Mis10 ch01 ppt

1.1 © 2006 by Prentice Hall

Course Objective

1) Explore how information systems can make businesses more

competitive, efficient, and profitable.

2) Gain an understanding of the role of various types of information

systems in organizations.

3) Understand how to use information systems strategically and how

systems can help you make better decisions.

Management Information Systems


4) Discuss how your firm can benefit from conducting business

electronically using Internet technology.

5) Explore many decisions about using hardware and software to improve

the performance of your firm.

6) Gain an understanding of how to organize your company’s data so that

they can be easily accessed and utilized.



7) Provide opportunity to understand how your firm can benefit from

information systems for knowledge management.

8) Gain appreciation as a manager that you will be asked to make many

different kinds of decisions. You will want to know how you can use

information systems to improve your decision making, whether you are

working along or in a group.

9) Discuss the ways to use new information systems to improve the

performance of your firm, via helping your organization build a new

information system.



10) How to measure the business benefits of these investments and how to

make sure that these systems work successfully in your organization.

11) Understand how you can ensure that your firm’s systems are reliable

and secure.

12) Gain tools to know what special issues must be addressed when

developing and managing international information systems.



Information systems in Information systems in

Global Business TodayGlobal Business Today

Chapter 1


OBJECTIVES – chapter 1

Management Information SystemsManagement Information SystemsChapter 1 Chapter 1 Information systems in Global Business TodayInformation systems in Global Business Today

• Explain why information systems are so important today for business and management

• Evaluate the role of information systems in today’s competitive business environment

• Assess the impact of the Internet and Internet technology on business and government


• Define an information system from both a technical and business perspective and distinguish between computer literacy and information systems literacy

OBJECTIVES (Continued)



What is information system

The organized collection,processing, transmission and

dissemination of computerized information in accordance

with defined procedures for making decisions time to time

in an organization.

Information system use both technology and knowledge of

business to enable the company and its partners to

respond instantly to changes.

Management Information SystemsManagement Information Systems

Chapter 1 Chapter 1 Information systems in Global Business TodayInformation systems in Global Business Today


1.1 The Role of Information systems in business today


• 1 Capital management1 Capital management

• 2 Foundation of doing business2 Foundation of doing business

• 3 Productivity3 Productivity

• 4 Strategic opportunity and advantage4 Strategic opportunity and advantage

Why Information Systems Matter Why Information Systems Matter

There are four reasons why IT makes a difference to the There are four reasons why IT makes a difference to the success of a business:success of a business:



• IT is the largest single component of capital investment in the United States.

• Managers and business students need to know how to invest this capital wisely.

• The success of your business in the future may well depend on how you make IT investment decisions.

1 Capital Management: 1 Capital Management:

The Role of Information systems in business todayThe Role of Information systems in business today



Information Technology Capital Investment Information Technology Capital Investment

The Role of Information systems in business today

Source: Based on the data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, Tables 5.2 and 5.8, 2004.



• Most businesses today could not operateMost businesses today could not operate without without extensive use of information systemsextensive use of information systems and and technologies.technologies.

• IT can increase market share.IT can increase market share.

• IT can help a business become a IT can help a business become a high-quality, high-quality, low-cost producer.low-cost producer.

• IT is vital to the development of new products. IT is vital to the development of new products.

2 Foundation of doing business:2 Foundation of doing business:




The Interdependence between Organizations andThe Interdependence between Organizations andInformation Systems Information Systems

Figure 1-2




• IT is one of the most important tools managers have to increase productivity and efficiency of businesses.

• It is estimated that IT has increased productivity in the economy.

• Investment in IT plays a critical role in increasing the productivity of firms.


3 Productivity:



• Create competitive advantage: IT makes it possible to develop competitive advantages.

• New Business Models: Dell Computer has built its competitive advantage on an IT enabled build-to-order business model that other firms have not been able to imitate.


4 Strategic Opportunity and Advantage: -



• Create new services: eBay has developed the largest auction trading platform for millions of individuals and businesses. Competitors have not been able to imitate its success.

• Differentiate yourself from your competitors: Amazon has become the largest book retailer in the United States on the strength of its huge online inventory and recommender system. It has no rivals in size and scope.


Strategic Opportunity and Advantage: (continued)



• Amazon, eBay, Dell, Wal-Mart and Apple's iTunes are just a few firms that have built and maintained technology-based advantages.

How Much Does IT Matter?




• Competitive advantage derives not from the technology, but on how businesses use the technology.

• Innovations in business processes, management and organization are not easily copied from one firm to another.

How Much Does IT Matter?




• 1.Internet growth and technology convergence

• 2.Transformation of the business enterprise

Why IT Now? Digital Convergence and the Changing Business Environment

Growing impact of IT in business firms can be assessed from the following five factors:




• 3.Growth of a globally connected economy

• 4.Growth of knowledge and information-based economies

• 5.Emergence of the digital firm


Why IT Now? Digital Convergence and the Changing Business Environment (Continued)



• Growth of the Internet: 120 million online users in the United States, 500 million global users

• The Internet is bringing about a convergence of telecommunications and computing: VoIP telephones.


1.The Internet and Technology Convergence:



• Growth in e-business, e-commerce, and e-government

• Internet is bringing about rapid changes in markets and market structure: financial services and banking such as eTrade.com.

• The Internet is making many traditional business models obsolete: the corner music store and video store.


