Chapter 1. Information systems are the foundation for conducting business today. In many industries, survival and even existence is difficult without.

INFORMATION SYSTEMS IN

GLOBAL BUSINESS

TODAYChapter 1

THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY Information systems are the foundation for

conducting business today. In many industries, survival and even existence is difficult without extensive use of information technology. No longer can we imagine going to work and conducting business without them. As a society we have come to rely extensively on the use of information appliances such as cell phones, BlackBerrys, handhelds and other hardware. Communicating and conducting business is increasingly being carried out through the use of e mail, online conferencing and international teleconferencing. Internet technologies have become essential business tools.

WHAT’S NEW IN MANAGEMENT INFORMATION SYSTEMS In the technology area there are three

interrelated changes: The emerging mobile digital platform

( think iPhones, BB, and tiny Web-surfing netbooks)

The growth of online software as a service

The growth in “cloud computing” where more and more business software runs over the Internet.

MANAGEMENT INFORMATION SYSTEM (MIS)Change Impact

Cloud computing platform emerges as a major business area of innovation

A flexible collection of computers on the Internet begins to perform tasks.

Growth in software as a service

Major business applications are now delivered online

A mobile digital platform emerges to compete with the PC as a business system

Apple opens its iPhone software to developers, and then opens an applications store on iTunes where business users can download hundreds of applications.

Managers adopt online collaboration and social networking software to improve coordination, collaboration and knowledge sharing

Google Apps, Google Sites, Microsoft’s Windows Sharepoint Services

Change Impact

Virtual meetings proliferate Managers adopt telepresence video conferencing and Web conferencing

Web 2.0 applications are widely adopted by firms

Web based services enable employees to interact as online communities using blogs etc

Telework gains momentum in the workplace

The internet, woreless laptops, iPhones and BlackBerrys make it possible for growing numbers of people to work away from the traditional office.

Outsourcing production Firms learn to use the new technologies to outsource production work to low wage countries.

GLOBALIZATION CHALLENGES AND OPPORTUNITIES: A FLATTENED WORLD A growing percentage of the economy of India and

other advanced countries in South East Asia depends on imports and exports, Foreign trade, as a percentage of GDP was over 25% in 2006, up from 14.1% percent in 1990-91.

It’s not just goods that move across borders. So to do jobs, some of them high level jobs that pay well and require a college degree.

On the plus side, a recent Nasscom- CRISIL report, “The Rising Tide- Output and Employment Linkages of IT-ITeS,” says the industry is expected to create about 11 million jobs by 2010, and employment in information systems and the other service occupations listed above, has expanded in sheer numbers, wages, productivity and quality of work

A good discussion of six important business objectives, why businesses have become so dependant on information systems today and the importance of these systems for the survival of a firm: Operational excellence, new product and business models and Competitive Advantage Survival.

WHAT DOES GLOBALIZATION HAVE TO DO WITH MANAGEMENT INFORMATION SYSTEMS?

That’s simple: everything. The emergence of the Internet into a full

blown international communications system has drastically reduced the costs of operating and transacting on a global scale.

EMERGING DIGITAL FIRM Digital Firm: All of the organization’s

significant business relationships with customers, suppliers, and employees are digitally enabled and mediated.

Business processes: It refers to the set of logically related tasks and behaviors that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated.

DIGITAL FIRMIn the emerging 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 (24/7), space shifting

(eBay, General Motors)

WHY BUSINESSES HAVE BECOME SO DEPENDANT ON IS? Operational Excellence New Products, Services, and Business

Models Customer and Supplier Intimacy Improved decision making Competitive Advantage Survival

WHAT IS AN INFORMATION SYSTEM?

An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization

By information we mean data that have been shaped into a form that is meaningful and useful to human beings. Data, in contrast, are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized.

DATA AND INFORMATION

DATA: 331 Brite Dish Soap 1.29

Information System

Information: Item No:331. Units Sold:

7,156

Raw data from the super market can be processed to get useful information

FUNCTIONS OF AN INFORMATION SYSTEM

Input

Processing, Classify, Arrange, Calculate

Output

Regulatory AgenciesStock Holders Competitors

SuppliersCustomers

DIMENSIONS OF INFORMATION SYSTEMS The three themes; management,

organizations and technology Understanding the interaction between

these factors and the information systems is known as information system literacy.

Knowing how to optimize the relationship between technology, organizations, and management is the purpose of this course.

INFORMATION SYSTEMS ARE MORE THAN COMPUTERS

Technology

Management

Organizations

LEVELS IN A FIRM Senior management makes long term

strategic decisions about products and services as well as ensures financial performance of the firm

Middle management carries out the programs and plans of their seniors

Operating management is responsible for daily activities of a business

Senior Manageme

nt

Middle Management

Operational Management

MAJOR BUSINESS FUNCTIONFunction Purpose

Sales and marketing Selling the organization’s products and services

Manufacturing and production

Producing and delivering

Finance and Accounting Managing financial assets and maintaining financial records

Human resources Attracting, developing and maintaining the labor force and maintaining employee records

ManagementManagement’s job is to make sense out of

the many situations faced by organizations, make decisions, and formulate action plans to solve organization problems

Technology• Computer Hardware• Computer Software• Data Management Technology• Networking and telecommunications

technology

Network: It links two or more computers to share data or resources, such as a printer

Internet: It is the world’s most widely used network

Intranets: Internal corporate networks based on Internet technology. Private intranets extended to authorized users outside the organization are called extranets

WWW: Provided by the Internet that uses universally accepted standards of storing, retrieving, formatting, and displaying information in a page format on the net.

CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS

MIS

Computer Science

Operations Research

Sociology

Economics

Psychology

Management Science

AN OVERVIEW OF COMPLEMENTARY ASSETS The study of information systems deals

with issues and insights contributed from technical and behavioral disciplines. The disciplines that contribute to the technical approach are computer science, management science, and operations research, the disciplines contributing to the behavioral approach are psychology, sociology and economics

Technical ApproachAfter all, everything in a computer is

ultimately reduced to a zero or a one. So using the technical approach, you could say that 2+2=4

Behavioral ApproachThe behavioral approach on the other

hand, takes into account the very nature of human beings. Nothing is totally black and white.

Neither approach is better than the other

SOCIO TECHNICAL SYSTEMS Throughout this book you will find a rich

story with four main actors: suppliers of hardware and software (the technologists); business firms making investments and seeking to obtain value from the technology; managers and employees seeking to achieve business value (and other goals); and the contemporary legal, social, and cultural context (the firm’s environment)

The study of MIS arose in the 1970s to focus on the use of computer based information systems in business firms and government agencies.

A SOCIOTECHNICAL PERSPECTIVE ON INFORMATION SYSTEMS

Technology

Alternative 1

Alternative 2

Alternative 3

Alternative 1

Alternative 2

Alternative 3

Final Design Of Technology

Final DesignOf

Organization

Organization