1.1 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 1 Managing the Digital Firm 1 1 MANAGING THE DIGITAL FIRM DIGITAL FIRM Chapter.

1.1 © 2004 by Prentice Hall

Management Information Systems 8/eManagement Information Systems 8/eChapter 1 Managing the Digital FirmChapter 1 Managing the Digital Firm11

MANAGING THEMANAGING THE

DIGITAL FIRMDIGITAL FIRM

Chapter


Management Information Systems 8/eManagement Information Systems 8/eChapter 1 Managing the Digital FirmChapter 1 Managing the Digital Firm

• What is the role of information systems in What is the role of information systems in today’s competitive business environment?today’s competitive business environment?

• What exactly is an information system? What exactly is an information system? What do managers need to know about What do managers need to know about information systems?information systems?

• How are information systems transforming How are information systems transforming organizations and management?organizations and management?


OBJECTIVES



• How has the Internet and Internet technology How has the Internet and Internet technology transformed business?transformed business?

• What are the major management challenges What are the major management challenges to building and using information systems?to building and using information systems?


OBJECTIVES (cont.)



1. Design competitive and effective systems1. Design competitive and effective systems

2. Understand system requirements of 2. Understand system requirements of global business environment global business environment

3. Create information architecture that 3. Create information architecture that supports organization’s goalsupports organization’s goal


MANAGEMENT CHALLENGES



4. Determine business value of information 4. Determine business value of information systemssystems

5. Design systems people can control, 5. Design systems people can control, understand and use in a socially, ethically understand and use in a socially, ethically responsible mannerresponsible manner


MANAGEMENT CHALLENGES (cont.)




The Competitive Business Environment and the Emerging Digital Firm

WHY INFORMATION SYSTEMS?

Four powerful worldwide changes that Four powerful worldwide changes that

have altered the business environment:have altered the business environment:

1.1. Emergence of the Global EconomyEmergence of the Global Economy

2.2. Transformation of Industrial EconomiesTransformation of Industrial Economies

3.3. Transformation of the Business EnterpriseTransformation of the Business Enterprise

4.4. The Emerging Digital FirmThe Emerging Digital Firm





Emergence of the Global EconomyEmergence of the Global Economy

• Management and control in a global Management and control in a global marketplacemarketplace

• Competition in world marketsCompetition in world markets• Global work groupsGlobal work groups• Global delivery systemsGlobal delivery systems






Transformation of Industrial EconomiesTransformation of Industrial Economies

• Knowledge- and information-based economiesKnowledge- and information-based economies

• ProductivityProductivity

• New products and servicesNew products and services

• Knowledge: a central productive and strategic Knowledge: a central productive and strategic assetasset






Transformation of Industrial EconomiesTransformation of Industrial Economies

• Time-based competitionTime-based competition

• Shorter product lifeShorter product life

• Turbulent environmentTurbulent environment

• Limited employee knowledge baseLimited employee knowledge base










Transformation of the Business EnterpriseTransformation of the Business Enterprise

• FlatteningFlattening• DecentralizationDecentralization• FlexibilityFlexibility• Location independenceLocation independence• Low transaction and coordination costsLow transaction and coordination costs• EmpowermentEmpowerment• Collaborative work and teamworkCollaborative work and teamwork






Emergence of the Digital FirmEmergence of the Digital Firm

• Digitally-enabled relationships with Digitally-enabled relationships with customers, suppliers, and employeescustomers, suppliers, and employees

• Core business processes accomplished Core business processes accomplished via digital networksvia digital networks

• Digital management of key corporate Digital management of key corporate assetsassets

• Rapid sensing and responding to Rapid sensing and responding to environmental changesenvironmental changes






Four Major Systems Defining the Digital FirmFour Major Systems Defining the Digital Firm• Supply chain management systemsSupply chain management systems• Customer relationship management Customer relationship management

systemssystems• Enterprise systemsEnterprise systems• Knowledge management systemsKnowledge management systems




A set of interrelated components that collectA set of interrelated components that collect

(or retrieve), process, store, and distribute (or retrieve), process, store, and distribute

information to support decision making and information to support decision making and

control in an organization control in an organization


What Is an Information System?




• Data:Data: Streams of raw facts representing Streams of raw facts representing events such as business transactionsevents such as business transactions

• Information:Information: Clusters of facts that are Clusters of facts that are meaningful and useful to human beings in meaningful and useful to human beings in the processes such as making decisionsthe processes such as making decisions











INPUT OUTPUTPROCESS

FEEDBACK


Activities in an Information System








• Rely on computer hardware and Rely on computer hardware and software software

• Processing and disseminating Processing and disseminating informationinformation


Computer-Based Information System (CBIS)




• Fixed definitions of data, proceduresFixed definitions of data, procedures

• Collecting, storing, processing, Collecting, storing, processing, disseminating, using datadisseminating, using data


Formal Systems




• An organizational and management An organizational and management solution based on information solution based on information technology to a challenge posed by the technology to a challenge posed by the environmentenvironment

• An important instrument for creating An important instrument for creating value for the organizationvalue for the organization

