Management Information Systems: Managing the Digital Firm PDF

Management Information Systems: Managing the Digital Firm Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved The Emerging Digital Firm In a fully digital firm: – Significant business relationships are digitally enabled and mediated – Core b...

Management Information Systems: Managing the Digital Firm Copyright © 2018, 2017, 2016 Pearson Education, Inc. 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 © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Strategic Business Objectives of Information Systems (1 of 2) Growing interdependence between: – Ability to use information technology and – Ability to implement corporate strategies and achieve corporate goals Copyright © 2018, 2017, 2016 Pearson Education, Inc. 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 © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Figure: The Interdependence Between Organizations and Information Systems Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Operational Intelligence Improvement of efficiency to attain higher profitability Information systems, technology an important tool in achieving greater efficiency and productivity Walmart’s Retail Link system links suppliers to stores for superior replenishment system Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved New Products, Services, and Business Models Business model: describes how company produces, delivers, and sells product or service to create wealth Information systems and technology a major enabling tool for new products, services, business models – Examples: Apple’s iPad, Google’s Android OS, and Netflix Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Customer and Supplier Intimacy Serving customers well leads them to return, increasing revenue and profits – Example: High-end hotels that use computers to track customer preferences and then monitor and customize the environment Intimacy with suppliers allows them to provide vital inputs, which lowers costs – Example: JCPenney’s information system which links sales records to contract manufacturer Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved 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 Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Competitive Advantage Delivering better performance Charging less for superior products Responding to customers and suppliers in real time Examples: Apple, Walmart Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Survival Information technologies as the necessity of business Industry-level changes – Example: Citibank’s introduction of ATMs Governmental regulations requiring record- keeping – Examples: Toxic Substances Control Act Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved What Is an Information System? (1 of 3) Information system – Set of interrelated components – Collect, process, store, and distribute information – Support decision making, coordination, and control Information vs. data – Data are streams of raw facts – Information is data shaped into meaningful form Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Figure: Data and Information Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved What Is an Information System? (2 of 3) Three activities of information systems produce information organizations need – Input: Captures raw data from organization or external environment – Processing: Converts raw data into meaningful form – Output: Transfers processed information to people or activities that use it Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved What Is an Information System? (3 of 3) 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 Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Components of IS: Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Figure: Functions of an Information System Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems Organizations Management Technology Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Figure: Information Systems Are More Than Computers Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems: Organizations (1 of 2) Hierarchy of authority, responsibility – Senior management – Middle management – Operational management – Knowledge workers – Data workers – Production or service workers Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Figure: Levels in a Firm Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems: Organizations (2 of 2) Separation of business functions – Sales and marketing – Human resources – Finance and accounting – Manufacturing and production Unique business processes Unique business culture Organizational politics Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems: Management Managers set organizational strategy for responding to business challenges In addition, managers must act creatively – Creation of new products and services – Occasionally re-creating the organization Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems: Technology Computer hardware and software Data management technology Networking and telecommunications technology – Networks, the Internet, intranets and extranets, World Wide Web IT infrastructure: provides a platform that the system is built on Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved It Isn’t Just Technology: A Business Perspective on Information Systems (1 of 3) Information system is instrument for creating value Investments in information technology will result in superior returns – Productivity increases – Revenue increases – Superior long-term strategic positioning Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved It Isn’t Just Technology: A Business Perspective on Information Systems (2 of 3) 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 Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved It Isn’t Just Technology: A Business Perspective on Information Systems (3 of 3) 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) Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Figure: The Business Information Value Chain Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Figure: Contemporary Approaches to Information Systems Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Technical Approach Emphasizes mathematically based models Computer science, management science, operations research Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Behavioral Approach Behavioral issues (strategic business integration, implementation, etc.) Psychology, economics, sociology Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Approach of This Text: Sociotechnical Systems (1 of 2) Management information systems – Combines computer science, management science, operations research, and practical orientation with behavioral issues Four main actors – Suppliers of hardware and software – Business firms – Managers and employees – Firm’s environment (legal, social, cultural context) Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Approach of This Text: Sociotechnical Systems (2 of 2) Sociotechnical view – Optimal organizational performance achieved by jointly optimizing both social and technical systems used in production – Helps avoid purely technological approach Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved