Management Information Systems: Managing the Digital Firm

Management Information Systems: Managing the Digital Firm Seventeenth Edition, Global Edition Chapter 1 Information Systems in Global Business Today Copyr...

Management Information Systems: Managing the Digital Firm Seventeenth Edition, Global Edition Chapter 1 Information Systems in Global Business Today Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  Setting the scene Facebook Data Centre – https://www.youtube.com/watch?v=_r97qdyQtIk Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  How Information Systems Are Transforming Business Global spending on information technology (IT) and IT services: nearly $3.8 trillion in 2019; $160 billion spent on management consulting and services Organizational, management, and cultural changes are often required for firms to derive full business value from IT investments Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  Figure 1.1 Information Technology Capital Investment Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  What’s New in Management Information Systems (1 of 3) IT Innovations – Cloud computing, big data, Internet of Things – Mobile digital platform – AI and machine learning – Use of social networks for business objectives New Business Models – Online streaming and downloadable video ▪ Examples: Netflix, Apple TV Channels, Amazon Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  What’s New in Management Information Systems (2 of 3) E-commerce Expansion – E-commerce worldwide expands to nearly $3.6 trillion in 2019 – Growth in social commerce spurred by growth of mobile platform – Mobile retail e-commerce growing more than 20 percent a year, reaching almost $300 billion in 2020 Management Changes – Managers becoming more mobile – Managers use social networks, collaboration tools – Business intelligence applications accelerate Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  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 Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  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 Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  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 – Time shifting, space shifting Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  Strategic Business Objectives of Information Systems (1 of 2) Growing interdependence between: – Ability to use information technology – Ability to implement corporate strategies and achieve corporate goals Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  Figure 1.2 The Interdependence Between Organizations and Information Systems Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  Strategic Business Objectives of Information Systems (2 of 2) 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 Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  Operational Excellence Improved efficiency results in higher profits Information systems and technologies help improve efficiency and productivity Example: Walmart – Power of combining information systems and best business practices to achieve operational efficiency— and over $524 billion in sales in 2019 – Most efficient retail store in world as result of digital links between suppliers and stores Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  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 Example: Apple – Transformed old model of music distribution with iTunes – Constant innovations—iPod, iPhone, iPad, etc. Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  Customer and Supplier Intimacy Customers who are served well become repeat customers who purchase more – Example: Mandarin Oriental Hotel – Uses IT to foster an intimate relationship with its customers, keeping track of preferences, etc. Close relationships with suppliers result in lower costs – Examples: Mandarin Oriental Hotel and JC Penney (in text) – JC Penney uses IT to enhance relationship with supplier in Hong Kong Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  Improved Decision Making Without accurate information, managers must use forecasts, best guesses, and luck, resulting in misallocation of resources, inventory, employees Real-time data improves ability of managers to make decisions – Example: Verizon’s web-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, etc. Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  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 – Examples: Apple, Walmart, UPS are industry leaders because they know how to use information systems for this purpose Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved  Survival Businesses may need to invest in information systems out of necessity; it is simply the cost of doing business Keeping up with competitors – Citibank’s introduction of ATMs Federal and state regulations and reporting requirements – Toxic Substances Control Act and the Sarbanes-Oxley Act Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved