Information Systems in Business Today - Islamic University of ...

Information Systems in Business Today - Islamic University of ...

Chapter 1 Information Systems in Business Today VIDEO CASES Case 1: UPS Global Operations with the DIAD IV Case 2: Google Data Center Efficiency Best Practices Instructional Video 1: Green Energy Efficiency in a Data Center Using Tivoli Architecture Instructional Video 2: Tour IBMs Raleigh Data Center Management Information Systems Chapter 1: Information Systems in Global Business Today Learning Objectives How are information systems transforming business, and why are they so essential for running and managing a business today?

What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems? 1.2 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The SF Giants Win Big with Information Technology Problem: Improving fan attendance and minimizing lost revenue when season ticket-holders dont attend. Solutions:

Enhance customer satisfaction by offering Wi-Fi access and game-related information services. Provide marketplace for ticketholders to resell tickets. Enable dynamic pricing to sell more tickets. 1.3 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The SF Giants Win Big with Information Technology San Francisco Giants/AT&T Stadium uses Fieldf/x to improve team decision making, Qcue to provide dynamic ticket pricing, and wireless technology to provide services for fans. Demonstrates ITs role in increasing value and revenue in any business. Illustrates the potential for technology to improve

customer experience. 1.4 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today How information systems are transforming business Emerging mobile digital platform Growing business use of big data Growth in cloud computing Globalization opportunities Internet has drastically reduced costs of operating on

global scale Increases in foreign trade, outsourcing Presents both challenges and opportunities 1.5 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Information Technology Capital Investment FIGURE 1-1 1.6 Information technology capital investment, defined as hardware, software, and communications equipment, grew from 14 percent to 33 percent of all invested capital between 1999 and 2013.

Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Interactive Session: Management MEET THE NEW MOBILE WORKERS Read the Interactive Session and discuss the following questions What kinds of applications are described in the case? What business functions do they support? How do they improve operational efficiency and decision making? Identify the problems that businesses in this case study solved by using mobile digital devices. What kinds of businesses are most likely to benefit from equipping their employees with mobile devices? Discuss the implications of this statement: The iPhone is not a game changer, its an industry changer.

1.7 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today In the emerging, fully digital firm: Significant business relationships are digitally enabled and mediated. Core business processes are accomplished through digital networks. Key corporate assets are managed digitally. Digital firms offer greater flexibility in organization and management.

Time shifting, space shifting 1.8 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today Growing interdependence between: Ability to use information technology and Ability to implement corporate strategies and achieve corporate goals 1.9

Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today Firms invest heavily in information systems to achieve six strategic business objectives: 1. 2. 3. 4. 5. 6. 1.10 Operational excellence

New products, services, and business models Customer and supplier intimacy Improved decision making Competitive advantage Survival Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Interdependence Between Organizations and Information Technology Figure 1.2 1.11 In contemporary systems there is a growing interdependence between a firms information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do.

Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today Operational excellence: Improvement of efficiency to attain higher profitability Information systems, technology an important tool in achieving greater efficiency and productivity Walmarts Retail Link system links suppliers to stores for superior replenishment system 1.12

Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today New products, services, and business models: Business model: describes how company produces, delivers, and sells product or service to create wealth Information systems and technology a major enabling tool for new products, services, business models Examples: Apples iPad, Googles Android OS, and Netflix 1.13

Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today Customer and supplier intimacy: Serving customers well leads to customers returning, which raises revenues and profits. Example: High-end hotels that use computers to track customer preferences and used to monitor and customize environment Intimacy with suppliers allows them to provide vital inputs, which lowers costs. Example: JCPenneys information system which links sales records to contract manufacturer 1.14

Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today Improved decision making Without accurate information: Managers must use forecasts, best guesses, luck Results in: Overproduction, underproduction Misallocation of resources Poor response times Poor outcomes raise costs, lose customers Example: Verizons Web-based digital dashboard to

provide managers with real-time data on customer complaints, network performance, line outages, and so on 1.15 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today Competitive advantage Delivering better performance Charging less for superior products Responding to customers and suppliers in real time Examples: Apple, Walmart, UPS

1.16 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today The Role of Information Systems in Business Today Survival Information technologies as necessity of business Industry-level changes Example: Citibanks introduction of ATMs Governmental regulations requiring recordkeeping Examples: Toxic Substances Control Act, Sarbanes-Oxley Act Dodd-Frank Act

1.17 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today What Is an Information System? Information system: Set of interrelated components Collect, process, store, and distribute information Support decision making, coordination, and control Information vs. data Data are streams of raw facts. Information is data shaped into meaningful form. 1.18

Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Data and Information Figure 1.3 1.19 Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for a specific store or sales territory. Copyright 2016 Pearson Education, Inc. Management Information Systems

Chapter 1: Information Systems in Global Business Today What Is an Information System? Three activities of information systems produce information organizations need Input: Captures raw data from organization or external environment Processing: Converts raw data into meaningful form Output: Transfers processed information to people or activities that use it 1.20 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today

What Is an Information System? Feedback: Output is returned to appropriate members of organization to help evaluate or correct input stage. Computer/computer program vs. information system Computers and software are technical foundation and tools, similar to the material and tools used to build a house. 1.21 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today

Functions of an Information System An information system contains information about an organization and its surrounding environment. Three basic activities input, processing, and outputproduce the information organizations need. Feedback is output returned to appropriate people or activities in the organization to evaluate and refine the input. Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory agencies,

interact with the organization and its information systems. Figure 1.4 1.22 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Information Systems Are More Than Computers Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates

value for the firm as an organizational and management solution to challenges posed by the environment. Figure 1.5 1.23 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today What Is an Information System? Organizational dimension of information systems

Hierarchy of authority, responsibility Senior management Middle management Operational management Knowledge workers Data workers Production or service workers 1.24 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Levels in a Firm Business organizations are hierarchies consisting of three principal levels: senior management, middle

management, and operational management. Information systems serve each of these levels. Scientists and knowledge workers often work with middle management. Figure 1.6 1.25 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today What Is an Information System?

Organizational dimension of information systems (cont.) Separation of business functions Sales and marketing Human resources Finance and accounting Manufacturing and production Unique business processes Unique business culture Organizational politics 1.26 Copyright 2016 Pearson Education, Inc.

Management Information Systems Chapter 1: Information Systems in Global Business Today What Is an Information System? Management dimension of information systems Managers set organizational strategy for responding to business challenges In addition, managers must act creatively: Creation of new products and services Occasionally re-creating the organization 1.27 Copyright 2016 Pearson Education, Inc. Management Information Systems

Chapter 1: Information Systems in Global Business Today What Is an Information System? Technology dimension of information systems Computer hardware and software Data management technology Networking and telecommunications technology Networks, the Internet, intranets and extranets, World Wide Web IT infrastructure: provides platform that system is built on 1.28 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today

Interactive Session: Organizations UPS COMPETES GLOBALLY WITH I.T. Read the Interactive Session and discuss the following questions What are the inputs, processing, and outputs of UPSs package tracking system? What technologies are used by UPS? How are these technologies related to UPSs business strategy? What business objectives do UPSs information systems address? What would happen if these systems were not available? 1.29 Copyright 2016 Pearson Education, Inc. Management Information Systems

Chapter 1: Information Systems in Global Business Today What Is an Information System? Dimensions of UPS tracking system Organizational: Procedures for tracking packages and managing inventory and provide information Management: Monitor service levels and costs Technology: Handheld computers, bar-code scanners, networks, desktop computers, and so on 1.30 Copyright 2016 Pearson Education, Inc.

Management Information Systems Chapter 1: Information Systems in Global Business Today What Is an Information System? Business perspective on information systems: Information system is instrument for creating value Investments in information technology will result in superior returns: Productivity increases Revenue increases Superior long-term strategic positioning 1.31 Copyright 2016 Pearson Education, Inc.

Management Information Systems Chapter 1: Information Systems in Global Business Today What Is an Information System? Business information value chain Raw data acquired and transformed through stages that add value to that information Value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits Business perspective: Calls attention to organizational and managerial nature of information systems 1.32 Copyright 2016 Pearson Education, Inc.

Management Information Systems Chapter 1: Information Systems in Global Business Today The Business Information Value Chain Figure 1-7 1.33 From a business perspective, information systems are part of a series of value-adding activities for acquiring, transforming, and distributing information that managers can use to improve decision making, enhance organizational performance, and, ultimately, increase firm profitability. Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today What Is an Information System?

Investing in information technology does not guarantee good returns. There is considerable variation in the returns firms receive from systems investments. Factors: Adopting the right business model Investing in complementary assets (organizational and management capital) 1.34 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Variation in Returns on Information Technology Investment Although, on average, investments in information

technology produce returns far above those returned by other investments, there is considerable variation across firms. Figure 1.8 1.35 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today What Is an Information System? Complementary assets: Assets required to derive value from a primary

investment Firms supporting technology investments with investment in complementary assets receive superior returns Example: Invest in technology and the people to make it work properly 1.36 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today What Is an Information System? Complementary assets include: Organizational assets, for example: Appropriate business model

Efficient business processes Managerial assets, for example: Incentives for management innovation Teamwork and collaborative work environments Social assets, for example: The Internet and telecommunications infrastructure Technology standards 1.37 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Contemporary Approaches to Information Systems The study of information systems deals with issues

and insights contributed from technical and behavioral disciplines. Figure 1.9 1.38 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Studying Information Systems Technical approach Emphasizes mathematically based models Computer science, management science, operations research

Behavioral approach Behavioral issues (strategic business integration, implementation, etc.) Psychology, economics, sociology 1.39 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Studying Information Systems Management Information Systems Combines computer science, management science, operations research, and practical orientation with behavioral issues

Four main actors 1.40 Suppliers of hardware and software Business firms Managers and employees Firms environment (legal, social, cultural context) Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today Studying Information Systems

Approach of this book: Sociotechnical view Optimal organizational performance achieved by jointly optimizing both social and technical systems used in production Helps avoid purely technological approach 1.41 Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today A Sociotechnical Perspective on Information Systems Figure 110 1.42

In a sociotechnical perspective, the performance of a system is optimized when both the technology and the organization mutually adjust to each other until a satisfactory fit is obtained. Copyright 2016 Pearson Education, Inc. Management Information Systems Chapter 1: Information Systems in Global Business Today 1.43 Copyright 2016 Pearson Education, Inc.

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