Information Systems Overview Quiz

ITM 100 Class 1: Information Systems in Business Today

• The course is titled "Information Systems in Business Today", adapted from "Management Information Systems: Managing the Digital Firm" 17th Edition by Kenneth C. Laudon and Jane P. Laudon.
• Learning Objectives include:
  • How information systems transform business and their importance.
  • Defining information systems, their components (management, organization, technology), and how they work.
  • Academic disciplines used to study information systems, and their contributions.

Information Technology Capital Investment

• IT spending (equipment, software, and R&D) is a significant portion (around 46.8%) of total nominal GDP.
• Global spending on IT and IT services reached nearly $3.8 trillion in 2019.
• Management consulting and services for IT related matters represent about $160 billion.
• Spending fluctuated in previous years, with a general upward trend overall between 1998 and 2019

What's New in Management Information Systems

• Continuous changes in technology, management, and business processes.
• Innovations in IT: Cloud computing, mobile digital platforms, big data analytics (AI, IoT).
• New business models: shift to online platforms for entertainment (e.g., Netflix).
• Expanding e-commerce, encompassing services, besides goods.
• Management changes: Online collaboration, business intelligence, virtual meetings, and increasing consumer awareness and utilization of new technologies.

Globalization Challenges and Opportunities: A Flattened World

• Globalization has drastically impacted business operations and management through internet and global communications.
• Cost reduction and increased foreign trade due to easier access to global markets.
• Growing interdependence of economies, competition for resources and ideas, and opportunities within diverse markets.

The Emerging Digital Firm

• Significant business relationships and processes are digitally enabled and mediated.
• Core business processes are handled digitally.
• Digital firms offer greater flexibility in organization, and management.
• Many firms are transitioning to fully digital models.

Strategic Business Objectives of Information Systems

• Growing interdependence between the firm's ability to utilize IT and its ability to reach business goals.
• Firms heavily invest in information systems to meet six strategic goals:
  • Operational excellence
  • Product and service innovation, and new business models.
  • Creating customer/supplier interaction.
  • Improved decision making.
  • Competitive advantage
  • Survival and continued existence

The Role of Information Systems in Business Today

• Operational excellence: greater efficiency, higher profitability by improving systems to increase productivity.
  • Example: Walmart with their Retail Link system to enhance supply chain connections
• New products, services & business models: Information systems are a driver and enabler of product/service creation and new/innovative/value added business models.
  • Example: Apple's shift from the traditional music CD industry to digitally delivered music.
• Customer and Supplier Intimacy: improved customer relationships and lower costs from superior relationships with suppliers.
  • Example: Personalized services in high-end hotels (e.g., Mandarin Oriental) – customer loyalty. JCPenney's relationship with suppliers in Hong Kong.
• Improved Decision Making: Better information provides better decision-making, avoiding inaccurate predictions.
  • Example: Real-time performance dashboards from Verizon.
• Competitive Advantage: Delivering superior products and services and responding quickly through information systems.
  • Example: Industry leaders such as Apple, Walmart, and UPS.
• Survival: Staying relevant in the face of competitive changes and governmental regulations.
  • Example: Citibank with the introduction of ATMS to respond to customer’s requirements, regulatory needs, and industry change.

What is an Information System?

• Interrelated components for collecting, processing, storing, distributing information; supporting decision-making, coordination, and control.
• Information Technology includes hardware and software, a firm's foundational building blocks, just like the material needed to construct a building.

Data vs. Information

• Data: raw, unorganized facts.
• Information: processed data structured into a meaningful form.

Functions of an Information System

• Input: Collecting raw data from inside and outside the organization.
• Processing: Transforming data into information.
• Output: Resultant information being transferred.
• Feedback: Information returned to improve the input and processing steps.
• This framework shows an iterative loop of data refinement, output, and feedback, demonstrating how systems react to adjustments needed.

Dimensions of Information Systems

• Organizational: Structure, responsibilities, unique business processes, and politics.
• Management: Strategic direction, creativity, and adjustments for services and products.
• Technology: Hardware and software, infrastructure, data management.

It Isn't Just Technology: A Business Perspective

• Information systems are crucial for creating value.
• Businesses' investment returns are strongly affected positive by technology development/improvement.
• Raw data are important in the correct environment, correctly structured and refined throughout stages in the value chain.

The Business Information Value Chain

• Data collection and storage.
• Transformation into usable business systems.
• Dissemination to relevant parts of the business.
• Activities related to making business decisions and developing a strategy for profitability.

A Business Perspective on Information Systems (cont.)

• Investing in information technology does not guarantee good returns.
• There's variation in the returns from IT investments.
• Factors impacting success:
  • Correct business model.
  • Investment, and managing resources in complementary systems, which include:
    • Organizational assets (e.g., efficient processes).
    • Managerial assets (e.g., incentives for innovation).
    • Social assets (e.g., infrastructure).

Complementary Assets

• Organizational: culture supportive of efficient operations.
• Managerial: strong leadership support and incentives for innovation
• Social: internet/telecom infrastructure and quality education.

Contemporary Approaches to Information Systems

• Technical: mathematically based models (e.g., computer science, management science, operations research).
• Behavioral: considers human factors in information system implementation.
• Sociotechnical approach: Optimizing social organizational functions in conjunction with technical systems for achieving desired outcomes

Test your knowledge on the essential role of information systems in modern businesses. This quiz covers key components, strategic objectives, and the impact of technology investments. Evaluate your understanding of how information systems transform operations and enhance productivity.