mis11e ch01 edited 5

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11Chapter Chapter

Information SystemsInformation Systemsin Global Businessin Global Business

TodayToday




The Role of Information Systems in Business Today

• How information systems are transformin

business

• Increase in wireless technology use, Web sites

• Shifts in media and advertising

• ew federal security and accounting laws

• Globali!ation opportunities

• Internet has drastically reduced costs of o!erating on

global scale

• Presents both challenges and o!!ortunities

"anaement Information Systems"anaement Information SystemsChapter 1 Information Systems in Global Business TodayChapter 1 Information Systems in Global Business Today



1.# © 2010 by Prentice Hall



Information Te$hnoloy Capital In%estmentInformation Te$hnoloy Capital In%estment

&iure 1'1

Information te$hnoloy in%estment( defined as hardware( software( and $ommuni$ations

e)uipment( rew from #2* to +1* between 1,- and 2-.Source/ Based on data in 0.S. epartment of Commer$e( Bureau of $onomi$ 3nalysis( National Income

and Product Accounts( 2-.




• In the emerin( fully diital firm " Significant business relationshi!s are digitally enabled

and mediated

" #ore business !rocesses are accom!lished throughdigital networ$s

" %ey cor!orate assets are managed digitally

• iital firms offer reater fle5ibility in

orani!ation and manaement " &ime shifting, s!ace shifting




1.+ © 2010 by Prentice Hall

&ime shifting and s!ace shifting are connected toglobali'ation(

)ou could as$ students to e*!lain why a digital firm

is more li$ely to benefit from globali'ation than a

traditional firm+

the right idea is that by allowing business to be

conducted at any time time shifting- and any !lace

s!ace shifting-, digital firms are ideally suited for

global o!erations which ta$e !lace in remote

locations and very different time 'ones(




• Growin interdependen$e between ability to useinformation te$hnoloy and ability to implement$orporate strateies and a$hie%e $orporate oals

• Business firms in%est hea%ily in informationsystems to a$hie%e si5 stratei$ businessob7e$ti%es/

" 8perational e5$ellen$e8perational e5$ellen$e " 9ew produ$ts( ser%i$es( and business models9ew produ$ts( ser%i$es( and business models " Customer and supplier intima$yCustomer and supplier intima$y " Impro%ed de$ision ma:inImpro%ed de$ision ma:in " Competiti%e ad%antaeCompetiti%e ad%antae " Sur%i%alSur%i%al




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• 8perational e5$ellen$e/

" .usinesses continuously see$ to im!rove the efficiency of

their o!erations in order to achieve higher !rofitability(

Information systems and technologies are some of the mostim!ortant tools available to managers for achieving higher

levels of efficiency and !roductivity in business o!erations,

es!ecially when cou!led with changes in business !ractices

and management behavior(

" Wal/arts etail3in$ system lin$s su!!liers to stores for

su!erior re!lenishment system




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• 9ew produ$ts( ser%i$es( and business models4Information systems and technologies are a ma5or enabling

tool for firms to create new !roducts and services, as well as

entirely new business models(

" .usiness model4 describes how com!any !roduces,

delivers, and sells !roduct or service to create wealth

" Information systems and technology a ma5or enabling tool

for new !roducts, services, business models• 6*am!les4 7!!les iPod, i&unes, and iPhone, etfli*s Internet/

based 898 rentals




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• Customer and supplier intima$y/

" Serving customers well leads to customers returning,

which raises revenues and !rofits

• 6*am!le4 High/end hotels that use com!uters to trac$customer !references and use to monitor and customi'e

environment

"Intimacy with su!!liers allows them to !rovide vitalin!uts, which lowers costs

• 6*am!le4 :(#(Penneys information system which lin$s sales

records to contract manufacturer




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When a business really $nows its customers, and servesthem well, the customers generally res!ond by returning and

!urchasing more( &his raises revenues and !rofits(

3i$ewise with su!!liers4 the more a business engages its

su!!liers, the better the su!!liers can !rovide vital in!uts(

&his lowers costs( How to really $now your customers, or

su!!liers, is a central !roblem for businesses

with millions of offline and online customers(

6*( $ee! trac$ of guests !references, such as their!referred room tem!erature, chec$/in time, fre;uently dialed

tele!hone numbers, and television !rograms, and store

these data in a large data re!ository(



• Impro%ed de$ision ma:in

" Without accurate information4

• anagers must use forecasts, best guesses, luc$

• 3eads to4

" <ver!roduction, under!roduction of goods and services

" isallocation of resources

" Poor res!onse times

• Poor outcomes raise costs, lose customers " 6*am!le4 9eri'ons Web/based digital dashboard to

!rovide managers with real/time data on customer

com!laints, networ$ !erformance, line outages, etc(





• Competiti%e ad%antae

" 8elivering better !erformance

" #harging less for su!erior !roducts

" es!onding to customers and su!!liers in

real time

" 6*am!le4 &oyota and &PS &oyota Production

System- en5oy a considerable advantage overcom!etitors " information systems are critical

to the im!lementation of &PS




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• Survival

" Information technologies as necessity of

business

" ay be4

• Industry/level changes, e(g( #itiban$s introduction

of 7&s

• =overnmental regulations re;uiring record/$ee!ing " 6*am!les4 &o*ic Substances #ontrol 7ct, Sarbanes/