• Stages in the business information Stages in the business information value chain add value to informationvalue chain add value to information


A Business Perspective on Information Systems






Toyoda

ETC







• Information systems literacy:Information systems literacy: Broad- Broad-based understanding of information systems based understanding of information systems that includes behavioral knowledge about that includes behavioral knowledge about organizations and individuals using organizations and individuals using information systems and technical information systems and technical knowledge about computersknowledge about computers

• Computer literacy:Computer literacy: Knowledge about Knowledge about information technology, focusing on information technology, focusing on understanding how computer-based understanding how computer-based technologies worktechnologies work


A Business Perspective on Information Systems




• Sales and marketingSales and marketing

• ManufacturingManufacturing

• FinanceFinance

• AccountingAccounting

• Human resourcesHuman resources


Major Business Functions




Key Elements:Key Elements:• People:People: Managers, knowledge workers, Managers, knowledge workers,

data workers, production or service data workers, production or service workersworkers

• Structure:Structure: Organization chart, groups of Organization chart, groups of specialists, products, geographyspecialists, products, geography


Organizations




• Operating procedures:Operating procedures: Standard operating Standard operating procedures (SOP, rules for action)procedures (SOP, rules for action)

• Politics:Politics: Power to persuade, get things done Power to persuade, get things done

• Culture:Culture: Customs of behavior Customs of behavior


Organizations




Levels:Levels:• Senior managers:Senior managers: make long-range make long-range

strategic decisions about products and strategic decisions about products and services services

• Middle managers:Middle managers: Carry out the programs Carry out the programs and plans of senior managementand plans of senior management

• Operational managers:Operational managers: monitor the firm’s monitor the firm’s daily activities daily activities


Management




Tools managers use to cope with changeTools managers use to cope with change

• Hardware:Hardware: Physical equipment Physical equipment

• Software:Software: Detailed preprogrammed instructions Detailed preprogrammed instructions

• Storage:Storage: Physical media for Physical media for storing data and the softwarestoring data and the software


Computer Technology




• Communications Technology:Communications Technology: transfers data from one physical location transfers data from one physical location to anotherto another

• Networks:Networks: link computers to share data link computers to share data or resourcesor resources


Computer Technology





CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS



Optimize systems performance:Optimize systems performance:

• Technology and organization Technology and organization

• Organizations mutually adjust to one another Organizations mutually adjust to one another until fit is satisfactoryuntil fit is satisfactory


Sociotechnical Systems









TOWARD THE DIGITAL FIRM



• 1950s:1950s: Technical changes Technical changes

• 1960s-70s:1960s-70s: Managerial controls Managerial controls

• 1980s-90s:1980s-90s: Institutional core activities Institutional core activities

• Today:Today: Digital information webs Digital information webs extending beyond the enterpriseextending beyond the enterprise



The Widening Scope of Information Systems







• International network of networksInternational network of networks

• Universal technology platform: Any Universal technology platform: Any computer can communicate with any other computer can communicate with any other computer computer

• World Wide Web and Web sitesWorld Wide Web and Web sites



The Internet



• Communicate and collaborateCommunicate and collaborate

• Access informationAccess information

• Participate in discussionsParticipate in discussions

• Supply informationSupply information

• Find entertainmentFind entertainment

• Exchange business transactionsExchange business transactions



What You Can Do on the Internet?



• Flattening organizationsFlattening organizations

• Separating work from location Separating work from location

• Reorganizing work-flowsReorganizing work-flows

• Increasing flexibilityIncreasing flexibility

• Redefining organizational boundariesRedefining organizational boundaries



New Options for Organizational Design











• Electronic commerceElectronic commerce

• Electronic businessElectronic business

• Digital market: Information systems links, Digital market: Information systems links, buyers and sellers to exchange buyers and sellers to exchange information, products, services, paymentsinformation, products, services, payments



The Digital Firm







• Internet links buyers, sellersInternet links buyers, sellers

• Lower transaction costsLower transaction costs

• Goods and services advertised, bought, Goods and services advertised, bought, exchanged worldwideexchanged worldwide

• Business-to-business transactions Business-to-business transactions increasingincreasing



Electronic Commerce



• Electronic Business: Electronic Business: Executing all the Executing all the firm’s business processes with Internet firm’s business processes with Internet technologytechnology

• Intranet:Intranet: Business builds private, secure Business builds private, secure network based on Internet technologynetwork based on Internet technology

• Extranet: Extranet: Extension of intranet to Extension of intranet to authorized external usersauthorized external users


Electronic Business







Management Information Systems 8/eManagement Information Systems 8/eChapter 1 Managing the Digital FirmChapter 1 Managing the Digital Firm11

MANAGING THEMANAGING THE

DIGITAL FIRMDIGITAL FIRM

Chapter

1.1 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 1 Managing the Digital Firm 1 1 MANAGING THE DIGITAL FIRM DIGITAL FIRM Chapter.

Documents

role of information

e chapter

effective systems

information architecture

emerging digital firm

digital firm objectives

global economy management

design systems people