of the pill cam in action

The daVinci Surgical Robot

The robot

The surgeon’s console

The daVinci Surgical Robot (continued)

The daVinci robot in use

Medical Simulation

Two physicians perform a procedure on a simulated human (mannequin)

See video of Sim Man in action

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.

This video shows the first help desk.

Chapter Closing Case