2. TODAY’S AGENDA
• Chapter 1
• Info Systems in Business
• Information Defined
• Data to Info
• Info Systems
• Problem Solving
• Careers in Info Systems
• Chapter 2
• Components of a Business
• Relationships
• Systems
• Supply Chain
• CRM
• Intranet/Extranet
• CIO
4. HOW INFORMATION SYSTEMS ARE
TRANSFORMING BUSINESS
• 183 million people shop online, 214 million research a product online, and 150
million bank online
• Internet advertising is growing around 15% per year. Facebook’s ad revenue hit
$25 billion in 2016, up from $12 billion in 2014 and Google’s online ad
revenues surpassed $79 billion in 2016.
• Businesses are required to store more data for longer periods
• must keep email messages for 5 years
• must keep chemical exposure data for 60 years
• Changes in technology result in changes in jobs/careers and how business is
conducted in general 10 jobs that didn’t exist 10 years ago
5. GLOBALIZATION CHALLENGES AND
OPPORTUNITIES
• Internet and global communications has greatly reduced
economic and cultural advantages of developed countries
• Drastic reduction of costs of operating and transacting on global scale
• Customers no longer rely on local businesses for product and services
• Developed countries compete with less developed world for jobs,
markets, resources, ideas
• Requires new understandings of skills, markets, opportunities
6. BUSINESS OBJECTIVES OF
INFORMATION SYSTEMS
• Operational excellence
• New products, services, and business models
• Customer and supplier intimacy
• Improved decision making
• Competitive advantage
• Survival
7. BUSINESS OBJECTIVES OF
INFORMATION SYSTEMS
• Operational Excellence
• Improved operational efficiency results in higher profitability
• Information systems and technologies help to improve higher levels of
efficiency and productivity
• Example:
• Wal-Mart is the most efficient store in the world as a result of its
RetailLink System which provides digital links between its suppliers and
stores
8. BUSINESS OBJECTIVES OF
INFORMATION SYSTEMS
• New products, services, and business models
• Information systems and technologies enable firms to create new
products, services, and business models
• A business model includes how a company produces, delivers, and sells
its products and services to create wealth
• Example:
• The music, travel, and newspaper industries have seen drastic changes
in business models
9. BUSINESS OBJECTIVES OF
INFORMATION SYSTEMS
• Customer and supplier intimacy
• Customers who are served well become repeat customers who purchase
more
• Close relationships with suppliers result in lower costs
• Example:
• The Mandarin Oriental in Manhattan uses IS to create an intimate
relationship with its customers, including keeping track of their
preferences
• JCPenney uses information systems to enhance its relationship with its
supplier of dress shirts in Hong Kong
10. BUSINESS OBJECTIVES OF
INFORMATION SYSTEMS
• Improved decision making
• A company’s bottom line can be hurt by managers being swamped with
data that are neither timely nor helpful, forcing them to use guesswork
• Real-time data have improved the ability of managers to make decisions
• Example:
• Verizon uses a Web-based digital dashboard to update managers with
real-time data on customer complaints, network performance, and line
outages
11. BUSINESS OBJECTIVES OF
INFORMATION SYSTEMS
• Competitive advantage
• Achieving one or more of the previously mentioned business objectives
often leads to competitive advantage
• Advantages over competitors include charging less for superior
products, better performance, and better response to suppliers and
customers
• Example:
• Apple, Walmart, and UPS are industry leaders because they know how to
use information systems to create a competitive advantage.
12. BUSINESS OBJECTIVES OF
INFORMATION SYSTEMS
• Survival
• Businesses may need to invest in information systems out of necessity
• Necessity arises from keeping up with competitors
• Necessity also arises from federal and state regulations
• Example:
• When Citibank introduced ATMs
• The Toxic Substances Control Act and the Sarbanes-Oxley Act
13. INFORMATION TECHNOLOGY VS.
INFORMATION SYSTEMS
• Information technology is the hardware and software a
business uses to achieve its objectives
• Information systems consists of interrelated components
(people, technology, business processes) working together to
collect, process, store, and disseminate information to support
decision making, coordination, control, analysis, and
visualization in an organization
14. DATA VS. INFORMATION
• Data are streams of raw facts representing events and
occurrences
• Information refers to data shaped into a meaningful and useful
form
15. INFORMATION SYSTEMS:
TURN DATA INTO INFORMATION
• Three activities in an information system produce the
information needed to make decisions, control operations,
analyze problems, and create new products or services:
