Management Information Systems: Managing the Digital Firm PDF

Management Information Systems: Managing the Digital Firm Fifteenth edition Chapter 1 Information Systems in Business Today Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Learning Obj...

Management Information Systems: Managing the Digital Firm Fifteenth edition Chapter 1 Information Systems in Business Today Copyright © 2018, 2017, 2016 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? Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Figure 1.1: Information Technology Capital Investment Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved What’s New In Management Information Systems (1 of 2) Technology – Cloud computing – Big data and the Internet of Things (IoT) – Mobile digital platform Management – Online collaboration and social networking software – Business intelligence – Virtual meetings Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved What’s New In Management Information Systems (2 of 2) Organizations – Social business – Telework – Co-creation of business value Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved How Information Systems Are Transforming Business – Mobile digital platform – Systems used to improve customer experience, respond to customer demand, reduce inventories, and more – Growing online newspaper readership – Expanding e-commerce and Internet advertising – New federal security and accounting laws Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Globalization Challenges and Opportunities: A Flattened World Internet has reduced costs of operating on global scale Increases in foreign trade, outsourcing Presents both challenges and opportunities 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 1.2: 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 Example: Verizon’s web-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, and so on 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, UPS Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Survival Information technologies as necessity of business Industry-level changes – Example: Citibank’s introduction of ATMs Governmental regulations requiring record- keeping – Examples: Toxic Substances Control Act, Sarbanes-Oxley Act – Dodd-Frank 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 1.3: 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 Figure 1.4: 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 1.5: 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 1.6: 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 platform that system is built on the Internet and intranets and extranets 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 Figure 1.8: Variation in Returns on Information Technology Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved Figure 1.9: 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 Figure 1.10: A Sociotechnical Perspective on Information Systems Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved