Business Information Systems Chapter 1

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Questions and Answers

What is a primary input in UPS's package tracking system?

Weather data

Customer feedback

Delivery address (correct)

Package weight

Which technology is most likely not used by UPS in their operations?

Blockchain for transactions

Telegraph systems for communication (correct)

Aerial drones for delivery

Big data analytics

How does UPS’s use of big data primarily support their business strategy?

By focusing exclusively on domestic shipping

By predicting package delivery times more accurately (correct)

By reducing the workforce in delivery processes

By improving customer service through enhanced communication

Which business objective is addressed by UPS’s information systems?

Enhancing supply chain visibility Signup and view all the answers

What output does UPS’s package tracking system provide to its users?

Estimated delivery time Signup and view all the answers

What is the first step in the activities of an information system?

Input Signup and view all the answers

Which activity in an information system converts raw data into a meaningful form?

Processing Signup and view all the answers

What role does feedback play in an information system?

It helps to evaluate or correct the input stage. Signup and view all the answers

Who interacts with the organization and its information systems as environmental actors?

Competitors, stockholders, and suppliers Signup and view all the answers

What is the primary function of an information system?

To collect, process, store, and distribute information Signup and view all the answers

Which of the following best distinguishes information from data?

Information consists of processed raw facts. Signup and view all the answers

Which of the following statements about the components of an information system is correct?

Input, processing, and output are the three basic activities of an information system. Signup and view all the answers

What are the main components of the technology dimension of information systems?

Networking technology, IT infrastructure, and telecommunications Signup and view all the answers

Which statement about IT infrastructure is true?

It provides a platform on which systems are built. Signup and view all the answers

Which example illustrates the processing of data into meaningful information?

The total sales revenue derived from several transactions Signup and view all the answers

What are the three principal levels in a business organization?

Senior management, middle management, operational management Signup and view all the answers

Which group typically interacts with middle management to implement strategies?

Scientists and knowledge workers Signup and view all the answers

What is the main role of managers in regards to information systems?

To set organizational strategy for business challenges Signup and view all the answers

What reflects the separation of business functions in an organization?

Unique business processes among various functions Signup and view all the answers

Which level of management is evaluated on performance related to information systems?

All levels of management Signup and view all the answers

What is one of the strategic business objectives that firms aim to achieve through information systems?

Operational excellence Signup and view all the answers

Which of the following is an example of how information systems can enable new business models?

Apple’s iPad Signup and view all the answers

How do information systems contribute to customer and supplier intimacy?

By improving communication and service Signup and view all the answers

What is the primary goal of operational excellence in business information systems?

To enhance efficiency and profitability Signup and view all the answers

In what way do information systems help with improved decision making?

By offering real-time data and analytics Signup and view all the answers

What is a key factor in achieving competitive advantage through information systems?

Leveraging unique technological capabilities Signup and view all the answers

What role do information systems play in a company's survival in the market?

They allow adaptation to market changes and technological advancements. Signup and view all the answers

What does the business model describe in relation to information systems?

How a company produces, delivers, and sells its goods or services Signup and view all the answers

What is a key consequence of lacking accurate information in business management?

Overproduction and misallocation of resources Signup and view all the answers

How can information systems provide a competitive advantage?

By delivering better performance and superior products Signup and view all the answers

What role do information technologies play in the survival of a business?

They address industry-level changes and government regulations Signup and view all the answers

Why might investing in information technology not guarantee good returns for a company?

Returns from system investments can vary significantly among firms Signup and view all the answers

What system does Verizon use to enhance decision-making?

A web-based digital dashboard with real-time data Signup and view all the answers

Which of the following is NOT a potential negative outcome of poor decision-making due to inaccurate information?

Increased production efficiency Signup and view all the answers

What is one of the main challenges for managers when accurate data is unavailable?

They often rely on forecasts and best guesses Signup and view all the answers

What is a vital benefit of intimacy with suppliers for businesses utilizing information systems?

It allows for more accurate input and lower costs Signup and view all the answers

Study Notes

Chapter 1: Business Information Systems in Your Career

UPS uses information technology (I.T.) to compete globally
Videos are available to learn about how UPS uses big data and overnight shipping
Input, processing, and outputs of UPS package tracking system are discussed

Dimensions of UPS tracking system

Organizational: Procedures for tracking packages, managing inventory, and providing information
Management: Monitoring service levels, and costs
Technology: Handheld computers, bar-code scanners, networks, desktop computers, and more

Information Technology Capital Investment

Information technology (IT) capital investment (hardware, software, and communications equipment) grew from 32% to 52% of all invested capital between 1980 and 2009

The Interdependence Between Organizations and Information Technology

A growing interdependence exists between a firm's information systems and its business capabilities.
Changes in strategy, rules, and business processes often require changes in hardware, software, databases, and telecommunications.
What an organization wants to do can be affected by the capabilities of its systems.

Technology dimension of information systems

Computer hardware and software
Data management technology
Networking and telecommunications technology (networks, the internet, intranets, extranets, World Wide Web)
IT infrastructure (platform on which systems are built)

Information system

Set of interrelated components
Collects, processes, stores, and distributes information; supports decision-making, coordination, and control
Data are raw facts, whereas information is data shaped into a meaningful form.

Data and Information

Raw data from a supermarket checkout counter can be processed and organized into meaningful information (e.g., total unit sales of a specific store).

Three Activities of Information Systems

Input: Capturing raw data from an organization or external environment
Processing: Converting raw data into meaningful form
Output: Transferring processed information to people or activities that use it

Feedback

Output returned to appropriate organization members for evaluating and correcting the input stage.

Functions of an Information System

Information systems contain information about an organization and its surrounding environment.
Input, processing, and output produce the information organizations need.
Feedback is returned to appropriate people or activities to evaluate and refine input.
Environmental actors (customers, suppliers, competitors, stockholders, and regulatory agencies) interact with the organization's systems.

Levels in a Firm

Business organizations are hierarchies consisting of senior management, middle management and operational management.
Information systems serve each of these levels.

Functional Managers

Separation of business functions (sales, marketing, human resources, finance, accounting, manufacturing, and production).
Unique business processes.

Management Dimension of Information Systems

Managers set organizational strategies to respond to business challenges.
Managers are evaluated based on performance.
In addition, managers must act creatively (creation of new products, services, re-creating the organization, etc.)

Business perspective on information systems

Information systems are instruments for value creation.
Investments in information technologies lead to superior returns (productivity, revenue increases, etc.)

Business Information Value Chain

Raw data acquired and transformed through steps adding value to information.
Value of information systems based on better decisions, efficiency, and higher profits.
Calls attention to the organizational and managerial nature of information systems.

The Role of Information Systems in Business Today

Growing interdependence between the ability to use information technology and implementing corporate strategies (to achieve corporate objectives)
Businesses invest heavily in I.T. systems to achieve specific business objectives. (operational excellence, new products/services/business models, greater customer/supplier intimacy, improved decision making, competitive advantages, and survival)

Operational Excellence

Improvement of efficiency to attain higher profitability
Information systems, technology an important tool in achieving greater efficiency and productivity.
Walmart's Retail Link system links suppliers to stores for superior replenishment.

New Products, Services, and Business Models

Business model describes how a company produces, delivers, and sells a product or service to create wealth.
Information systems and technology are tools for creating new products, services, and business models (e.g., Apple's iPad, Google's Android OS, Netflix, etc.)

Customer and Supplier Intimacy

Serving customers well leads to returning customers, increasing revenues and profits.
Intimacy with suppliers allows them to provide vital inputs, which lowers costs (e.g., JCPenney's information system).

Improved Decision Making

Without accurate information, managers rely on forecasts, best guesses, and luck; leading to over/under production, misallocation of resources, poor response times, poor outcomes, and loss of customers (e.g., Verizon's Web-based digital dashboard).

Competitive Advantage

Delivering better performance and superior products.
Responding to customers and suppliers in real time (e.g., Apple, Walmart, and UPS).

Survival

Information technologies are becoming increasingly necessary for business (industry-level changes).
Examples include Citibank's ATMs and governmental regulations requiring record-keeping.

Investing in Technology

Investing in information technology doesn't guarantee good returns.
There is variability in returns from system investments.
Factors include adopting the right business model and investing in complementary assets (organizational and management capital).

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Description

Explore the role of information technology in enhancing business operations, particularly through the case study of UPS. This chapter discusses the interdependence between organizations and I.T., highlighting its impact on tracking systems and management strategies.