MIS Key Challenges

Key Challenges in MIS

• Cloud computing is emerging as a major business innovation area. Flexible computer collections on the internet are performing tasks traditionally done in corporate data centers.
• A management challenge is to determine the costs and benefits of cloud computing and how much of a firm's infrastructure should be moved to cloud providers.
• Businesses are looking for insights in huge volumes of data from web traffic, email messages, social media content, and IoT sensors. More powerful data analytics and dashboards can provide real-time performance information.
• A challenge is to determine if a firm can analyze and use Big Data and analytics to provide better products and services.
• Artificial intelligence (AI) helps computer programs find patterns in large databases to understand business and improve products.
• A challenge is to identify where AI can be used, find expertise, evaluate benefits, and determine costs.
• Business and personal computing is moving to smartphones, tablets, and wearable devices. These devices support collaboration, coordination, communication, and online purchases.
• Businesses need to determine how to best use mobile capabilities for employees and customers, the costs, and benefits.
• Although firms spend millions on information systems, they have little understanding of the benefits. Figuring out how to measure and understand the benefits of IS/IT expenditures is key. Businesses should look at cheaper alternative services.
• Millions of business people use Google Apps, Google Drive, Microsoft Office 365, Yammer, Zoom, and IBM Connections for different collaborative purposes. It is important to coordinate the use of new technologies to improve collaboration and knowledge sharing.
• Security lapses and protecting customer privacy are major public issues. Businesses must know their data is secure, how much to spend on security, and what privacy policies to implement and expand.
• Businesses use social networking platforms to deepen interactions with employees, customers, and suppliers. Where a business should go from here depends on the real value derived from those platforms.
• Telework is gaining momentum due to the internet, cloud computing, smartphones and tablets. Forty-three percent of Americans spend some time working remotely.

Business Drivers of Information Systems

• Information systems are essential for achieving six important business objectives: operational excellence, new products/services/business models, customer/supplier intimacy, improved decision making, competitive advantage, and survival.

Operational Excellence

• Businesses improve operations to achieve higher profitability. Information systems enhance efficiency and productivity, especially combined with changes in practices and management.
• Walmart demonstrates the power of information systems and practices for achieving world-class operational efficiency; its Retail Link system digitally connects suppliers to all 11,666 stores.
• In 2019, Walmart achieved over $514 billion in sales from this system.
• Amazon invested $2.1 billion in information systems in 2018 to respond in milliseconds to product searches from one of its estimated 300 million users.

New Products, Services, and Business Models

• Information systems are a major tool for creating new products, services, and business models. A business model describes the means to produce, deliver, and sell a product or service to create wealth.
• Apple Inc. transformed the music industry from vinyl, tapes, and CDs, to an online download distribution model with the iTunes store and Apple's own operating system.

Customer and Supplier Intimacy

• When a business knows and serves its customers well, they respond by returning and purchasing more.
• Likewise, the more a business engages its suppliers, the better they can provide vital inputs, lowering costs. Knowing customers or suppliers is a central problem.
• The Mandarin Oriental uses information systems to track preferences, such as room temperature, check-in time, and TV programs, and customize services.
• JCPenney uses information systems-enabled supplier intimacy, where the record of a dress shirt sale in the U.S. appears immediately on computers in Hong Kong at TAL Apparel Ltd. TAL decides how many replacement shirts to make and sends them to JCPenney stores, bypassing warehouses.

Improved Decision Making

• Managers who operate in an information fog bank rely on forecasts, guesses, and luck. IT has enabled managers to use real-time data from the marketplace to make decisions, improve outcomes, raise costs and retain customers.
• Verizon uses a web-based digital dashboard for managers with real-time information on customer complaints, network performance, and line outages.

Competitive Advantage

• Achieved through the combination of operational excellence; new products, services, and business models; customer/supplier intimacy; and improved decision making. Doing things better than competitors leads to higher profits.
• Apple, Walmart, and UPS are industry leaders who utilize information systems for this purpose.

