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1Chapter
InformationSystemsinGlobalBusinessToday1ChapterInformationSystemsiLEARNINGOBJECTIVESManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayUnderstandingtheeffectsofinformationsystemsonbusinessandtheirrelationshiptoglobalization.Explainwhyinformationsystemsaresoessentialinbusinesstoday.Defineaninformationsystemanddescribeitsmanagement,organization,andtechnologycomponents.LEARNINGOBJECTIVESManagementDefinecomplementaryassetsandexplainhowtheyensurethatinformationsystemsprovidegenuinevaluetoanorganization.Describethedifferentacademicdisciplinesusedtostudyinformationsystemsandexplainhoweachcontributestoourunderstandingofthem.Explainwhatismeantbyasociotechnicalsystemsperspective.LEARNINGOBJECTIVES(Continued)ManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayDefinecomplementaryassetsanCASESTUDY:NBATeamsMakeaSlamDunkwithInformationTechnologyProblem:Lackofharddatausableindecision-makingprocesses,costlyandcompetitivemarket.Solutions:Developedanewsystemdesignedtocollectandorganizedatausingvideoclipsofgames.SynergySportsTechnologytagsvideoofeachgamewithhundredsofdescriptivecategoriesandallowscoachesandplayerstostreamgamefootagefromtheWeb.DemonstratesIT’sroleininnovationandimprovingbusinessprocesses.IllustrateshowtheWebhasallowedbusinessestousenewtoolstoanalyzecriticaldata.ManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayCASESTUDY:NBATeamsMakeaSManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystemsinBusinessTodayInformationTechnologyCapitalInvestmentFigure1-1Informationtechnologyinvestment,definedashardware,software,andcommunicationsequipment,grewfrom32%to51%between1980and2008.
Source:BasedondatainU.S.DepartmentofCommerce,BureauofEconomicAnalysis,NationalIncomeandProductAccounts,2008.ManagementInformationSystemsTheRoleofInformationSystemsinBusinessToday1.1.1HowinformationsystemsaretransformingbusinessIncreaseinwirelesstechnologyuse,WebsitesShiftsinmediaandadvertisingNewfederalsecurityandaccountinglaws1.1.2NewcontentsofIS1.1.3Globalization
opportunitiesInternethasdrasticallyreducedcostsofoperatingonglobalscalePresentsbothchallengesandopportunitiesManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystem1.1.4Intheemerging,fullydigitalfirmSignificantbusinessrelationshipsaredigitallyenabledandmediatedCorebusinessprocessesareaccomplishedthroughdigitalnetworksKeycorporateassetsaremanageddigitallyGreaterflexibilityinorganizationandmanagement(Timeshifting,spaceshifting)ManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystemsinBusinessToday1.1.4Intheemerging,fullydReadtheInteractiveSessionandthendiscussthefollowingquestions:
Whataretheadvantagesofusingvideoconferencingtechnologies?Whatarethedisadvantages?Whatistelepresenceandwhatsortsofcompaniesarebestsuitedtouseitasacommunicationstool?Whatkindsofcompaniescouldbenefitfromusingvideoconferencing?Arethereanycompaniesthatmightnotderiveanybenefitsfromthistechnology?VirtualMeetings:SmartManagementTheRoleofInformationSystemsinBusinessTodayManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayReadtheInteractiveSessionaTheRoleofInformationSystemsinBusinessTodayManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheInterdependenceBetweenOrganizationsandInformationTechnologyIncontemporarysystemsthereisagrowinginterdependencebetweenafirm’sinformationsystemsanditsbusinesscapabilities.Changesinstrategy,rules,andbusinessprocessesincreasinglyrequirechangesinhardware,software,databases,andtelecommunications.Often,whattheorganizationwouldliketododependsonwhatitssystemswillpermitittodo.Figure1-2TheRoleofInformationSystem1.1.5Businessfirmsinvestheavilyininformationsystemstoachievesixstrategicbusinessobjectives:OperationalexcellenceNewproducts,services,andbusinessmodelsCustomerandsupplierintimacyImproveddecisionmakingCompetitiveadvantageSurvivalManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystemsinBusinessToday1.1.5Businessfirmsinvesthe1.OperationalexcellenceImprovementofefficiencytoattainhigherprofitabilityInformationsystems,technologyanimportanttoolinachievinggreaterefficiencyandproductivityWal-Mart’sRetailLinksystemlinkssupplierstostoresforsuperiorreplenishmentsystemManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystemsinBusinessToday1.OperationalexcellenceManage2.Newproducts,services,andbusinessmodelsBusinessmodel:describeshowcompanyproduces,delivers,andsellsproductorservicetocreatewealthInformationsystemsandtechnologyamajorenablingtoolfornewproducts,services,businessmodelsExamples:Apple’siPod,iTunes,andiPhone,Netflix’sInternet-basedDVDrentalsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystemsinBusinessToday2.Newproducts,services,and3.CustomerandsupplierintimacyServingcustomerswellleadstocustomersreturning,whichraisesrevenuesandprofitsExample:High-endhotelsthatusecomputerstotrackcustomerpreferencesandusetomonitorandcustomizeenvironmentIntimacywithsuppliersallowsthemtoprovidevitalinputs,whichlowerscostsExample:J.C.Penney’sinformationsystemwhichlinkssalesrecordstocontractmanufacturerManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystemsinBusinessToday3.Customerandsupplierintima4.ImproveddecisionmakingWithoutaccurateinformation:Managersmustuseforecasts,bestguesses,luckLeadsto:Overproduction,underproductionofgoodsandservicesMisallocationofresourcesPoorresponsetimesPooroutcomesraisecosts,losecustomersExample:Verizon’sWeb-baseddigitaldashboardtoprovidemanagerswithreal-timedataoncustomercomplaints,networkperformance,lineoutages,etc.ManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystemsinBusinessToday4.ImproveddecisionmakingMana5.CompetitiveadvantageDeliveringbetterperformanceCharginglessforsuperiorproductsRespondingtocustomersandsuppliersinrealtimeExample:ToyotaandTPS(ToyotaProductionSystem)enjoyaconsiderableadvantageovercompetitors–informationsystemsarecriticaltotheimplementationofTPSManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystemsinBusinessToday5.CompetitiveadvantageManagem6.SurvivalInformationtechnologiesasnecessityofbusinessMaybe:Industry-levelchanges,e.g.Citibank’sintroductionofATMsGovernmentalregulationsrequiringrecord-keepingExamples:ToxicSubstancesControlAct,Sarbanes-OxleyActManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTheRoleofInformationSystemsinBusinessToday6.SurvivalManagementInformatiInformationsystem:SetofinterrelatedcomponentsCollect,process,store,anddistributeinformationSupportdecisionmaking,coordination,andcontrolInformationvs.dataDataarestreamsofrawfactsInformationisdatashapedintomeaningfulformPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayInformationsystem:PerspectivPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayRawdatafromasupermarketcheckoutcountercanbeprocessedandorganizedtoproducemeaningfulinformation,suchasthetotalunitsalesofdishdetergentorthetotalsalesrevenuefromdishdetergentforaspecificstoreorsalesterritory.Figure1-3DataandInformationPerspectivesonInformationSyInformationsystem:ThreeactivitiesproduceinformationorganizationsneedInput:CapturesrawdatafromorganizationorexternalenvironmentProcessing:ConvertsrawdataintomeaningfulformOutput:TransfersprocessedinformationtopeopleoractivitiesthatuseitPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayInformationsystem:ThreeactiPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayAninformationsystemcontainsinformationaboutanorganizationanditssurroundingenvironment.Threebasicactivities—input,processing,andoutput—producetheinformationorganizationsneed.Feedbackisoutputreturnedtoappropriatepeopleoractivitiesintheorganizationtoevaluateandrefinetheinput.Environmentalactors,suchascustomers,suppliers,competitors,stockholders,andregulatoryagencies,interactwiththeorganizationanditsinformationsystems.Figure1-4FunctionsofanInformationSystemPerspectivesonInformationSyFeedback:OutputreturnedtoappropriatemembersoforganizationtohelpevaluateorcorrectinputstageComputer/Computerprogramvs.informationsystemComputersandsoftwarearetechnicalfoundationandtools,similartothematerialandtoolsusedtobuildahousePerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayFeedback:PerspectivesonInfoPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayUsinginformationsystemseffectivelyrequiresanunderstandingoftheorganization,management,andinformationtechnologyshapingthesystems.Aninformationsystemcreatesvalueforthefirmasanorganizationalandmanagementsolutiontochallengesposedbytheenvironment.Figure1-5InformationSystemsAreMoreThanComputersPerspectivesonInformationSyOrganizationaldimensionofinformationsystemsHierarchyofauthority,responsibilitySeniormanagementMiddlemanagementOperationalmanagementKnowledgeworkersDataworkersProductionorserviceworkersPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayOrganizationaldimensionofinPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayBusinessorganizationsarehierarchiesconsistingofthreeprincipallevels:seniormanagement,middlemanagement,andoperationalmanagement.Informationsystemsserveeachoftheselevels.Scientistsandknowledgeworkersoftenworkwithmiddlemanagement.Figure1-6LevelsinaFirmPerspectivesonInformationSyOrganizationaldimensionofinformationsystems(cont.)SeparationofbusinessfunctionsSalesandmarketingHumanresourcesFinanceandaccountingManufacturingandproductionUniquebusinessprocessesUniquebusinesscultureOrganizationalpoliticsPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayOrganizationaldimensionofinManagementdimensionofinformationsystemsManagerssetorganizationalstrategyforrespondingtobusinesschallengesInaddition,managersmustactcreatively:CreationofnewproductsandservicesOccasionallyre-creatingtheorganizationPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayManagementdimensionofinformTechnologydimensionofinformationsystemsComputerhardwareandsoftwareDatamanagementtechnologyNetworkingandtelecommunicationstechnologyNetworks,theInternet,intranetsandextranets,WorldWideWebITinfrastructure:providesplatformthatsystemisbuiltonPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayTechnologydimensionofinformReadtheInteractiveSession:Technology,andthendiscussthefollowingquestions:Whataretheinputs,processing,andoutputsofUPS’spackagetrackingsystem?WhattechnologiesareusedbyUPS?HowarethesetechnologiesrelatedtoUPS’sbusinessstrategy?WhatproblemsdoUPS’sinformationsystemssolve?Whatwouldhappenifthesesystemswerenotavailable?
UPSCompetesGloballywithInformationTechnologyPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayUPSCompetesGloballywithInfDimensionsofUPStrackingsystemOrganizational:ProceduresfortrackingpackagesandmanaginginventoryandprovideinformationManagement:MonitorservicelevelsandcostsTechnology:Handheldcomputers,bar-codescanners,networks,desktopcomputers,etc.PerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayDimensionsofUPStrackingsys1.2.3BusinessperspectiveoninformationsystemsInformationsystemisinstrumentforcreatingvalueInvestmentsininformationtechnologywillresultinsuperiorreturns:ProductivityincreasesRevenueincreasesSuperiorlong-termstrategicpositioningPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessToday1.2.3BusinessperspectiveonBusinessinformationvaluechainRawdataacquiredandtransformedthroughstagesthataddvaluetothatinformationValueofinformationsystemdeterminedinpartbyextenttowhichitleadstobetterdecisions,greaterefficiency,andhigherprofitsBusinessperspective:CallsattentiontoorganizationalandmanagerialnatureofinformationsystemsPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayBusinessinformationvaluechaPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayFromabusinessperspective,informationsystemsarepartofaseriesofvalue-addingactivitiesforacquiring,transforming,anddistributinginformationthatmanagerscanusetoimprovedecisionmaking,enhanceorganizationalperformance,and,ultimately,increasefirmprofitability.Figure1-7TheBusinessInformationValueChainPerspectivesonInformationSyPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayAlthough,onaverage,investmentsininformationtechnologyproducereturnsfarabovethosereturnedbyotherinvestments,thereisconsiderablevariationacrossfirms.Figure1-8VariationinReturnson
InformationTechnologyInvestmentPerspectivesonInformationSyInvestingininformationtechnologydoesnotguaranteegoodreturnsConsiderablevariationinthereturnsfirmsreceivefromsystemsinvestmentsFactors:AdoptingtherightbusinessmodelInvestingincomplementaryassets(organizationalandmanagementcapital)PerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayInvestingininformationtechn1.2.4ComplementaryassetsAssetsrequiredtoderivevaluefromaprimaryinvestmentFirmssupportingtechnologyinvestmentswithinvestmentincomplementaryassetsreceivesuperiorreturnsE.g.:investintechnologyandthepeopletomakeitworkproperlyPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessToday1.2.4ComplementaryassetsPersComplementaryassetsinclude:Organizationalinvestments,e.g.AppropriatebusinessmodelEfficientbusinessprocessesManagerialinvestments,e.g.IncentivesformanagementinnovationTeamworkandcollaborativeworkenvironmentsSocialinvestments,e.g.TheInternetandtelecommunicationsinfrastructureTechnologystandardsPerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayComplementaryassetsinclude:PerspectivesonInformationSystemsManagementInformationSystemsChapter1InformationSystemsinGlobalBusinessTodayThestudyofinformationsystemsdealswithissuesandinsightscon
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