Strategic Business Objectives of Information Systems

Although many managers are familiar with the reasons why managing their typical resources such as equipment and people are
important, it is important to examine the growing interdependence between a firms ability to use information technology and its
ability to implement corporate strategies and achieve corporate goals. Specifically, business firms invest heavily in information to
achieve six strategic business objectives:

Operational excellence
New products, services, and business models
Customer and supplier intimacy
Improved decision making
Competitive advantage
Survival

Operational Excellence

Businesses continuously seek to improve the efficiency of their operations in order to achieve higher profitability. Information systems
and technologies are some of the most important tools available to managers for achieving higher levels of efficiency and productivity
in business operations, especially when coupled with changes in business practices and management behavior.

New Products, Services, and Business Models

Information systems and technologies are a major enabling tool for firms to create new products and services, as well as entirely new
business models. A business model describes how a company produces, delivers, and sells a product or service to create wealth. As
successful as Apple Inc., BestBuy, and Walmart were in their traditional brick-and-mortar existence, they have all introduced new
products, services, and business models that have made them even more competitive and profitable.

Customer and Supplier Intimacy

When a business really knows its customers, and serves them well, the way they want to be served, customers generally respond by
returning and purchasing more. The result is increased revenues and profits. Likewise with suppliers: The more a business engages its
suppliers, the better the suppliers can provide vital inputs. The result is a lower cost of doing business. JC Penney is an excellent
example of how the use of information systems and technologies are extensively used to better serve suppliers and retail customers. Its
information system digitally links the supplier to each of its stores worldwide. Suppliers are able to ensure the continuous flow of
products to the stores in order to satisfy customer demands.

Improved Decision Making

Information systems and technologies have made it possible for managers to use real-time data from the marketplace when making
decisions. Previously, managers did not have access to accurate and current data and as such relied on forecasts, best guesses, and
luck. The inability to make informed decisions resulted in increased costs and lost customers.

Competitive Advantage

Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time
all add up to higher sales and higher profits that your competitors cannot match. Toyota and Walmart are prime examples of how
companies use information systems and technologies to separate themselves from their competition. Toyota worked its way to top of
its industry with the help of its legendary information system. Walmart is the most efficient retail store in the industry based in large
part on how well it uses its information resources.

Survival

Firms also invest in information systems and technologies because they are necessities for doing business. Information systems are not
a luxury. In most businesses, information systems and technology are the core to survival. Citibank was the first banking firm to
introduce ATMs. In doing so, they had a major competitive advantage over their competitors. In order to remain and survive in the
retail banking industry, other banks had no choice but to provide ATM services to banking customers.

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Management Information Systems provides comprehensive and integrative coverage of essential new technologies, information system
applications, and their impact on business models and managerial decision making in an exciting and interactive manner.

An information system is a set of interrelated components that work together to collect, process, store, and disseminate information to
support decision making, coordination, control, analysis, and visualization in an organization.
Information systems are the foundation for conducting business today. It plays a critical role in increasing productivity and industrial
survival thus making it hard for an organization to continue to exist without extensive use of it.
With information system existence it ensures improved decision making, Operational excellence, and Competitive advantage,
Customer and supplier intimacy and total overall organizational survival. Information systems may help managers and workers
analyze problems, visualize complex subjects, and create new products.

THREE DIMENSIONS OF INFORMATION SYSTEM

An information system represents a combination of management, organization, and technology element. To fully understand
information systems, a manager must understand the broader organization, management, and information technology dimensions of
systems and their power to provide solutions to challenges and problems in the business environment.
Hence it incorporates an understanding of the management and organizational dimensions of systems as well as the technical
dimensions of systems as information systems literacy. Information systems literacy includes a behavioral as well as a technical
approach to studying information systems. Computer literacy, in contrast, focuses primarily on knowledge of information technology.
These dimensions can be explained as follows
ORGANIZATIONAL DIMENSION
Information systems are part of organizations. Information systems will have the standard operating procedure and the culture of an
organization imbedded within them.
The organization dimension of information systems involves the organizations hierarchy, functional specialties, business processes,
culture, and political interest groups.
In reality today information systems affect a much larger part of the organization itself, such as organizational products, objectives,
and structure. Powerful computers, software, and networks, including the Internet, have helped organizations become more flexible,
More and more business activities at all levels involve the use of information systems.
There is a growing interdependence between the organization and its information systems. An organizations present and future
accomplishments depend in many respects on what its systems will permit it to do now and later, thus a change in the business's
strategy, rules, or procedures requires changes in the information systems software, hardware, databases, and telecommunications.

