Information Systems in Global Business Today

Information Systems in Global Business Today

• Global spending on information technology (IT) and IT services was nearly $3.8 trillion in 2019 with $160 billion spent on management consulting and services.
• Changes in organization, management and culture are often required for companies to fully utilize the value of their IT investments.

What’s New in Management Information Systems

• Cloud computing, big data, Internet of Things, a mobile digital platform, artificial intelligence (AI) and machine learning, and the use of social networks for business objectives are all examples of IT innovations.
• Online streaming and downloadable video are examples of new business models, including Netflix, Apple TV Channels, and Amazon.
• E-commerce worldwide expanded to nearly $3.6 trillion in 2019, with social commerce spurred by the growth of mobile platforms.
• Mobile retail e-commerce grew more than 20 percent a year, reaching almost $300 billion in 2020.
• Managers are becoming more mobile, using social networks and other collaboration tools, and business intelligence applications are accelerating.
• Organizations are becoming more collaborative, with less emphasis on hierarchy and structure while placing more emphasis on competencies and skills.
• This shift has resulted in higher-speed and more accurate decision making based on data and analysis, a greater willingness to interact with consumers on social media, and a better understanding of the importance of IT.

Globalization Challenges and Opportunities

• The internet and global communications have drastically changed how and where businesses operate.
• There has been a drastic reduction in the cost of operating and transacting on a global scale, leading to increased competition for jobs, markets, resources, and ideas.
• This has also led to growing interdependence of global economies, requiring new understandings of skills, markets, and opportunities.

The Emerging Digital Firm

• In a fully digital firm, significant business relationships are digitally enabled and mediated.
• Digital firms offer greater flexibility in organization and management.
• Digital firms utilize time shifting and space shifting to optimize productivity.

Strategic Business Objectives of Information Systems

• Organizations heavily invest in information systems to achieve six strategic business objectives: operational excellence, new products, services, and business models, customer and supplier intimacy, improved decision making, competitive advantage, and survival.
• The ability to use information technology is directly intertwined with the ability to implement corporate strategies and achieve corporate goals.

Operational Excellence

• Improved efficiency leads to higher profits.
• Information systems and technologies help improve efficiency and productivity.
• Walmart is an example of how companies can combine information systems and best business practices to achieve operational efficiency.

New Products, Services, and Business Models

• Information systems and technologies enable businesses to create new products, services, and business models.
• A business model describes how a business produces, delivers, and sells its products and services.
• Apple's transformation of the music distribution model with iTunes and its constant innovation of products like the iPod, iPhone, iPad, and others are examples of this principle.

Customer and Supplier Intimacy

• Customers who are served well become repeat customers who purchase more.
• Mandarin Oriental Hotel uses IT to foster an intimate relationship with its customers by keeping track of their preferences.
• Close relationships with suppliers result in lower costs.
• Mandarin Oriental Hotel and J C Penney use IT to enhance their relationships with suppliers.

Improved Decision Making

• Without accurate information, managers must rely on forecasts, best guesses, and luck, which can lead to misallocation of resources, inventory, and employees.
• Real-time data improves the ability of managers to make better decisions.
• Verizon’s web-based digital dashboard provides managers with real-time data on customer complaints, network performance, line outages, etc.