• Input: captures raw data
• Processing: converts raw input into meaningful form
• Output: transfers processed information to those people or activities for
which it is needed
16. INFORMATION SYSTEMS:
TURN DATA INTO INFORMATION
Data
• Raw material
• Unformatted information
• Generally has no context
Information
• Processed material
• Formatted information
• Data given context
Individual time cards for
factory workers entered
into the payroll system
Examples
Department Labor Report,
Project Status Report,
Employee Payroll Checks
17. INFORMATION SYSTEMS LITERACY VS.
COMPUTER LITERACY
• Information systems literacy
• Includes behavioral and technical approach
• Computer literacy
• Focuses mostly on knowledge of technology
• Management information systems (MIS)
• Focuses on broader information systems literacy
• Issues surrounding the development, use, and impact of information
systems used by managers and employees
18. DIMENSIONS OF
INFORMATION SYSTEMS
Using information systems
effectively requires an
understanding of the
organization, people, and
information technology
shaping the systems. An
information system provides a
solution to important business
problems or challenges facing
the firm.
19. DIMENSIONS OF
INFORMATION SYSTEMS
• Organizations
• Technology changes organizations and vise versa
• Must know something about the structure, history, and culture of the
organization in order to understand how a specific organization uses
information systems
20. DIMENSIONS OF
INFORMATION SYSTEMS
• People
• Information systems are useless without skilled people to build,
maintain, and use/understand them
• Employee attitudes affect ability to use systems productively.
21. DIMENSIONS OF
INFORMATION SYSTEMS
• Technology
• IT Infrastructure: Foundation or platform that information systems built
on
• Computer hardware (Ch5)
• Computer software (Ch5)
• Data management technology (Ch6)
• Networking and telecommunications technology (Ch7)
• Internet and Web, extranets, intranets
• Voice, video communications
22. THE PROBLEM-SOLVING APPROACH
• Few business problems are simple or straightforward
• Information systems and technologies can provide solutions to
business challenges and problems.
• Most business problems involve a number of major factors that
can be categorized as organization, technology, and people
23. THE PROBLEM-SOLVING APPROACH
• Typical organizational problems
• Outdated business processes
• Unsupportive culture and attitudes
• Political in-fighting
• Turbulent business environment, change
• Complexity of task
• Inadequate resources
24. THE PROBLEM-SOLVING APPROACH
• Typical technology problems
• Insufficient or aging hardware
• Outdated software
• Inadequate database capacity
• Insufficient telecommunications capacity
• Incompatibility of old systems with new technology
• Rapid technological change
25. THE PROBLEM-SOLVING APPROACH
• Typical people problems
• Lack of employee training
• Difficulties of evaluating performance
• Legal and regulatory compliance
• Work environment, ergonomics
• Poor or indecisive management
• Lack of employee support and participation
• Wrong incentives
26. A MODEL OF THE
PROBLEM-SOLVING PROCESS
During implementation and thereafter,
the outcome must be continually
measured and the information about how
well the solution is working is fed back to
the problem solvers. In this way, the
identification of the problem can change
over time, solutions can be changed, and
new choices made, all based on
experience.
27. A MODEL OF THE
PROBLEM-SOLVING PROCESS
• Problem Identification
Must understand and agree:
• that a problem exists
• what the problem is
• what its causes are
• what can be done about it
28. A MODEL OF THE
PROBLEM-SOLVING PROCESS
• Solution Design
• Try to consider as many different solutions as possible
• Some may emphasize technology while others may emphasize change in
org and people
• Most successful solutions usually involve an integrated approach
29. A MODEL OF THE
PROBLEM-SOLVING PROCESS
• Solution Evaluation and Choice
• Factors to consider are:
• the cost of the solution
• the feasibility of the solution given existing resources and skills
• the length of time required to build and implement the solution.
• Buy-in by employees and managers is extremely important.
30. A MODEL OF THE
PROBLEM-SOLVING PROCESS
• Implementation
• Building or purchasing solution
• Testing solution, employee training
• Change management
• Measurement of outcomes
• Feedback, evaluation of solution
• Problem solving is a continuous process, not a single event
• Sometimes chosen solution doesn’t work or needs adjustment
31. THE IMPORTANCE OF CRITICAL
THINKING IN PROBLEM SOLVING
• Without critical thinking, it is easy to jump to conclusions, misjudge a
problem and waste resources
• Critical Thinking
• The sustained suspension of judgment with an awareness of multiple perspectives
and alternatives
• Four Elements of Critical Thinking:
• Maintaining doubt and suspending judgment
• Being aware of different perspectives
• Testing alternatives and letting experience guide
• Being aware of organizational and personal limitations
32. INFORMATION SYSTEMS
AND YOUR CAREER
• Success in today’s job market requires a broad set of skills
• Job candidates must have problem-solving skills as well as
technical skills to help organizations achieve their objectives
33. INFORMATION SYSTEMS SKILLS AND
KNOWLEDGE FOR ALL MAJORS
• Understand how IS are used to achieve business objectives
• Develop skills in analysis of information
• Be able to work with specialists and system designers who
build and implement IS
• Understand how IS can be used to meet business requirements
for reporting to government regulators and the public and how
information systems impact the ethical issues in their fields.
34. INFORMATION SYSTEMS ARE USED BY ALL
DEPARTMENTS
• Finance and Accounting
• Forecast revenues and business
activities
• Determine the best sources and uses
of funds
• Perform audits
• Manufacturing
• Process orders
• Develop production schedule
• Control inventory levels
• Monitor produce quality
• Sales and Marketing
• Analyze product, site, promotion,
price
• Manage relationships with customers
• Human Resource
• Manage the recruiting process
• Administer performance test and
monitor employee productivity
• Manage compensation and benefits
packages
35. CAREER OUTLOOK FOR
INFORMATION SYSTEMS FIELD
• Occupations in information systems are expected to increase
by 13% from now until 2026, which is faster than the average
for all occupations.
Link To: Bureau of Labor Statistics
36. IN-CLASS ACTIVITY
• In your opinion, how will information systems play an
important role in your career when you enter the workforce?
38. COMPONENTS OF A BUSINESS
• A business is a formal organization that makes products or
provides a service in order to make a profit.
Organizing a
Business: Four Basic
Business Functions
Fig. 2.1
39. COMPONENTS OF A BUSINESS
• Business Process:
• A logically related set of activities that define how specific business tasks are performed.
• Some processes tied to functional area
• Sales and marketing: identifying customers
• Some processes are cross-functional
• Fulfilling customer order
• Examples of Business Processes:
• What tasks does each employee perform, in what order, and on what schedule?
• How are raw materials transformed into products?
• How are orders fulfilled?
• How are bills paid?
• How are products marketed?
• How are employees hired?
40. COMPONENTS OF A BUSINESS
The Order Fulfillment Process
Fig 2.2 Fulfilling a customer order involves a complex set
of steps that requires the close coordination of the sales,
accounting, and manufacturing functions.
41. COMPONENTS OF A BUSINESS
• How IT Enhances Business Processes:
• Automation of manual processes
• Change the flow of information
• Replace sequential processes with simultaneous activity
• Transform how a business works
• Drive new business models
42. LEVELS IN A FIRM
• Firms coordinate work of
employees by developing a
hierarchy in which authority is
concentrated at the top
• Each group has different needs
for information
• Each group needs different
information systems to
automate activities or assist in
decision making Figure 2-3
43. TYPES OF BUSINESS IS FROM A
CONSTITUENCY PERSPECTIVE
Operational Level
• Activities
• Day-to-day business processes
• Interactions with customers
• Decisions
• Day-to-day decisions that are highly structured and recurring.
• Use established policies and procedures.
• Can be programmed directly into operational IS
• Require little or no human intervention
44. TYPES OF BUSINESS IS FROM A
CONSTITUENCY PERSPECTIVE
Operational Level
• Transaction Processing System
• Performs and records the daily routine transactions necessary to conduct
business
• Major producers of information for other systems
• Highly central to business operations and functioning
45. TYPES OF BUSINESS IS FROM A
CONSTITUENCY PERSPECTIVE
Managerial Level
• Activities
• Monitoring and controlling of operational activities
• Providing information to higher levels of the organization (executive
information support).
• Decisions
• Semi-structured
• Solutions and problems are not clear cut
• Some procedures to follow but no specific recommendations
• Often require some human intervention in the form of judgment and
expertise
46. TYPES OF BUSINESS IS FROM A
CONSTITUENCY PERSPECTIVE
Managerial Level
• Management Information Systems
• report on the company’s basic operations using data supplied by TPS
• provide middle managers with reports on firm’s performance – to
monitor firm and help predict future performance
• support the ongoing, recurring, decision-making activities
47. TYPES OF BUSINESS IS FROM A
CONSTITUENCY PERSPECTIVE
Managerial Level
• Decision Support Systems
• focus on problems that are unique and rapidly changing, for which
procedures for arriving at a solution may not be known in advance
• use information from TPS, MIS, and external sources (competitors prices)
• designed to be an interactive decision aid (whereas TPS, MIS, and EIS are
passive). Can conduct “What-if” analysis: changing one or more
variables in the model to observe the resulting effect (e.g. What is
impact on production schedule if December sales doubled?)
48. TYPES OF BUSINESS IS FROM A
CONSTITUENCY PERSPECTIVE
Executive Level
• Activities
• Strategic planning
• Responses to strategic issues
• Decisions
• Usually unstructured
• Problems are complex and nonroutine
• Few or no procedures to follow for a given situation
• Broad and long-term ramifications
• Require human intervention in the form of judgment, expertise, and insight
49. TYPES OF BUSINESS IS FROM A
CONSTITUENCY PERSPECTIVE
Executive Level
• Executive Support Systems
• provide information to executives in a very highly aggregated form to
help address strategic issues and long-term trends
• incorporate data about external events, as well as summarized data from
MIS and DSS
50. RELATIONSHIP OF SYSTEMS
TO ONE ANOTHER
Fig 2-13 The various
types of systems in the
organization have
interdependencies. TPS
are major producers of
information that is
required by many other
systems in the firm,
which, in turn, produce
information for other
systems. These
different types of
systems have been
loosely coupled in most
organizations.
51. SYSTEMS THAT
SPAN THE ENTERPRISE
Enterprise Applications
• Enterprise applications are systems that allow companies to integrate
information across operations on a company-wide basis
• Includes systems that focus on internal operations as well as business
activities that occur outside organizational boundaries.
• They include:
• Enterprise systems
• Supply chain management systems
• Customer relationship management systems
• Knowledge management systems
52. SYSTEM EVOLUTION
System Types
System Evolution
Standalone Systems
Integrated Systems
(Intraorganizational)
Integrated Systems
(Interorganizational)
Figure from Jessup and Valacich,
Information Systems Today: Why IS Matters
53. LEGACY OR STAND-ALONE SYSTEMS
• A single system or group of systems, designed to each support
one or a few business functions (e.g., accounting system or a
manufacturing system, etc.)
• Characteristics
• Little or no integration with other organizational systems. If integration
exists, it is usually in batch (e.g., the accounting system gets updates
from manufacturing system once a day or week)
• Organizational fit may be better than integrated packages due to the
focus on one function and that they have been highly modified over time
• Customization and the age of these systems make them difficult to
support due to the complexity, use of older or obscure languages, etc.
54. ENTERPRISE SYSTEMS
(AKA: ENTERPRISE RESOURCE PLANNING (ERP)
SYSTEMS)
Definition:
• System that integrates data from key business processes into single
system
Characteristics:
• Highly integrated systems sharing a common data warehouse
• Speed communication of information throughout firm
• Enable greater flexibility in responding to customer requests, and
greater accuracy in order fulfillment
• Enable managers of large firms to assemble overall view of operations
55. ENTERPRISE SYSTEMS
Enterprise systems feature
a set of integrated software
modules and a central
database that enables data
to be shared by many
different business
processes and functional
areas throughout the
enterprise
56. ENTERPRISE SYSTEMS
• Business Value of Enterprise Systems
• Increase operational efficiency
• Support decision making by providing firm-wide
information to managers
• Enforce standard practices
• Help to provide rapid responses to customer requests
• Include analytical tools to evaluate overall performance
57. ENTERPRISE SYSTEMS
• ERP Vendor Stats
• 21% of companies who responded to a 2015 survey on their
ERP implementation experience characterized their recent ERP
rollout as a failure (15 Famous ERP Disasters)
58. INTERORGANIZATIONAL SYSTEMS
• Systems that communicate across organizational boundaries who’s
goal is to streamline information flowing from one company’s
operations to another
• Includes Customer Relationship Management and Supply Chain
Management systems
• Characteristics:
• Highly integrated with internal systems (ERP) through the use of interfaces
and specialty software
• Usually packaged applications that are supplied and supported by the ERP
vendor or other third party system integrators
59. SUPPLY CHAIN
• A network of organizations and business processes for:
• procuring raw materials
• transforming raw materials into intermediate and finished products
• distributing the finished products to customers.
• Upstream supply chain
• processes for managing relationships with firm’s suppliers, and
suppliers’ suppliers
• Downstream supply chain
• processes for distributing and delivering products to final customers
60. NIKE’S SUPPLY CHAIN
Supplier for rubber
Supplier for chemicals
Supplier for molds
Fig 8-2 This figure
illustrates the major
entities in Nike’s
supply chain and the
flow of information
upstream and
downstream to
coordinate the
activities involved in
buying, making, and
moving a product.
Shown here is a
simplified supply
chain, with the
upstream portion
focusing only on the
suppliers for
sneakers and
sneaker soles.
61. SUPPLY CHAIN MANAGEMENT (SCM)
SYSTEMS
• Used to manage relationships with suppliers, purchasing firms, distributors,
and logistics companies.
