Management Information Systems - Chapter 1 - PDF

Management Information Systems: Managing the Digital Firm Seventeenth Edition Chapter 1 Information Systems in Global Business Today @n-umm Copyright © 2022,...

Management Information Systems: Managing the Digital Firm Seventeenth Edition Chapter 1 Information Systems in Global Business Today @n-umm Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Learning Objectives 1.1 How are information systems transforming business, and why are they so essential for running and managing a business today? 1.2 What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 1.3 What academic disciplines are used to study information systems, and how does each contribute to an understanding of information systems? 1.4 How will MIS help my career? onmmm Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Video Cases » Case 1: Business in the Cloud: Facebook, Google, and eBay Data Centers » Case 2: UPS Global Operations with the DIAD and Worldport * Instructional Video: Tour IBM’s Raleigh Data Center OI’:-;u'wn Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Smart Stores Reinvent the Retail Space (10f2) » Business Challenges — Mounting competition from online retailers — Take advantage of opportunities provided by new technology + Solutions — Acrelec system helps stores manage curbside pickup — AWM Smart Shelf enables retailers to view and track products in real-time; helps shoppers locate products using mobile devices; personalizes shopper experiences — AWM Frictionless enables low-contact cashierless checkout °I\':\mvn Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Smart Stores Reinvent the Retail Space (20f2) * lllustrates how brick-and-mortar retail stores are using information technology to compete more effectively against online retailers * Demonstrates IT’s role in driving business operations and management decisions « |llustrates how deploying new technology requires companies to redesign jobs and procedures, changing how companies run their businesses Oh-umvn Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 Oh-;qm-n Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Figure 1.1 Information Technology Capital Investment IT EQUIPMENT, SOFTWARE, and R&D SPENDING IN NOMINAL GDP (as a percent of total capital spending in nominal GDP) 03aBRERE58R8R3BR8RE Bl P NERIREE Percent LEESEEPEPE PSS E TS EF TS ohmm-n Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 — Al and machine learning — Use of social networks for business objectives * New Business Models — Online streaming and downloadable video = Examples: Netflix, Apple TV Channels, Amazon GH‘:«NM Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 Ol‘ramm Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 owumm Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Interactive Session: Management: Will the Coronavirus Pandemic Make Working from Home the New Normal? (1 of 2) » Class Discussion — Define the problem described in this case. What are the management, organization, and technology issues raised by this problem? — |dentify the information technologies used to provide a solution to this problem. Was this a successful solution? Why or why not? Ql’ramm Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Interactive Session: Management: Will the Coronavirus Pandemic Make Working from Home the New Normal? (2 of 2) » Class Discussion — Will working from home become the dominant way of working in the future? Why or why not?. ommm Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 ohflrm Copyright © 2022, 2020, 2018 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 °I‘vur~un Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 oi’\'itrsm\ Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Figure 1.2 The Interdependence Between Organizations and Information Systems 000 Business Strategic Business Processes Ji €—T—> Information Firm System OI\-anum Copyright © 2022, 2020, 2018 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 Om. n Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 °H~:n~u-n Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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. QI\-am-n Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 °P«nr~‘nn Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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. °I’vnr~w-n Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 °i’|‘flr‘~‘“" Copyright © 2022, 2020, 2018 Pearson Education, Inc. 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 ol’('m\“" Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved What Is an Information System? (1 of 3) * 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 oi\-urwl Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Figure 1.3 Data and Information 331 Brite Dish Soap 1.20 - 863 BL Hill Goffes 4.66 173 Meow Cat.79 3 e Tt 331 Brite Dish S ITEM NO. DESCRIPTION UNITS SOLD 331 Brite Dish Soap 7,156 331 Brltgelslshs«:ap 1.29 YD$9,231.24 SALES @ pearson Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved What Is an Information System? (2 of 3) + Activities in an information system that produce information: — Input — Processing — Output — Feedback » Sharp distinction between computer or computer program versus information system ol’r:m‘«-n Copyright © 2022, 2020, 2018 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 Ol’v:-rmn Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Figure 1.4 Functions of an Information System Olknmm Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems * Organizations * Management » Technology @Pwrsm Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Figure 1.5 Information Systems Are More Than Computers Organizations @l’t-arsm Copyright © 2022, 2020, 2018 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 @l\-armn Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Figure 1.6 Levels in a Firm Middle Management Scientists and knowledge workers Operational Management Production and service workers Data workers Ql’mmm Copyright © 2022, 2020, 2018 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 @ pearson Copyright © 2022, 2020, 2018 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 @Pmrsm Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems: Information Technology » Computer hardware and software » Data management technology * Networking and telecommunications technology — Networks, the Internet, intranets and extranets, World Wide Web * IT infrastructure: provides platform that system is built on el’cnmm Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved