Business Strategies and Digital Transformation

Firms and Organizations Change

• Firms are becoming more collaborative and less hierarchical, focusing on competencies and skills.
• Data and analytics are driving faster and more accurate decision-making.
• Businesses are more willing to interact with consumers through social media platforms.
• There's a greater understanding of the importance of Information Technology (IT) in business operations.

Globalization Challenges and Opportunities

• The internet and global communications have significantly impacted how and where businesses operate.
• The cost of operating and transacting globally has drastically decreased.
• There's increased competition for jobs, markets, resources, and ideas.
• Global economies are becoming increasingly interdependent.
• Understanding global skills, markets, and opportunities is essential.

The Emerging Digital Firm

• A fully digital firm relies heavily on digital networks for core business processes and relationships.
• Key corporate assets are managed digitally.
• Digital firms offer greater flexibility in organization and management, allowing for time and space shifting.

Strategic Business Objectives of Information Systems

• Information Technology (IT) and corporate strategies have become intertwined to achieve business goals.
• Firms invest heavily in information systems to achieve six strategic business objectives:
  • Operational excellence: Improving efficiency and productivity.
  • New products, services, and business models: Enabling the creation of new offerings.
  • Customer and supplier intimacy: Fostering strong relationships with customers and suppliers.
  • Improved decision making: Providing real-time data for better managerial decisions.
  • Competitive advantage: Gaining an edge over competitors through IT advantage.
  • Survival: Ensuring the business remains competitive in the digital age.

How Information Systems are Transforming Business

• Global spending on IT and IT services reached nearly $3.8 trillion in 2019.
• Firms need to adapt organizational, management, and cultural practices to realize the full value of IT investments.

What's New in Management Information Systems

• IT Innovations: Cloud computing, big data, Internet of Things, mobile digital platforms, Artificial Intelligence (AI), machine learning, and social networks are impacting businesses.
• New Business Models: Online streaming and downloadable video services are disrupting traditional media distribution.
• E-commerce Expansion: Global e-commerce expanded to nearly $3.6 trillion in 2019, with mobile commerce growing rapidly.
• Management Changes: Managers are becoming more mobile, utilizing social networks, collaboration tools, and business intelligence applications.

Operational Excellence

• Information systems and technologies improve efficiency and productivity.
• Walmart exemplifies operational efficiency, reaching over $524 billion in sales in 2019 through its efficient digital system.
• Walmart's efficient digital links with suppliers contribute to its position as the most efficient retail store globally.

New Products, Services, and Business Models

• Information systems empower firms to create new products, services, and business models.
• A business model defines how a company produces, delivers, and sells its products and services.
• Apple, through innovations such as iTunes, iPod, iPhone, and iPad, has transformed music distribution and technology.

Customer and Supplier Intimacy

• Strong customer relationships lead to repeat customers and increased purchases.
• Mandarin Oriental Hotel uses IT to personalize customer experiences, keeping track of preferences.
• Close supplier relationships result in lower costs for businesses.
• Mandarin Oriental Hotel and J.C. Penney demonstrate the use of IT to enhance relationships with suppliers.

Improved Decision Making

• Real-time data enables managers to make informed decisions, improving resource allocation, inventory management, and employee deployment.
• Verizon uses a web-based digital dashboard for managers to access real-time data on customer complaints, network performance, and outages.

Explore the dynamic landscape of modern firms and organizations as they embrace collaboration, data-driven decision-making, and digital innovation. This quiz covers the challenges and opportunities presented by globalization and the emergence of fully digital firms. Test your understanding of how technology shapes business operations today.