173875236 management information systems ch 1 laudon

8/10/2019 173875236 Management Information Systems CH 1 Laudon

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1-1 © 2011 Pearson Canada Inc.

Chapter

1

Information Systems in

Global Business Today




LEARNING OBJECTIVES

Management Information SystemsChapter 1 Information Systems in Global Business Today

After reading this chapter, you will be able to answer

the following questions:

• How are information systems transforming

business, and what is their relationship to

globalization?

• Why are information systems so essential for

running and managing a business today?

• What exactly is an information system? What are

its management, organization, and technology

components?

Continued …




LEARNING OBJECTIVES (continued)


• What are complementary assets? Why are

complementary assets essential for ensuring that

information systems provide genuine value for an

organization?• What academic disciplines are used to study

information systems? How does each contribute to

an understanding of information systems? What is a

sociotechnical systems perspective?




Smart Systems and Smart Ways of Working Help Toyota Become Number One

• Problem: Tough competition and demanding customers.

• Solutions: Redesigned order and production processes

reduce costs, increase revenue, and improve customer

service.• Oracle E-Business Suite makes it possible to build cars

to order and forecast demand and production

requirements more accurately.

• Demonstrates IT’s role in analyzing market trends andmonitoring quality, efficiency, and costs.

• Illustrates the emerging digital firm landscape where

businesses can use tools to analyze critical data.





The Role of Information Systems in Business Today

• How information systems are transforming business

• Increase in wireless technology use, Web sites

• Shifts in media and advertising

• New federal security and accounting laws

• What is new in Management Information Systems

• see Table 1-1



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• Globalization challenges and opportunities

• A “flattened” world

• Internet has drastically reduced costs of operating on

global scale

• The emerging digital firm





• Strategic business objectives of information systems

• Operational excellence

• New products, services, and business models

• Customer and supplier intimacy• Improved decision making

• Competitive advantage

• Survival






The interdependence between organizations and

information technology

There is a growing interdependence between a firm’s information systems and its business

capabilities. Changes in strategy, rules, and business processes increasingly require

changes in hardware, software, databases, and telecommunications. Often, what theorganization would like to do depends on what its systems will permit it to do.

Figure 1-2



• Operational excellence:

– Improvement of efficiency to attain higher profitability

– Information systems, technology an important tool in

achieving greater efficiency and productivity

– Wal-Mart’s RetailLink system links suppliers to stores

for superior replenishment system





• New products, services, and business

models:

– Business model: describes how company produces,delivers, and sells product or service to create wealth

– Information systems and technology a major enabling

tool for new products, services, business models

• Examples: Apple’s iPod, iTunes, and iPhone





• Customer and supplier intimacy:

– Serving customers well leads to customers returning,

which raises revenues and profits

• Example: High-end hotels that use computers to trackcustomer preferences and use to monitor and customize

environment

– Intimacy with suppliers allows them to provide vital

inputs, which lowers costs





• Improved decision making

– Without accurate information:

• Managers must use forecasts, best guesses, luck

• Leads to:

– Overproduction, underproduction of goods and services

– Misallocation of resources

– Poor response times

• Poor outcomes raise costs, lose customers• Digital Dashboards





Figure 1-3



• Competitive advantage

– Delivering better performance

– Charging less for superior products

– Responding to customers and suppliers in

real time

– Example: Toyota and TPS (Toyota Production

System) enjoy a considerable advantage overcompetitors – information systems are critical

to the implementation of TPS





• Survival

– Information technologies as necessity of

business

– May be:

• Industry-level changes, e.g. Citibank’s introduction

of ATMs

• Governmental regulations requiring record-keeping

– Example: Canadian Rules on the Sarbanes-Oxley Act





Read the Window on Management and then discuss the fol low ing:

• One consulting firm has predicted that video and Web

conferencing will make business travel extinct. Do you

agree? Why or why not?

• What is the distinction between videoconferencing and

telepresence?

• What are the ways in which videoconferencing provides

value to a business? Would you consider it smartmanagement? Explain your answer.

• If you were in charge of a small business, would you

choose to implement videoconferencing? What factors

would you consider in your decision?

Virtual Meetings: Smart Management





What is an information system?

• A set of interrelated components that

collect (or retrieve), process, store, anddistribute information to support decision

making and control in an organization

Perspectives on Information Systems






Raw data from a supermarket checkout counter can be processed and organized to produce

meaningful information, such as the total unit sales of dish detergent or the total salesrevenue from dish detergent for a specific store or sales territory.

Figure 1-4

Data and Information






Functions of an information system

Figure 1-5




• Organizational dimension of

information systems

– Hierarchy of authority, responsibility• Senior management

• Middle management

• Operational management

• Knowledge workers• Data workers

• Production or service workers








Figure 1-7




• Organizational dimension of information

systems (cont.)

– Separation of business functions

• Sales and marketing

• Human resources

• Finance and accounting

• Manufacturing and production

– Unique business processes – Unique business culture

– Organizational politics






• Management dimension of

information systems

– Managers set organizational strategy forresponding to business challenges

– In addition, managers must act creatively:

• Creation of new products and services

• Occasionally re-creating the organization






• Information technology dimension ofinformation systems

– Computer hardware and software – Data management technology

– Networking and telecommunications technology

– IT infrastructure: provides platform on which thesystem is built






• Read the Window on Technology, and then

discuss the following questions:• What are the inputs, processing, and outputs of

UPS’s package tracking system?

• What technologies are used by UPS? How are these

technologies related to UPS’s business strategy?

• What problems do UPS’s information systems solve?

What would happen if these systems were not

available?

UPS Competes Globally with Information

Technology






• It is not just technology: a businessperspective on information systems:

– Information system is instrument forcreating value

– Investments in information technology willresult in superior returns:

• Productivity increases• Revenue increases

• Superior long-term strategic positioning






• Complementary assets:

– Assets required to derive value from a

primary investment

– Firms supporting technology investments

with investment in complementary assets

receive superior returns – E.g.: invest in technology and the people to

make it work properly



M I f i S






Figure 1-9

M t I f ti S t




• Technical approach

• Behavioral approach

• Approach of this text: Sociotechnical

systems

Contemporary Approaches to Information Systems


M t I f ti S t






M t I f ti S t






Figure 1-11



Chapter 1

Information Systems in

Global Business Today

173875236 management information systems ch 1 laudon

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