chapter 1 MIS

Transforming Business with Information Systems

• Information systems are essential for modern business operations and management because of its ability to adapt to new technologies.
• A comprehensive information system includes management, organization, and technology components.
• Complementary assets are vital for information systems to provide genuine value to organizations.
• Academic disciplines contribute to understanding information systems.
• MIS knowledge is relevant to career advancement.

Smart Stores and Retail Innovation

• Brick-and-mortar stores use information technology to compete with online retailers.
• IT drives business operations and management decisions.
• New tech requires redesigning jobs and procedures, and changing how companies operate.
• Acrelec systems help stores manage curbside pickup.
• AWM Smart Shelf tracks products in real-time and customizes shopper experiences via mobile devices to create low-contact cashierless checkouts with AWM Frictionless.

The Impact of Information Systems

• Global spending on IT and services reached nearly $3.8 trillion in 2019.
• Management consulting and services accounted for $160 billion of that spending.
• Organizational, managerial, and cultural shifts are needed to fully realize the business value of IT investments.

Emerging Trends in Management Information Systems

• IT innovations include Cloud computing, big data, the Internet of Things, mobile digital platforms, AI, and machine learning.
• Social networks are used for business objectives.
• New business models are based around online streaming and downloadable video from companies like Netflix, Apple TV Channels, and Amazon.
• E-commerce is expanding globally to nearly $3.6 trillion in 2019
• The mobile platform is spurring growth in social commerce.
• Mobile retail e-commerce is experiencing annual growth exceeding 20%, reaching almost $300 billion in 2020.
• Managers use mobile devices, social networks, and collaboration tools.
• Business intelligence applications are accelerating.
• Organizations are changing to have more collaboration and less rigid hierarchies, a greater emphasis on skills, and more accurate decision-making through data analysis.
• There is more willingness to interact with consumers via social media and a better understanding of the importance of IT.

Globalization and a Flattened World

• The Internet and global communications have transformed business operations.
• Significant reductions in operating and transaction costs on a global scale.
• There is increasing competition for jobs, markets, resources, and ideas.
• Economies are becoming more interdependent.
• A new comprehension of skills, markets, and opportunities is needed.

The Digital Firm

• In a fully digital firm, business relationships are digitally enabled and mediated, core business processes are conducted through digital networks, and key corporate assets are digitally managed.
• Digital firms offer greater organizational and management flexibility through time and space shifting.

Strategic Business Objectives

• There is increasing interdependence between using information technology and implementing corporate strategies to achieve corporate goals.
• Firms invest heavily to achieve operational excellence, create new products, foster customer and supplier intimacy, improve decision-making, gain competitive advantages, and ensure survival.
• Improved efficiency translates to higher profits.
• Effective IT improves overall efficiency and productivity.
• Walmart integrates information systems and best practices to achieve operational efficiency, with over $524 billion in sales in 2019, and has the most efficient retail store via digital links with suppliers and stores.
• Apple transformed music distribution with iTunes and innovated with products—iPod, iPhone, and iPad.
• Mandarin Oriental Hotel uses IT to build close customer ties by tracking preferences.
• Close supplier relationships reduce costs.
• JC Penney uses IT for supplier relationships in Hong Kong.
• Real-time data enables better management decisions.
• Verizon uses digital dashboards for real-time data on customer issues, network performance, and outages.
• Competitive advantage is typically achieved through previous business objectives.
• A company can charge less for superior products and have better performance in order to have a better response to suppliers and customers.
• Apple, Walmart, and UPS are industry leaders by leveraging information systems.
• Businesses invest in IS for survival by keeping up with competitors and meeting regulations, such as Citibank's ATMs and compliance with the Toxic Substances Control Act and the Sarbanes-Oxley Act.

Understanding Information Systems

• Information technology (IT) includes the hardware and software businesses use to meet objectives.
• An information system consists of interrelated components managing information to support decision-making, control, analysis, visualization, and product creation.
• Data refers to raw facts, while information is data shaped into a meaningful and useful form.
• An information system involves activities such as input, processing, output, and feedback.
• An information system is different from a stand-alone computer or computer program.
• Feedback involves having the output being returned to appropriate members to help evaluate or correct in the input stage.
• Computers and software provide the foundation and tools to build information systems.

Dimensions of Information Systems

• The dimensions of information systems include: organization, management, and technology.
• Organizations have a hierarchy of authority and responsibility, ranging from senior to middle and operational management, as well as knowledge, data, and service workers.
• Business functions are separated into fields like sales and marketing, human resources, finance, and manufacturing.
• Managers set organizational strategies and act creatively by creating new products and occasionally recreating the organization.
• IT includes computer hardware and software, data management, and networking technologies like the Internet and intranets.
• IT infrastructure is the foundation on which the system is built.
• Organizational procedures track packages and manage inventory, while management uses the system to watch service levels and costs.
• Technology includes handheld and desktop computers, bar-code scanners, and networks.

Business Perspective on Information Systems

• Information systems are tools to create value.
• Investing in IT yields superior returns, increases productivity and revenue, and can improve long-term strategic positioning.
• The business information value chain involves acquiring and transforming raw data through stages that add value.
• An information system’s value is judged by its contribution to better decisions, greater efficiency, and higher profits.
• The business perspective focuses on the organizational and managerial aspects of information systems.
• Investing in IT does not guarantee good returns.

Complementary Assets and IT Value

• Assets are needed to derive value from a primary investment.
• Firms see better returns when they support technology investments with complementary investments.
• Examples include: organizational assets (appropriate business model and efficient business processes), managerial assets (incentives for management innovation and teamwork), and social assets (the Internet and technology standards).

Approaches to Information Systems

• Technical approaches use computer science, management science, and operations research with mathematically based models.
• Behavioral approaches address strategic business integration and implementation using psychology, economics, and sociology.
• Sociotechnical systems combine computer science, management science, operations research, practical orientation, and behavioral issues.
• Its main actors are: suppliers of hardware and software, business firms, managers and employees, and a firm’s environment including it’s legal, social, and cultural context.

Sociotechnical View

• Looks for optimal performance by jointly optimizing both the social and technical systems used in production.
• This approach avoids a purely technological approach.