<*ley 7ct







The Interdependen$e Between 8rani!ations andThe Interdependen$e Between 8rani!ations and

Information Te$hnoloyInformation Te$hnoloy

In contemporary systems there is a growing interdependence between a frm’sinormation systemsand its business capabilities. Changes in strategy, rules, and business processesincreasingly require changes in hardware, sotware, databases, andtelecommunications. Oten, what the organization would like to do depends on what itssystems will permit it to do. &iure 1'2


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&he basic !oint of this gra!hic is that in order to achieve itsbusiness ob5ectives, a firm will need a significant investment in

I&( =oing the other direction from right to left-, having a

significant I& !latform can lead to changes in business

ob5ectives and strategies(6m!hasi'e the two/way nature of this relationshi!( .usinesses

rely on information systems to hel! them achieve their goals+ a

business without ade;uate information systems will inevitably

fall short( .ut information systems are also !roducts of the

businesses that use them( .usinesses sha!e their information

systems and information systems sha!e businesses(



• Information system/

" Set of interrelated com!onents

" #ollect, !rocess, store, and distribute information " Su!!ort decision ma$ing, coordination, and control

• Information %s. data

" 8ata are streams of raw facts

" Information is data sha!ed into meaningful form

<erspe$ti%es on Information Systems



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Raw data from a supermar:et $he$:out $ounter $an be pro$essed and orani!ed to produ$emeaninful information( su$h as the total unit sales of dish deterent or the total sales

re%enue from dish deterent for a spe$ifi$ store or sales territory.

&iure 1'#

ata and Informationata and Information


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• Information system/ &hree activities

!roduce information organi'ations need

" Input4 #a!tures raw data from organi'ationor e*ternal environment

" <ro$essin4 #onverts raw data into

meaningful form

" 8utput4 &ransfers !rocessed information to

!eo!le or activities that use it




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3n information system $ontains information about an orani!ation and its surroundin en%ironment. Three basi$ a$ti%ities=input(

pro$essin( and output=produ$e the information orani!ations need. &eedba$: is output returned to appropriate people or a$ti%ities in theorani!ation to e%aluate and refine the input. n%ironmental a$tors( su$h as $ustomers( suppliers( $ompetitors( sto$:holders( and reulatory

aen$ies( intera$t with the orani!ation and its information systems.

&iure 1'4

&un$tions of an Information System&un$tions of an Information System




imentions


0sin information systems effe$ti%ely re)uires an understandin of the orani!ation(

manaement( and information te$hnoloy shapin the systems. 3n information system$reates %alue for the firm as an orani!ational and manaement solution to $hallenes

posed by the en%ironment.

&iure 1'+

Information Systems 3re "ore Than ComputersInformation Systems 3re "ore Than Computers

&he field of management

information systems IS-tries

to achieve this broader

information systems literacy(




• 8rani!ational

dimension of

information systems

" Hierarchy of authority,res!onsibility

• Senior management

• iddle management

• <!erational management

• %nowledge wor$ers

• 8ata wor$ers

• Production or service

wor$ers






• 8rani!ational dimension of information

systems >$ont.? " Se!aration of business functions

• Sales and mar$eting

• Human resources

• >inance and accounting

• anufacturing and !roduction

" ?ni;ue business !rocesses " ?ni;ue business culture

" <rgani'ational !olitics





1.2# © 2010 by Prentice Hall

• "anaement dimension of

information systems

" anagers set organi'ational strategy forres!onding to business challenges

" In addition, managers must act

$reati%ely4

• #reation of new !roducts and services

• <ccasionally re/creating the organi'ation






• Te$hnoloy dimension of informationsystems

" #om!uter hardware and software

" 8ata management technology

" etwor$ing and telecommunications technology

• etwor$s, the Internet, intranets and e*tranets, WorldWide Web

" I& infrastructure4 !rovides !latform that system isbuilt on





1.2+ © 2010 by Prentice Hall

• Business perspe$ti%e on informationsystems/

" Information system is instrument forcreating value

" Investments in information technology willresult in su!erior returns4

• Productivity increases

• evenue increases

• Su!erior long/term strategic !ositioning






• Investing in information technology does not guarantee good returns

• #onsiderable variation in the returns firmsreceive from systems investments

• >actors4 " 7do!ting the right business model " Investing in com!lementary assets organi'ational and

management ca!ital-





1.2; © 2010 by Prentice Hall



The study of information systems deals with issues and insihts $ontributed from te$hni$al

and beha%ioral dis$iplines.

&iure 1',

Contemporary 3pproa$hes to Information SystemsContemporary 3pproa$hes to Information Systems



1.2- © 2010 by Prentice Hall

• Te$hni$al approa$h

• 6m!hasi'es mathematically based models

• #om!uter science, management science,o!erations research

• Beha%ioral approa$h

• .ehavioral issues strategic businessintegration, im!lementation, etc(-

• Psychology, economics, sociology

Contemporary 3pproa$hes to Information Systems




1 2,

• 3pproa$h of this boo:/ So$iote$hni$al

%iew

• <!timal organi'ational !erformanceachieved by 7ointly o!timi'ing both social

and technical systems used in !roduction

• Hel!s avoid !urely technological a!!roach

Contemporary 3pproa$hes to Information Systems


&echnology and <rgani'ation need to meet somewhere, somehow@@

=oing too much on one side is <& always good(

mis11e ch01 edited 5

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