MANAGEMENT DIMENSION OF INFORMATION SYSTEM

Managers perceive business challenges in the environment, they set the organizational strategy for responding and allocate the human
and financial resources to achieve the strategy and coordinate the work.
The management dimension of information systems involves leadership, strategy, and management behavior. Information systems
supply tools and information needed by managers to allocate, coordinate and monitor their work, make decisions, create new products,
and services and make long-range strategic decisions. Information system helps to make teamwork and collaborative work
environments
Information systems help to drive both daily operations and managerial strategies. Information systems can help management to
obtain periodic reports, These reports can be obtained from different systems such as sales./marketing systems, Human resource
systems, accounting systems. The systems assist managers in making decision making such as by having What-if" questions on
decision support systems.
Also helps senior management to tackle and address strategic issues and long-term
trends both in the firm and in the external environment. Their principle concern is matching
changes in the external environment with existing organizational capability

TECHNOLOGY DIMENSION
The technology dimensions consist of computer hardware, software, data management technology, and
networking/telecommunications technology (including the Internet).
Management uses technology (hardware, software, storage, and telecommunications) to carry out their functions. It is one of the
many tools managers use to cope with change.
Computer hardware is the physical equipment used for input, processing, and output activities in an information system. It consists of
the following: the computer processing unit; various s input, output, and storage devices; and physical media to link these devices
together.
Computer software consists of the detailed preprogrammed instructions that control and coordinate the computer hardware
components in an information system.
Storage technology includes both the physical media for storing data, such as magnetic or optical disk or tape, and the software
governing the organization of data on these physical media.

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Communications technology, consisting of both physical devices and software, links the various pieces of hardware and transfers data
from one physical location to another. Computers and communications equipment can be connected in networks for sharing voice,
data, images, sound, or even video
All of these technologies represent resources that can be shared throughout the organization and constitute the firm's information
technology (IT) infrastructure re. The IT infrastructure provides the foundation or platform on which the firm can build its specific
information systems.
Each organization must carefully design and manage its information technology infrastructure so that it has the set of technology
services it needs for the work it wants to accomplish with information systems.

Chapter two
SYSTEMS FOR DIFFERENT MANAGEMENT GROUPS

A business firm has systems to support different groups or levels of management.

These systems include transaction processing systems and systems for business intelligence.

Transaction Processing Systems

Operational managers need systems that keep track of the elementary activities and transactions of the organization, such as sales,
receipts, cash deposits, payroll, credit decisions, and the flow of materials in a factory. Transaction processing systems (TPS)
provide this kind of information. A transaction processing system is a computerized system that performs and records the daily routine
transactions necessary to conduct business, such as sales order entry, hotel reservations, payroll, employee record keeping, and
shipping.

Transaction processing systems

Perform and record daily routine transactions necessary to conduct business
Examples: sales order entry, payroll, shipping
Allow managers to monitor status of operations and relations with external environment
Serve operational levels
Serve predefined, structured goals and decision making

Business intelligence
Class of software applications
Analyze current and historical data to find patterns and trends and aid decision-making
Used in systems that support middle and senior management
Data-driven DSS
Executive support systems (ESS)

WHAT IS COLLABORATION?

Collaboration is working with others to achieve shared and explicit goals.

Collaboration focuses on task or mission accomplishment and usually takes
place in a business, or other organization, and between businesses.

Collaboration:
Short-lived or long-term
Informal or formal (teams)
Growing importance of collaboration:
Changing nature of work
Growth of professional work interaction jobs
Changing organization of the firm
Changing scope of the firm
Emphasis on innovation
Changing culture of work

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 Chapter three

PORTERS COMPETITIVE FORCES MODEL

Traditional competitors
All firms share market space with competitors who are continuously devising new products, services,
efficiencies, switching costs
New market entrants
Some industries have high barriers to entry, e.g. computer chip business
New companies have new equipment, younger workers, but little brand recognition
Substitute products and services
Substitutes customers might use if your prices become too high, e.g. iTunes substitutes for CDs
Customers
Can customers easily switch to competitors products? Can they force businesses to compete on price alone in
transparent marketplace?
Suppliers
Market power of suppliers when firm cannot raise prices as fast as suppliers

Four generic strategies for dealing with competitive forces, enabled by using IT
Low-cost leadership
Product differentiation
Focus on market niche
Strengthen customer and supplier intimacy

Low-cost leadership
Produce products and services at a lower price than competitors while enhancing quality and level of service
Examples: Wal-Mart
Product differentiation
Enable new products or services, greatly change customer convenience and experience
Examples: Google, Nike, Apple
Focus on market niche
Use information systems to enable a focused strategy on a single market niche; specialize
Example: Hilton Hotels
Strengthen customer and supplier intimacy
Use information systems to develop strong ties and loyalty with customers and suppliers; increase switching
costs
Example: Netflix, Amazon

Chapter four

Negative social consequences of systems

Balancing power: Although computing power decentralizing, key decision-making remains centralized
Rapidity of change: Businesses may not have enough time to respond to global competition
Maintaining boundaries: Computing, Internet use lengthens work-day, infringes on family, personal time
Dependence and vulnerability: Public and private organizations ever more dependent on computer
systems
Computer crime and abuse
Computer crime: Commission of illegal acts through use of compute or against a computer system
computer may be object or instrument of crime
Computer abuse: Unethical acts, not illegal (Spam: High costs for businesses in dealing with
spam)
Employment: Reengineering work resulting in lost jobs
Equity and access the digital divide: increasing racial and social class clearance