Managing the digital firm

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Managing the digital firm

  1. 1. Chapter 1 MANAGING THE DIGITAL FIRM
  2. 2. OBJECTIVES What is the role of information systems in today’s competitive business environment? What exactly is an information system? What do managers need to know about information systems? How are information systems transforming organizations and management?
  3. 3. OBJECTIVES How has the Internet and Internet technology transformed business? What are the major management challenges to building and using information systems?
  4. 4. MIS: Management Information System An organized approach to the study of the information needs of an organizations management at every level in making operational, tactical, and strategic decisions. Its objective is to design and implement procedures, processes, and routines that provide suitably detailed reports in an accurate, consistent, and timely manner. In a management information system, modern, computerized systems continuously gather relevant data, both from inside and outside an organization. This data is then processed, integrated, and stored in a centralized database (or data warehouse) where it is constantly updated and made available to all who have the authority to access it, in a form that suits their purpose.
  5. 5. MIS: Management Information SystemMIS (management information systems) is a general term for the computer systems in an enterprise that provide information about its business operations. Its also used to refer to the people who manage these systems. Typically, in a large corporation, "MIS" or the "MIS department" refers to a central or centrally-coordinated system of computer expertise and management, often including mainframe systems but also including by extension the corporations entire network of computer resources.
  6. 6. WHY INFORMATION SYSTEMS?The Competitive Business Environment and the Emerging Digital FirmFour powerful worldwide changes thathave altered the business environment:1. Emergence of the Global Economy2. Transformation of Industrial Economies3. Transformation of the Business Enterprise4. The Emerging Digital Firm
  7. 7. WHY INFORMATION SYSTEMS?The Competitive Business Environment and the Emerging Digital Firm Emergence of the Global Economy  Management and control in a global marketplace  Competition in world markets  Global work groups  Global delivery systems
  8. 8. WHY INFORMATION SYSTEMS?The Competitive Business Environment and the Emerging Digital Firm Transformation of Industrial Economies  Knowledge- and information-based economies  Productivity  New products and services  Knowledge: a central productive and strategic asset
  9. 9. WHY INFORMATION SYSTEMS?The Competitive Business Environment and the Emerging Digital Firm Transformation of Industrial Economies  Time-based competition  Shorter product life  Turbulent environment  Limited employee knowledge base
  10. 10. WHY INFORMATION SYSTEMS?Labor Force Composition 1900-1997 Figure 1-1
  11. 11. WHY INFORMATION SYSTEMS?The Competitive Business Environment and the Emerging Digital Firm Transformation of the Business Enterprise  Flattening  Decentralization  Flexibility  Location independence  Low transaction and coordination costs  Empowerment  Collaborative work and teamwork
  12. 12. WHY INFORMATION SYSTEMS?The Competitive Business Environment and the Emerging Digital Firm Emergence of the Digital Firm  Digitally-enabled relationships with customers, suppliers, and employees  Core business processes accomplished via digital networks  Digital management of key corporate assets  Rapid sensing and responding to environmental changes
  13. 13. WHY INFORMATION SYSTEMS? What Is an Information System?A set of interrelated components that collect (or retrieve), process, store, and distributeinformation to support decision making andcontrol in an organization
  14. 14. WHY INFORMATION SYSTEMS? What Is an Information System? Data: Streams of raw facts representing events such as business transactions Information: Clusters of facts that are meaningful and useful to human beings in the processes such as making decisions
  15. 15. WHY INFORMATION SYSTEMS?What Is an Information System? Data and Information Figure 1-2
  16. 16. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Activities in an Information SystemINPUT PROCESS OUTPUT FEEDBACK
  17. 17. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Functions of an Information System Figure 1-3
  18. 18. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Computer-Based Information System (CBIS) Rely on computer hardware and software Processing and disseminating information
  19. 19. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Formal Systems Fixed definitions of data, procedures Collecting, storing, processing, disseminating, using data
  20. 20. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? A Business Perspective on Information Systems An organizational and management solution Based on information technology To a challenge posed by the environment
  21. 21. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Information Systems ORGANIZATIONS TECHNOLOGY INFORMATION SYSTEMS MANAGEMENT Figure 1-4
  22. 22. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? A Business Perspective on Information Systems Information systems literacy: Broad-based understanding of information systems that includes behavioral knowledge about organizations and individuals using information systems as well as technical knowledge about computers. Computer literacy: Knowledge about information technology, focusing on under-standing how computer-based technologies work
  23. 23. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Major Business Functions Sales and marketing Manufacturing Finance Accounting Human resources
  24. 24. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? OrganizationsKey Elements: People: Managers, knowledge workers, data workers, production or service workers Structure: Organization chart , groups of specialists, products, geography
  25. 25. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Organizations Operating procedures: Standard operating procedures (SOP, rules for action) Politics: Power to persuade, get things done Culture: Customs of behavior
  26. 26. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? ManagementLevels: Senior managers: make long-range strategic decisions about products and services Middle managers: Carry out the programs and plans of senior management Operational managers: monitor the firm’s daily activities
  27. 27. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Computer TechnologyTools managers use to cope with change Hardware: Physical equipment Software: Detailed preprogrammed instructions Storage: Physical media for storing data and the software
  28. 28. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Computer Technology Communications Technology: transfers data from one physical location to another Networks: link computers to share data or resources
  29. 29. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS TECHNICAL APPROACHES COMPUTER OPERATIONS SCIENCE RESEARCH MANAGEMENT SCIENCE MIS SOCIOLOGY PSYCHOLOGY POLITICAL SCIENCEBEHAVIORAL APPROACHES Figure 1-5
  30. 30. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS Socio-Technical SystemsOptimize systems performance: Technology and organization Organizations mutually adjust to one another until fit is satisfactory
  31. 31. Essentials of Management Information Systems Chapter 1 Managing the Digital FirmCONTEMPORARY APPROACHES TO INFORMATION SYSTEMS Socio-technical Systems Figure 1-6 SOURCE: Liker, et al, 1987
  32. 32. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRMThe Interdependence Between Organizations and Information Systems Figure 1-7
  33. 33. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm THE NETWORK REVOLUTION AND THE INTERNET The Widening Scope of Information Systems 1950s: Technical changes 60s-70s: Managerial controls 80s-90s: Institutional core activitiesGrowing Importance
  34. 34. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm THE NETWORK REVOLUTION AND THE INTERNETThe Widening Scope of Information Systems Figure 1-8
  35. 35. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM What You Can Do on the Internet Communicate and collaborate Access information Participate in discussions Supply information Find entertainment Exchange business transactions
  36. 36. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM New Options for Organizational Design Flattening organizations Separating work from location Reorganizing work-flows Increasing flexibility Redefining organizational boundaries
  37. 37. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRMFlattening Organizations Information Systems Figure 1-9
  38. 38. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRMRedesigned Work Flow For Insurance Underwriting Figure 1-10
  39. 39. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM The Digital Firm Electronic commerce Electronic business Electronic market: Information systems links, buyers and sellers to exchange information, products, services, payments
  40. 40. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM Figure 1-11
  41. 41. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM Electronic Commerce Internet links buyers, sellers Lower transaction costs Goods and services advertised, bought, exchanged worldwide Business-to-business transactions increasing
  42. 42. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM Electronic Business Internet: Business builds private, secure network E-mail, Web documents, group software: Extends effective communication and control Extranet: Extension of intranet to authorized external users
  43. 43. Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRMInformation Architecture and Information Technology Infrastructure Figure 1-12
  44. 44. Chapter 1 MANAGING THE DIGITAL FIRM

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