MIS270_Ch1 (1).pdf

Management Information Systems: Managing the Digital Firm Sixteenth Edition Chapter 1 Information Systems in Global Business Today Copyright © 2020, 2018, 201...

Management Information Systems: Managing the Digital Firm Sixteenth Edition Chapter 1 Information Systems in Global Business Today Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Learning Outcomes 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? 1.3 What academic disciplines are used to study information systems, and how does each contribute to an understanding of information systems? Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved How Information Systems Are Transforming Business (1 of 2) In 2017, more than 140 million businesses had dot-com addresses registered 273 million adult Americans online; 190 million purchased online 269 million Americans have mobile phones 200 million use social networks Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved How Information Systems Are Transforming Business (2 of 2) 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 5 Years Changes in business result in changes in jobs and careers Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved  Figure 1.1 Information Technology Capital Investment Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved What’s New in Management Information Systems (1 of 2) IT Innovations – Cloud computing, big data, Internet of Things – Mobile digital platform New Business Models – Online streaming music and video 2016 75 million – On-demand e-commerce services 67 % movies and TV shows Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved  What’s New in Management Information Systems (2 of 2) E-commerce Expansion – E-commerce expands to nearly $1 trillion in 2018 – Netflix now has more than 125 million US subscribers – Online services now approach online retail in revenue – Online mobile advertising now larger than desktop Management Changes – Managers use social networks, collaboration tools – Virtual meetings proliferate Copyright © 2020, 2018, 2016 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 Copyright © 2020, 2018, 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 © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved 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 Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 1.2 The Interdependence Between Organizations and Information Systems Copyright © 2020, 2018, 2016 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 $485 billion in sales in 2017 – Most efficient retail store in world as result of digital links between suppliers and stores Copyright © 2020, 2018, 2016 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. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Customer and Supplier Intimacy Customers who are served well become repeat customers who purchase more – Example: Hilton 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: JC Penney – JC Penney uses IT to enhance relationship with supplier in Hong Kong Copyright © 2020, 2018, 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 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 © 2020, 2018, 2016 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 Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved  Survival Businesses may need to invest in information systems out of necessity; simply the cost of doing business Keeping up with competitors – Citibank’s introduction of ATMs Copyright © 2020, 2018, 2016 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 Information Data: streams of raw facts raw data Information: data shaped into meaningful, useful form Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 1.3 Data and Information Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved What Is an Information System? (2 of 3) Activities in an information system that produce information: – Input members of the Information organization raw data – Processing – Output – Feedback Computer technology Sharp distinction between computer or computer program versus information system Copyright © 2020, 2018, 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 © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 1.4 Functions of an Information System Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Dimensions of Information Systems Organizations Management Technology Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 1.5 Information Systems Are More Than Computers Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved  Dimensions of Information Systems: Organizations (1 of 2) Hierarchy of authority, responsibility – Senior management: long-range strategic decisions – Middle management: carries out plans of senior management – Operational management: monitoring the daily activities – Knowledge workers: engineers, scientists, or architects – Data workers: secretaries, assist with scheduling and communications – Production or service workers: produce and deliver the service Copyright © 2020, 2018, 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 © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved  Figure 1.6 Levels in a Firm Copyright © 2020, 2018, 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 © 2020, 2018, 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 Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 1.9 Contemporary Approaches to Information Systems Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Technical Approach Emphasizes mathematically based models Computer science, management science, operations research Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Behavioral Approach Behavioral issues (strategic business integration, implementation, etc.) Psychology, economics, sociology Copyright © 2020, 2018, 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 © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Copyright This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved