Information system in global business uwsb

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Information system in global business uwsb

  1. 1. Management InformationSystemsChapter 1Information Systems in GlobalBusiness Today
  2. 2. The Role of Information Systems in BusinessToday• How information systems are transformingbusiness• Increased technology investments• Increased responsiveness to customer demands.• economy Shifts in media and advertising• Globalization opportunities• Internet has drastically reduced costs of operating onglobal scale
  3. 3.  In the emerging, fully digital firm Significant business relationships are digitallyenabled and mediated Core business processes are accomplishedthrough digital networks Key corporate assets are managed digitally Digital firms offer greater flexibility in organizationand management Time shifting, space shifting
  4. 4.  Growing interdependence between abilityto use information technology and ability toimplement corporate strategies andachieve corporate goals Business firms invest heavily ininformation systems to achieve sixstrategic business objectives: Operational excellence New products, services, and business models Customer and supplier intimacy Improved decision making Competitive advantage Survival
  5. 5.  Operational excellence: Improvement of efficiency to attain higher profitability Information systems, technology an important tool inachieving greater efficiency and productivity E.g. Wal-Mart’s RetailLink system links suppliers tostores for superior replenishment system
  6. 6.  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 enablingtool for new products, services, business models E.g. Apple’s iPod, iTunes and Netflix’s Internet-based DVDrentals
  7. 7.  Customer and supplier intimacy: Serving customers well leads to customers returning,which raises revenues and profits E.g. High-end hotels that use computers totrack customer preferences and use tomonitor and customize environment Intimacy with suppliers allows them to provide vitalinputs, which lowers costs E.g. J.C.Penney’s information system whichlinks sales records to contract manufacturer
  8. 8.  Improved decision-making Without accurate information: Managers must use forecasts, best guesses,luck Leads to: Overproduction, underproduction of goods andservices Misallocation of resources Poor response times Poor outcomes raise costs, lose customers
  9. 9.  Operational excellence: Improvement of efficiency to attain higher profitability New products, services, and business models: Enabled by technology Customer and supplier intimacy: Serving customers raises revenues and profits Better communication with suppliers lowers costs
  10. 10.  Competitive advantage Delivering better performance Charging less for superior products Responding to customers and suppliers in real time Often achieved when firm achieves one of first fouradvantages E.g. Dell: Consistent profitability over 25 years; Dellremains one of the most efficient producer of PCs inworld. But Dell has lost some of its advantages to fastfollowers-- HP
  11. 11.  Survival Information technologies as necessity of business May be: Industry-level changes, e.g. Citibank’s introductionof ATMs Governmental regulations requiring record-keeping E.g. environmental protection act.
  12. 12. The Interdependence Between Organizations andInformation Technology
  13. 13.  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
  14. 14. Data and Information
  15. 15.  Information system: Three activities produceinformation organizations need Input: Captures raw data from organization orexternal environment Processing: Converts raw data into meaningfulform Output: Transfers processed information to peopleor activities that use it
  16. 16.  Feedback: Output returned to appropriate members oforganization to help evaluate or correct input stage Computer/Computer program vs.information system Computers and software are technical foundationand tools, similar to the material and tools used tobuild a house
  17. 17. Functions of an Information System
  18. 18. Information Systems Are More ThanComputers
  19. 19.  Organizational dimension of informationsystems Hierarchy of authority, responsibility Senior management Middle management Operational management Knowledge workers Data workers Production or service workers
  20. 20. Levels in a Firm
  21. 21.  Organizational dimension of informationsystems (cont.) Separation of business functions Sales and marketing Human resources Finance and accounting Production and manufacturing) Unique business processes Unique business culture Organizational politics
  22. 22.  Management dimension of informationsystem Managers set organizational strategy forresponding to business challenges In addition, managers must act creatively: Creation of new products and services Occasionally re-creating the organization
  23. 23.  Technology dimension of informationsystems Computer hardware and software Data management technology Networking and telecommunicationstechnology Networks, the Internet, intranets and extranets, WorldWide Web IT infrastructure: provides platform thatsystem is built on
  24. 24.  Business perspective on informationsystems: Information system is instrument for creatingvalue Investments in information technology willresult in superior returns: Productivity increases Revenue increases Superior long-term strategic positioning
  25. 25.  Business information value chain Raw data acquired and transformed throughstages that add value to that information Value of information system determined in part byextent to which it leads to better decisions, greaterefficiency, and higher profits Business perspective: Calls attention toorganizational and managerial nature ofinformation systems
  26. 26. The Business Information Value Chain
  27. 27. Variation in Returns onInformation Technology Investment
  28. 28.  Investing in information technology does notguarantee good returns Considerable variation in the returns firmsreceive from systems investments Factors: Adopting the right business model Investing in complementary assets (organizationaland management capital)
  29. 29.  Complementary assets: Assets required to derive value from a primaryinvestment Firms supporting technology investments withinvestment in complementary assets receivesuperior returns E.g.: invest in technology and the people to make itwork properly
  30. 30.  Complementary assets include: Organizational investments, e.g. Appropriate business model Efficient business processes Managerial investments, e.g. Incentives for management innovation Teamwork and collaborative work environments Social investments, e.g. The Internet and telecommunicationsinfrastructure Technology standards
  31. 31. Contemporary Approaches to Information Systems
  32. 32. • Technical approach• Emphasizes mathematically based models• Computer science, management science,operations research• Behavioral approach• Behavioral issues (strategic businessintegration, implementation, etc.)• Psychology, economics, sociology
  33. 33. • Management Information Science• Combines computer science, management science,operations research and practical orientation withbehavioral issues• Four main actors• Suppliers of hardware and software• Business firms• Managers and employees• Firm’s environment (legal, social, cultural context)
  34. 34. • Approach of the book: Socio-technical view• Optimal organizational performance achievedby jointly optimizing both social and technicalsystems used in production• Helps avoid purely technological approach
  35. 35. A Sociotechnical Perspective on Information Systems

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