INFORMATION SYSTEMS IN

BUSINESS TODAY

Chapter Objective

How are information systems transforming business

relationship to globalization.

Why are information systems so essential for running

and managing a business

What exactly is an Information System? How does it work?

Complementary assets for information systems

Identify the major management challenges to building and

using information systems.

How Info Systems are

Transforming Business

Increase in wireless technology use, Web sites

More online shopping & purchasing
More online based research.
Fast paced Supply Chain.
Social Networking (Facebook, Twitter) becoming so popular.
Online advertising is booming

Role of Info. Systems in Business

Many managers work in firms that are intensively using

information systems and making large investments for
information systems.
IT knowledge for managers is required for better
management of resources / capital.
More cell phones, iPhones, email, phones with Android
(samsung galaxy), BlackBerry, online conferencing, etc.

Globalization Challenges & Opportunities

Flattened World

Internet has drastically reduced costs of operating on global

scale
More global buy & sell.
More global jobs, remote assistance, remote collaboration.
Presents both challenges and opportunities

Whats New in MIS?

The Emerging Mobile Digital Platform
(high tech cell phones like iPhone,
phones with Android, and tiny websurfing). YouTube, iPhones, etc are not
just gadgets or entertainment outlets, in
many cases adopted by corporations as
business tools. Millions of managers rely
heavily on the mobile digital platform to
coordinate vendors, customers and
employees

More dependency
on
telework,
remote work.

Social Networking where the

employees meet one another
where the job / work is organized
and done.

The growth of online software

as a service and cloud
computing (Cloud computing is
defined as a type of computing
that relies on sharing computing
resourcesrather than having local
servers
or
personaldevicesto
handleapplications.)where more
and more business software runs
over the Internet.

Digital Firm

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

Strategic Business Objectives of

Information System
In most US firms information systems are essential for conduction
day-to-day business. These are MUST for survival & prosper.
E-Commerce firms such as Amazon, eBay, Google would not exist
without systems/ internet.
Business firms invest heavily in information systems to achieve
six strategic business objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival

Operational Excellence

In most cases information systems can provide more

productivity and operational excellence.

Wal-Mart has achieved sales of more than $28 per square

foot, when the closest competitor has achieved $23/ sq.
foot.

New products, services, and business models

Business model: describes how company produces,

delivers, and sells product or service to create wealth
Truly new Business Models are invented which are
internet based, such as Music Industry in USA.

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 use to monitor and
customize environment
Intimacy with suppliers allows them to provide vital
inputs, which lowers costs .
Example: J.C.Penneys information system which links
sales records to contract manufacturer

Improved decision making

Without accurate information:

Managers must use forecasts, best guesses,
luck
Leads to:
Overproduction, underproduction of goods
and services
Misallocation of resources
Poor response times
Poor outcomes raise costs, lose customers

Competitive Advantage
Delivering better performance
Charging less for superior products
Responding to customers and suppliers in real time
Ekhanei.com is a great example

Survival

Information technologies as necessity of business

Industry-level
changes,
e.g.
Citibanks
introduction of ATMs
Governmental regulations requiring recordkeeping

Information Systems
Information System:
Set of interrelated components collect (or retrieve), process,
store & distribute information to support decision making
and control in an organization.

Input
Processing
Output
Storage
Feedback

Information Systems

Five activities of information

information organizations need

systems

produce

1. Input: Captures raw data from organization or

external environment
2. Processing: Converts raw data into meaningful
form
3. Output: Transfers processed information to
people or activities that use it
4. Storage: Store the processed information for
future references
5. Feedback:
Output
returned
to
appropriate
members of organization to help evaluate or
correct input stage

Computer Literacy & Information

Systems Literacy
Computer Literacy: focuses
primarily on knowledge of
information technology.

Information Systems Literacy: IT

knowledge, plus understanding about
organization & management.

Organizational dimension of information systems

Organizational dimension of information systems

Hierarchy of authority, responsibility
Senior management: make long-range strategic
decisions about what products and services to produce.
Middle management : carry out the programs and
plans of senior management.
Operational management : responsible for monitoring
the firms daily activities.
Knowledge workers : design products or services and
create new knowledge (engineers, architects, scientists)
Data workers: process the organizations paperwork
(secretaries, bookkeepers, clerks)
Production or service workers : actually produce the
organizations products or services.

Organizational dimension of
information systems
Different Business Functions like (Sales & Marketing,
Manufacturing & Production, Finance & Accounting,
Human Resource) and also other factors of the
organization like (Unique business processes, Unique
business culture and Organizational politics) influence
the Information System at the organization.

Business Perspective on
Information Systems

Information systems provide economic value

business. Thats why money is spent on IS / IT

The result is: more profit, more market share, more return
on investment, increases in revenue, etc.

to

the

Why every investment in IS does

not work?

Investing in information technology does not

guarantee good returns
Considerable variation in the returns firms
receive from systems investments

Complementary assets

Complementary assets
Assets required to derive value from a primary
investment
Firms supporting technology investments with
investment in complementary assets receive
superior returns
E.g.: invest in technology and the people to
make it work properly

Complementary assets

Complementary assets include:

Organizational assets, e.g.
Appropriate business model
Efficient business processes
Managerial assets, e.g.
Incentives for management innovation
Teamwork and collaborative work environments
Social assets, e.g.
The
Internet
and
telecommunications
infrastructure
Technology standards

Thank You