By: Mr Hashem AlaidarosMIS 211

Learning Objectives1. Describe the differences between Information,

Data, Information System, Information Technology, and Management Information Systems.

2. Describe the strategic business objectives

3. Describe the three dimensions of information system

4. Apply what you learn in two case studies: Virtual meeting and UPS.

Data VS. Information

•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 sales revenue from dish detergent for a specific store or sales territory.

Data VS. Information• Data are streams of raw facts• Information is processed data that is meaningful; it usually

tells users something that they did not already know.

Information is processed data by summing, ordering, averaging, grouping, comparing, or other similar operations

Examples:Data: list of student agesInformation: the average of their age

Information System Information system is a group of five components that

interact to produce information.The Components are:

What is the different between IT and IS?

Management Information SystemManagement information systems (MIS) is a

computer-based system that transform the data into information useful to mangers and decision makers

Information Technology Capital InvestmentInformation Technology Capital Investment

Strategic Business Objectives Business firms invest heavily in information systems to

achieve six strategic business objectives:

1. Operational excellence2. New products, services, and business models3. Customer and supplier intimacy4. Improved decision making5. Competitive advantage6. Survival

Strategic Objectives1. 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

Strategic Objectives2. 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, Netflix’s Internet-based

DVD rentals

Strategic Objectives3. Customer and supplier intimacy:

Serving customers well leads to customers returning, which raises revenues and profits Example: High-end hotels that use computers to track customer

preferences and use to monitor and customize environment

Intimacy with suppliers allows them to provide vital inputs, which lowers costs Example: J.C.Penney’s information system which links sales records

to contract manufacturer

Strategic Objectives4. 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 customersExample: Verizon’s Web-based digital dashboard to provide

managers with real-time data on customer complaints, network performance, line outages, etc.

Strategic ObjectivesOperational excellence:

Improvement of efficiency to attain higher profitabilityNew products, services, and business models:

Enabled by technologyCustomer and supplier intimacy:

Serving customers raises revenues and profitsBetter communication with suppliers lowers costs

Improved decision makingMore accurate data leads to better decisions

Strategic Objectives5. Competitive advantage

Delivering better performanceCharging less for superior productsResponding to customers and suppliers in real timeExample: Toyota and TPS (Toyota Production System) enjoy

a considerable advantage over competitors – information systems are critical to the implementation of TPS

Strategic Objectives6. Survival

Information technologies as necessity of businessMay be:

Industry-level changes, e.g. Citibank’s introduction of ATMs Governmental regulations requiring record-keeping

Examples: Toxic Substances Control Act, Sarbanes-Oxley Act

Business firm and IS The Interdependence Between The Interdependence Between

Organizations and Information Organizations and Information TechnologyTechnology

Business firm and ISIn order to achieve its business objectives, a firm will need a

significant investment in IT. Going the other direction (from right to left), having a significant IT

platform can lead to changes in business objectives and strategies. Emphasize the two-way nature of this relationship. Businesses rely on information systems to help them achieve their

goals; a business without adequate information systems will inevitably fall

short. Businesses shape their information systems and information

systems shape businesses.

Business firm and ISIn contemporary systems 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 the organization would like to do depends on what its systems will permit it to do.

Three Dimensions of IS•Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems.

•An information system creates value for the firm as an organizational and management solution to challenges posed by the environment

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

1. OrganizationOrganizational dimension of information systems

Hierarchy of authority, responsibility Senior management Middle management Operational management Knowledge workers Data workers Production or service workers

Cont.Levels in a firm

Cont.Organizational dimension of information systems

(cont.)Separation of business functions

Sales and marketing Human resources Finance and accounting Manufacturing and production

Unique business processesUnique business cultureOrganizational politics

2. Management Management dimension of information systems

Managers set organizational strategy for responding to business challenges

In addition, managers must act creatively: Creation of new products and services Occasionally re-creating the organization

3. TechnologyTechnology dimension of information systems

Information technology is at the heart of information systems. While organization and management are important too, it’s the technology that enables the systems and the organizations and managers who use the technology.

Computer hardware and software

Data management technology

Networking and telecommunications technology

Networks, the Internet, intranets and extranets, World Wide Web

IT infrastructure: provides platform that system is built on

Digital FirmDigital firms offer greater flexibility in organization

and managementTime shifting, space shifting

Why a digital firm is more likely to benefit from globalization than a traditional firm?

The right idea is that by allowing business to be conducted at any time (time shifting) and any place (space shifting), digital firms are ideally suited for global operations which take place in remote locations and very different time zones.

Case studiesCase study 1: Virtual meeting

Advantages of small and large business

Case study 2: UPSHow it worksWhat is data, information system, and information in

UPSWhat are the three IS dimensions in UPS

The Role of Information Systems in Business Today

Virtual Meetings: Smart ManagementVirtual Meetings: Smart ManagementCase Study: Read the Interactive Session in your book and then discuss the

following questions:

• What are the advantages of using videoconferencing technologies? What are the disadvantages?

• What is telepresence and what sorts of companies are best suited to use it as a communications tool?

• What kinds of companies could benefit from using videoconferencing? Are there any companies that might not derive any benefits from this technology?

Virtual Meetings – Case Study 1Videoconferencing allows individuals at two or more

locations to communicate through two-way video and audio transmissions at the same time.

Telepresence is the top-of-the-line videoconferencing technology that strives to make users feel as if they are actually present in a location different from their own.

Telepresence products provide the highest-quality videoconferencing available to date.

Cont.Companies can conduct online meetings that may be helpful

for training and sales presentations, sharing documents and presentations, and providing online product demonstrations.

Anything that saves company resources, like time and money,

while still providing good to excellent communication quality, should be considered smart management.

Capabilities for small & medium companies:Online meetings, online events, Web-touch sales, eLearning, shared

workspaces, instant collaboration

Webinars that provide an opportunity to train employees, customers, and channel partners on new products and services to accelerate time-to-market

Web-touch sales can instantly bring decision makers and subject matter experts together so questions get answered quickly and the sales cycle gets shorter. Stay connected between meetings with a company sales portal. Get the reports and pipeline forecasts necessary to maximize the efforts of the sales force and meet sales quotas.

Capabilities for large businesses:It makes it easy for global employees to work with colleagues over

the Web like they do in person. Cisco WebEx solutions allow employees to connect to each other across firewalls, across platforms, and across the globe.

Companies get Web meetings, instant messaging and virtual teams spaces in one place. These capabilities are delivered on an open platform that enables organizations to build collaboration into any business process.

The technologies are easy to implement and easy to manage, without adding IT equipment or resources.

Cont.Companies save time and money because They don’t have to build the applications themselvesSomeone else manages the technologySomeone else provides the overhead in terms of

technology, technicians, and system upgrades.

UPS – Case study 2United Parcel Service (UPS), the world’s largest air and

ground package-distribution company, started out in 1907 in a closet-size basement office.

Two teenagers from Seattle with two bicycles and one phone

Today UPS delivers more than 13 million parcels and documents daily throughout the United States and more than 200 other countries and territories.

How UPS works1. Using a handheld computer called a Delivery Information Acquisition

Device (DIAD), UPS drivers automatically capture customers’ signatures along with pickup, delivery, and time-card information.

2. The drivers then place the DIAD into their truck’s vehicle adapter, an information-transmitting device that is connected to the cellular telephone network.

3. Package tracking information is then transmitted to UPS’s computer network for storage and processing in UPS’s main computers.

4. From there, the information can be accessed worldwide to provide proof of delivery to the customer or to respond to customer queries.

Cont.Through its automated package tracking system, UPS can

monitor packages throughout the delivery process. At various points along the route from sender to receiver, a bar

code device scans shipping information on the package label; the information is then fed into the central computer.

Customer service representatives can check the status of any package from desktop computers linked to the central computers and are able to respond immediately to inquiries from customers.

UPS customers can also access this information from the company’s Web site using their own computers or wireless devices, such as pagers and cell phones.

ContAnyone with a package to ship can access the UPS Web

site to track packages, check delivery routes, calculate shipping rates, determine time in transit, and schedule a pickup

The data collected at the UPS Web site are transmitted to the UPS central computer and then back to the customer after processing.

Cont.What is data, information system, and information in UPS technology?Data: The inputs include package information, customer signature,

pickup delivery, current location (while en route), and billing and customer clearance documentation.

Information System: The data are transmitted to a central computer and stored for retrieval. Data are also reorganized so that they can be tracked by customer account, date, driver, and other criteria.

Information: The outputs include pickup and delivery times, location while en route, and package recipient. The outputs also include various reports, such as all packages for a specific account or a specific driver or route, as well as summary reports for management.

Cont.IT and Business Strategies:UPS has used the same strategy for over 90 years. Its strategy

is to provide the “best service and lowest rates.” One of the most visible aspects of technology is the

customer’s ability to track his/her package via the UPS Web site.

Thus, the technology described in the scenario enables UPS to be more competitive, efficient, and profitable.

The result is an information system solution to the business challenge of providing a high level service with low prices in the face of mounting competition.

Dimensions of UPS tracking system1. Organizational:

Procedures for tracking packages and managing inventory and provide information

2. Management: Monitor service levels and costs

3. Technology: Handheld computers, bar-code scanners, networks, desktop

computers, etc.

Cont.What is technology in UPS?Hardware: include handheld computers (DIADs), barcode

scanning systems, wired and wireless communications networks, desktop computers, UPS’s central computer (Server), and storage technology for the package delivery data.

Telecommunication: for transmitting data through cellular phone networks.

Software for tracking packages, calculating fees, maintaining customer accounts and managing logistics, as well as software to access the World Wide Web.

Cont.With poor technology, good management and organizational

procedures would not significantly increase efficiency;

without good organizational procedures, even the highest-quality technology wouldn’t prevent frequent errors and data loss;

without good management, the company would not make appropriate decisions about how to use the technology and what procedures to use.

Group discussionHow the virtual meeting technology affect the six

strategic objectives? Explain your opinionHow UPS affect the six strategic objectives? Explain

your opinion.

Give examples of data, information system, and information of your company.

Explain how your company align with the six strategic objectives.

Explain the three dimensions of IS of your company.