Chapter 1 - Intro to BIT PDF

Chapter 1 A) How Information Systems Are Transforming Business How Information Systems Are Transforming Business ¨ Social networking tools being used by businesses to connect employees, customers, and managers ¨ Internet advertising continues to grow at more than 20 percent per year ¨ New laws requi...

Chapter 1 A) How Information Systems Are Transforming Business How Information Systems Are Transforming Business ¨ Social networking tools being used by businesses to connect employees, customers, and managers ¨ Internet advertising continues to grow at more than 20 percent per year ¨ New laws require businesses to store more data for longer periods ¨ Changes in business result in changes in jobs and careers What’s New In Management Information Systems (1 of 3) I T Innovations ¨ Cloud computing, big data, Internet of Things ¨ Mobile digital platform ¨ AI and machine learning New Business Models ¨ On-demand e-commerce services ¨ News and information distribution (Speed and reach) What’s New In Management Information Systems (2 of 3) E-commerce Expansion ¨ Online services now approach online retail in revenue ¨ Online mobile advertising now larger than desktop Management Changes ¨ Managers use social networks, collaboration tools ¨ Business intelligence applications accelerate ¨ Virtual meetings proliferate What’s New In Management Information Systems (3 of 3) Firms and Organizations Change ¨ More collaborative, less emphasis on hierarchy and structure ¨ Greater emphasis on competencies and skills ¨ Higher-speed/more accurate decision making based on data and analysis ¨ More willingness to interact with consumers (social media) ¨ Better understanding of the importance of IT Globalization Challenges and Opportunities: A Flattened World Internet and global communications have greatly changed how and where business is done • Drastic reduction of costs of operating and transacting on global scale • Competition for jobs, markets, resources, ideas • Growing interdependence of global economies • Requires new understandings of skills, markets, opportunities • Challenges yes, but opportunities as well ➢ Information systems enable globalization of commerce Impact of the Corona Pandemic ➢ The Corona pandemic has acted as an accelerator for the use of various digital applications. Not only in private use, but it had also a great effect on organizations. The understanding and thus acceptance of online applications has helped this breakthrough in society. The Emerging Digital Firm In a fully digital firm: ¨ Significant business relationships are digitally enabled and mediated ¨ Core business processes are accomplished through digital networks ¨ Key corporate assets are managed digitally ➢ Digital firms offer greater flexibility in organization and management Strategic Business Objectives of Information Systems Growing interdependence between: ➢ Ability to use information technology and ➢ Ability to implement corporate strategies and achieve corporate goals ➢ Or, to put it another way, if you don’t master IT, you will have difficulty implementing strategies and achieving Strategic Business Objectives of Information Systems Firms invest heavily in information systems to achieve six strategic business objectives: 1. Operational excellence 2. New products, services, and business models 3. Customer and supplier intimacy 4. Improved decision making 5. Competitive advantage 6. Survival 1) Operational Intelligence ➢ Improved efficiency results in higher profits • Information systems and technologies help improve efficiency and productivity ✓ Scanner checkouts in supermarkets 2) New Products, Services, and Business Models ➢ Information systems and technologies enable firms to create new products, services, and business models Business model: how a company produces, delivers, and sells its products and services ✓ Self scanning in supermarkets 3) Customer and Supplier Intimacy ➢ Serving customers well leads them to return, increasing revenue and profits ✓ Customer data on online stores is used for improved customer offers 4) Improved Decision Making Without accurate information: ➢ Managers must use forecasts, best guesses, luck Results in: • Overproduction, underproduction • Misallocation of resources • Poor response times ➢ Poor outcomes raise costs, lose customers ✓ Therefore, reliable and rapid information is imperative today. 5) Competitive Advantage • Often results from achieving previous business objectives • Advantages over competitors • Charging less for superior products, better performance, and better response to suppliers and customers 6) Survival ➢ Information technologies as necessity of business • Industry-level changes like E-banking • Governmental regulations requiring record-keeping: ➢ EU: General Data Protection Regulation GDPR (DSGVO) B) Information Systems What Is an Information System? • Information technology: the hardware and software a business uses to achieve objectives • Information system: interrelated components that manage information to: • Support decision making and control • Help with analysis, visualization, and product creation • Data: streams of raw facts • Information: data shaped into meaningful, useful form • Activities in an information system that produce information: • Input • Processing • Output • Feedback • Sharp distinction between computer or computer program versus information system Feedback – Output is returned to appropriate members of organization to help evaluate or correct input stage Computer/computer program vs. information system – Computers and software are technical foundation and tools, similar to the material and tools used to build a house A Business Perspective on Information Systems • Information system is an instrument for creating value • Investments in information technology will result in superior returns – Productivity increases – Revenue increases – Superior long-term strategic positioning A Business Perspective on Information Systems Business information value chain ➢ Raw data acquired and transformed through stages that add value to that information ➢ Value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits Business perspective • Calls attention to organizational and managerial nature of information systems A Business Perspective on Information Systems • Investing in information technology does not guarantee good returns • There is considerable variation in the returns firms receive from systems investments • Factors • Adopting the right business model • Investing in complementary assets (organizational and management capital)