• Allow sharing of information about orders, production, inventory levels, and
so on
• Allow managers to make better decisions about how to organize and
schedule sourcing, production, and distribution
• Goal - to move correct amount of product from source to point of
consumption as quickly as possible and at lowest cost
62. CUSTOMER RELATIONSHIP MANAGEMENT
(CRM) SYSTEMS
• Used to manage relationship with customers.
• Coordinate business processes that deal with customers in sales,
marketing, and customer service
• Goals:
• Optimize revenue
• Improve customer satisfaction
• Increase customer retention
• Identify and retain most profitable customers
• Increase sales
63. KNOWLEDGE MANAGEMENT SYSTEMS (KMS)
• Knowledge Assets
• All underlying skills, routines, practices, principles, formulas, methods,
heuristics, and intuitions whether explicit or tacit
• Knowledge Management
• The business processes an organization develops for creating, storing,
transferring, and applying knowledge in order to gain the greatest value
from its knowledge assets
• Knowledge Management Systems
• Manage the capture, storage, distribution, and application of knowledge
so that it can be leveraged for strategic benefit
64. ENTERPRISE APPLICATION CHALLENGES
• Time consuming and expensive
• Require sweeping changes to business processes
• SCM systems require multiple organizations to share
information and business processes
• Difficult to switch vendors
• Need to understand exactly how your business uses its data
and how data should be organized
65. INTRANETS AND EXTRANETS
Technology platforms that increase integration and expedite the flow of
information
• Intranets
• An internal, private network using Internet standards to securely transmit information
within the organization.
• Limits viewing access to authorized users within the organization
• Extranets
• Secure networks that provide customers, suppliers, and vendors with access to
internal systems (i.e., intranets that are extended to authorized users outside the
company)
• Facilitate collaboration with suppliers and customers on product design, production,
marketing and sales
68. WHAT IS COLLABORATION?
• Working with others to achieve shared and explicit goals.
• Today, businesses rely on a collaborative culture and are more dependent
on teams of employees to achieve the organization’s mission
• Growing Importance of Collaboration:
• Changing nature of work
• Growth of professional work
• Changing organization of the firm
• Changing scope of the firm
• Emphasis on innovation
• Changing culture of work
69. WHAT IS SOCIAL BUSINESS?
•Use of social networking platforms to engage employees, customers,
suppliers
•Create conversations to strengthen bonds
•Requires information transparency
•Seen as way to drive operational efficiency, spur innovation,
accelerate decision making
70. BUSINESS BENEFITS OF COLLABORATION
AND SOCIAL BUSINESS
• Productivity
• Quality
• Innovation
• Customer Service
• Financial Performance
71. TOOLS AND TECHNOLOGIES FOR
COLLABORATION AND TEAMWORK
• E-mail and instant messaging (IM)
• Social networking
• Wikis
• Virtual worlds
• Internet-based collaboration environments
• Virtual meeting systems (e.g., Google Hangouts, Amazon Chime, Skype, Adobe Connect)
• Google Tools (e.g., Google Drive, Docs, Apps, Sites)
• Microsoft SharePoint & IBM Notes
• Enterprise Social Networking Tools (specialized tools like Salesforce Chatter, MS Yammer, and
Facebook Workplace)
72. THE INFORMATION SYSTEMS FUNCTION IN
BUSINESS
• The information systems department is the formal organizational unit
responsible for maintaining the hardware, software, data management
technology, and networks that comprise the firm’s IT infrastructure.
• The information systems department consists of:
• Programmers
• System Analysts
• Information System Managers
• Chief Information Officer (CIO)
• Chief Security Office (CSO)
• Chief Privacy Officer (CPO)
• Chief Data Officer (CDO)
• Chief Knowledge Officer (CDO)
• Network Administrators / Database Administrators
• End Users
73. THE ROLE OF THE CIO
Strong business
background and IS
expertise
CEO
Chief Executive
Officer
COO
Chief Operations
Officer
CFO
Chief Financial
Officer
CIO
Chief Information
Officer
• Manages IT Department and Operations
• Forecasts IT Needs from Business Strategy
• Sets Direction for IT Architecture
• Plans, Designs and Delivers IT throughout the firm
74. ERP DEFINITION AND SOLUTIONS
1. List the FIVE reasons (i.e., benefits) that attract organizations to ERP?
2. What is the most common reason that companies walk away from
multimillion-dollar ERP projects? What might a company choose to do
rather than walk away from the ERP project?
3. Which of the hidden costs associated with ERP implementations is
considered the most UNDER-estimated?
4. Why do ERP projects fail so often?
5. What are the three main selling points for on-demand and software-as-a-
service ERP applications?