The Internet and Technology Convergence: (continued)



• Flattening

• Decentralization

• Flexibility


2.Transformation of the Business Enterprise:



• Location independence

• Low transaction and coordination costs

• Empowerment

• Collaborative work and teamwork


Transformation of the Business Enterprise (Continued):



• Management and control in a global marketplace

• Competition in world markets

• Global workgroups

• Global delivery systems


3. Globalization:



• From Industrial economies to Knowledge and information-based economies

• New products and services

• Knowledge as a central productive and strategic asset


4. Rise of the Information Economy:



• Time-based competition

• Shorter product life

• Limited employee knowledge base


Rise of the Information Economy (Continued):



The Growth of the Information Economy

Figure 1-3


Source: U.S. Department of Commerce, Bureau of the Census, Statistical Abstract of the United States, 2003, Table 615; and Historical Statistics of the United States, Colonial Times to 1970, Vol. 1, Series D, pp. 182-232.


Management Information SystemsManagement Information SystemsChapter 1Chapter 1Information systems in Global Business TodayInformation systems in Global Business Today

• Digitally enabled relationships with customers, suppliers, and employees

• Core business processes accomplished using digital networks

• Agile sensing and responding to environmental changes

• Seamless flow of information within the firm, and with strategic partners


5. Emergence of the Digital Firm:



The Emerging Digital Firm The Emerging Digital Firm

Figure 1-4


Search Engine marketing

E-Mail marketing

Affiliate marketing


1.2 PERSPECTIVES ON INFORMATION SYSTEMS


What Is an Information System?

Technology perspective:Technology perspective: A set of interrelated

components that collect (or retrieve), process, store,

and distribute information to support decision

making and control in an organization


PERSPECTIVES ON INFORMATION SYSTEMS


What is an Information System? (Continued)

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

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




Data and Information

Figure 1-5




Functions of an Information System

Figure 1-6




Business firm invest in Information system because they provide real economic value to the business.

Returns on investment is superior than building,manufacturing unit.

The superior returns will be expressed

as increase in productivity,as increase in revenue(increase in stock market value),as long-term-positioning of the firm

A Business Perspective on Information Systems




The Business Information Value Chain

Figure 1-7


• Information systems literacy:Information systems literacy: Broad-based Broad-based

understanding of information systems that includes understanding of information systems that includes

behavioural knowledge about organizations, behavioural knowledge about organizations,

management and individuals using information management and individuals using information

systems as well as technical knowledgesystems as well as technical knowledge about about

computerscomputers

• Computer literacy:Computer literacy: Knowledge about information Knowledge about information

technology, focusing on understanding how technology, focusing on understanding how

computer technologies workcomputer technologies work






Information Systems Are More than Computers

Figure 1-8



Three Important Dimensions of Information Systems

• 1 Organizations

• 2 Managers

• 3 Technology


You will need to understand and balance these dimensions of information systems in order to create business value.

Dimensions of Information Systems



• People

• Structure

• Business processes

• Culture

• Politics


1 The Organizational Dimension of Information Systems



Managers are:

• Sense makersSense makers

• Decision makersDecision makers

• PlannersPlanners

• Innovators of new processesInnovators of new processes

• Leaders: set agendasLeaders: set agendas


2 The Management Dimension of Information Systems



• Hardware:Hardware: Physical equipment Physical equipment

• Software:Software: Detailed preprogrammed instructions Detailed preprogrammed instructions

• Storage:Storage: Physical media for storing data and the Physical media for storing data and the softwaresoftware


Information technology is one of the tools managers Information technology is one of the tools managers use to cope with change:use to cope with change:

3 The Technology Dimension of Information Systems



• Communications technology:Communications technology: Transfers data Transfers data from one physical location to anotherfrom one physical location to another

• Networks:Networks: Links computers to share data or Links computers to share data or resourcesresources


The Technology Dimension of Information Systems (Continued)

Managers need to know enough about information Managers need to know enough about information technology technology to make intelligent decisions about how to to make intelligent decisions about how to use it for creating business value.use it for creating business value.




Complementary Assets:

are those assets required to derive value from a primary investment

1. Organizational complementary assets2. Managerial complementary assets 3. Social Investment



• Supportive business culture that values efficiency and effectiveness

• Efficient business processes, decentralization of authority

• Highly distributed decision rights

• A strong information system (IS) development team


Organizational capital:




Variation in Returns on Information Technology Investment

Figure 1-9

Source: Based on Erik Brynjolfsson and Lorin M. Hitt, “Beyond Computation: Information Technology, Organizational Transformation and Business Performance.” Journal of Economic Perspectives 14, no. 4 (Fall 2000). Used with permission of the American Economic Association.


Management Capital:

Strong senior mgt support for technical investment

Incentive Systems

Teamwork & Collaborative work environments

Training Programs

Management culture that values flexibility and knowledge




Social Capital:

not made by firm but other firms and government

The internet and telecommunication infrastructure

Networks

Regulations and laws

Presence of technology and service firms in adjacent market

Management Information SystemsManagement Information SystemsChapter 1 Chapter 1 Information systems in Global Business Information systems in Global Business

TodayToday PERSPECTIVES ON INFORMATION SYSTEMS


1.3 CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS


Sociotechnical Systems

Optimize systems performance:

• Technology and organization

• Technology and Organizations mutually adjust to one another until fit is satisfactory


CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS


A Sociotechnical Perspective on Information Systems

Figure 1-11

Mis10 ch01 ppt

Education

role of information

new information systems

information systems

information systems1

firms systems

knowledge of business

business perspective

business benefits