Chapter 1 - Information Systems in Global Business Today PDF

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Chapter 1 - Information Systems in Global Business Today How Information Systems Are Transforming Business ● Increase in use of wireless technologies ● More company websites, more online shopping ● Growing business use of “big data” ● Growth in cloud computing ● Supply chain optimization and just-in-time inventories ● Shifts in media; more news delivered online ● E-commerce and Internet advertising expand

The Emerging Digital Firm ● Nearly all of the organization’s significant business relationships with customers, suppliers and employees are digitally enabled and mediated ● Core business processes are accomplished through digital networks that span and link organizations Interdependence Between Organizations and Information Systems

Strategic

Business Objectives of Information Systems What makes information systems so essential today? Operational Excellence - Improve efficiency of operations to attain higher profitability - Information systems and technologies are important tools for achieving greater efficiency and productivity - Walmart’s Retail Link system connects suppliers to stores for superior replenishment system New Products, Services, and Business Models - Describes how company produces, delivers, and sells product or service to create wealth - Information systems and technology a major enabling tool for new products, services, business models - Examples: iPod, iTunes, Uber Customer and Supplier Intimacy - Serving customers well leads to customers returning, which raises revenues and profits - High-end hotels use computers to track customer preferences and use these data to monitor and customize room environment - Canadian clothing manufacturer Nygard used computers to inform suppliers of its needs; inventory costs are near zero. Improved Decision Making - Without accurate information, managers must use forecasts, best guesses, luck - This 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 Survival Information Technology ● Often used as a synonym for information systems ● Typically refers to the technical components of information systems ● All the hardware and software that a firm needs to use in order to achieve its business objectives. What is an Information System? ● A set of interrelated components that collect (or retrieve), process, store, and

distribute information to support decision making and control in an organization ● Consider both technology and a business perspective Information System: four activities produce information that organizations need 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. Feedback: output that allows evaluation and correction Organizations ● Information Systems are an integral part of organizations ● Key elements of organizations include: people, structure, business processes, politics, culture Levels in a Firm ● Senior Management ● Middle Management - Scientists & Knowledge Workers ● Operational Management - Production & Service Workers, Data Workers Major Business Functions ● Sales and Marketing: selling the organization’s product and services ● Manufacturing and Production: producing and delivering product and services ● Finance and Accounting: managing the organization's financial assets and maintaining the organization’s financial records ● Human Resources: attracting, developing and maintaining the organization’s labour force; maintaining employee report Management Dimension of Information Systems ● Managers set organizational strategy for responding to business challenges ● In addition, managers must act creatively: - Creation of new products and services - Occasionally re-creating the organization

Computer Hardware: physical equipment used for input, process & output activities Computer Software: detailed, pre-programmed instructions that control and coordinate the computer hardware Data Management Technology: software governing the organization of data

Networking & Telecommunications Technology: links the various pieces of hardware and transfer data from one physical location to another IT Infrastructure: provides platform on which the system is built Positives of Information Systems ● information system is instrument for creating value ● Investments in information technology will result in superior returns: - Productivity increases - Revenue increases - Superior long-term strategic positioning Business Information Value Chain

Complementary Assets: organizational capital and the right business model ● Why can some companies achieve much better results using information systems while others cannot? - supportive values - structures - behavioural patterns Variation in Returns on Information Technology

Complementary Assets: Organizational Capital and the Right Business Model ● Assets required to derive value from a primary investment ● Firms supporting technology investments with investment in complementary assets receive superior returns ● Example: Invest in technology and the people to make it work properly Complementary Assets ● Examples of Organizational Assets - appropriate business model - efficient business processes ● Examples of Managerial Assets - incentives for management innovation - teamwork and collaborative work environments ● Examples of Social Assets - the internet and telecommunications infrastructure - technology standards Contemporary Approaches to Information Systems

Technical Approach ● Emphasizes mathematically based models ● Computer science, management science, operations research Behavioural Approach ● Behavioural issues (strategic business integration, implementation, etc.) ● Psychology, economics, sociology

Sociotechnical Systems ● Management Information Systems - combines computer science, management science, operations research, and practical orientation with behavioral issues ● Four Main Actors - suppliers of hardware and software - business firms - managers and employees - firm’s environment (legal, social, cultural context) ● Sociotechnical View - optimal organizational performance achieved by jointly optimizing both social and technical systems used in production - helps avoid purely technological approach...