Survival

• Necessary for doing business in many cases because it is driven by industry-level changes.
• Citibank introduced ATMs, and competitors rushed to match that offering. Virtually all global banks have ATMs today because it is necessary to do retail banking business.
• Countries also have statutes and regulations which legally require companies to retain records, and companies must rely on IT to meet the requirements.
• The Toxic Substances Control Act (1976) requires firms to retain records on employee exposure for 30 years. The Sarbanes-Oxley Act (2002) requires public companies to retain audit working papers for 5 years.

Dimensions of Information Systems

• Examination of the dimensions of information systems involves three components: organizations, people and technology.

Organizations

• The history and culture of business firms affects the way technology is used.
• Organizations have a structure with different levels and specialties that reveal a clear division of labor (hierarchy or pyramid structure). An organization uses business processes for accomplishing tasks in a coordinated manner.
• Business process includes formal rule, these rules act as guidelines for employees, some of these business processes are written down, others are informal work practices that are not documented.
• Every organizations has a unique culture: fundamental assumptions, values, and ways of doing things. Parts of an organization's culture are always found embedded in IS.
• Different levels and specialties create conflict, and information systems come out of different perspectives, conflicts, and compromises.

People

• A business is only as good as the people who work there and run it. Likewise with information systems, they are useless without skilled people to build and maintain them.
• Employee attitude, jobs, employees or technology can have a powerful effect on their abilities to use information systems productively.
• Business firms require skills, managers, and rank-and-file employees. Managers perceive business challenges, they set the organizational strategy for responding to the challenges, and they allocate the resources to coordinate and achieve success. Managers must exercise responsible leadership.
• Managers must create new products and services, recreate the organization from time to time.
• IT can play a powerful role in helping managers develop novel solutions to a broad range of problems.
• Technology is inexpensive, but people are very expensive.

Technology

• Computer hardware is the physical equipment used for input, processing, storage output, and networking.
• Computer software consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system.
• Data management entails the software governing the organization of data on physical storage media.
• Networking and telecommunications links hardware and transfers data. A network links computers.
• The Internet is a global network of networks.
• The Internet has created a new, universal technology platform on which to build new products, strategies, and business models.
• Intranets are internal corporate networks; and an extranet extends such networks to authorized users outside the organisation.
• The World Wide Web uses accepted standards for storing, retrieving and displaying information in a page format on the Internet. The web can serve as the foundation for new kinds of information systems.
• These technologies represent resources that can be shared throughout the organization and constitute the firm's IT infrastructure. Each organization must design and manage its IT infrastructure so that it has the set of technology services it needs.

Review Summary

• Information systems are essential for running and managing business today - survival is difficult without extensive use of IT.
• Businesses use information systems to achieve six major objectives: operational excellence, new products/services, customer/supplier intimacy, improved decision making, competitive advantage, and survival.
• An information system collects, stores, and disseminates information from an organization's environment to support functions and decision making. Information systems transform raw data into useful information through input, processing, and output.
• From a business perspective, an information system provides solutions to a problem or challenge. An information system represents a combination of people, organization, and technology elements.
• The people dimension of information systems involves issues such as training, job attitudes, and management behavior. The technology dimension consists of hardware, software, data management, and networking/telecommunications, including the Internet.
• The organizational dimension involves the organizational hierarchy, functional specialties, business processes, culture, and political interest groups.
• A four-step method for business problem solving helps solve information system-related problems.
• In problem identification, it is important to understand the kind of problem being presented and identify the people, organizational, and technology factors.
• Solution design involves designing several alternative solutions to the problem identified.
• Evaluation and choice entail selecting the best solution, taking into account its cost and the available resources and skills in the business.
• Implementation of an information system solution entails purchasing or building hardware and software, testing the software, employee training, managing introducing the system, and measuring the outcome.
• Problem-solving requires critical thinking to consider multiple perspectives and alternatives.

Information System Skills and Knowledge

• Needed in business careers include understanding how information systems help firms achieve major business objectives, skills in data analysis and business intelligence, sensitivity to the ethical, social, and legal issues systems raise, and the ability to work with building systems.
• The ability to communicate verbally and in writing and to collaborate with others on a team are also important.