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Information SystemsInformation Systems

in Business Todayin Business Today

Chapter 1

VIDEO CASES

Case 1: UPS Global Operations with the DIAD IV

Case 2: Google Data Center Efcienc !est Practices

Instr"ctional Vi#eo 1: Green Energ Efcienc in a Data Center Using $i%oli Architect"re

Instr"ctional Vi#eo 2: $o"r I!&'s (aleigh Data Center



1.2 Copyright © 2014 Pearson Education

Management Information Systems, Go!a Edition

Chapter 1" Information Systems in Go!a Business Today

• #nderstand the e$e%ts ofinformation systems on !usinessand their reationship to

go!ai&ation'

• E(pain )hy information systems areso essentia in !usiness today'

• De*ne an information system anddes%ri!e its management,organi&ation, and te%hnoogy%omponents'

+earning O!e%ti-es






• De*ne %ompementary assets ande(pain ho) they ensure that informationsystems pro-ide genuine -aue to an

organi&ation'• Des%ri!e the di$erent a%ademi%

dis%ipines used to study informationsystems and e(pain ho) ea%h

%ontri!utes to our understanding ofthem'

• E(pain )hat is meant !y aso%iote%hni%a systems perspe%ti-e'

+earning O!e%ti-es .%ont'/






• Problem: How to keep in contact with the various parties of the

wood production and procurement chain

• Solutions: Use information systems to enhance experience.

Cutting plans maps and working instructions delivered via a

dedicated e!mail system.

• Ponsse provides technology to make them the most wired in all

of the timber machine industry.

• "emonstrates #$%s role in providing new products and services.

• #llustrates the benefits of utili&ing networks and mobile

applications to enhance customer service information.

E0%ien%y in ood 2ar-esting )ith Information Systems






• 2o) information systems aretransforming !usiness– Emerging mo!ie digita patform

– Gro)ing !usiness use of 3!ig data4– Gro)th in %oud %omputing

• Go!ai&ation opportunities

– Internet has drasti%ay redu%ed %osts ofoperating on go!a s%ae– In%reases in foreign trade, outsour%ing– 5resents !oth %haenges and

opportunities

The 6oe of Information Systems in Business Today






Information technology capital investment, defined as hardware, software, and communications equipment,grew from 32 percent to 52 percent of all invested capital between 19! and 2!!9"

'#(U)* +!+

Information Technology Capital Investment


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(ea# the Interacti%e Session an# #isc"ss the )ollowing *"estions

Interactive Session: Management

• hat 7inds of appi%ations are des%ri!ed in the%ase8 hat !usiness fun%tions do they support8

2o) do they impro-e operationa e0%ien%y andde%ision ma7ing8

• Identify the pro!ems that !usinesses in this %asestudy so-ed !y using mo!ie digita de-i%es'

• hat 7inds of !usinesses are most i7ey to !ene*tfrom e9uipping their empoyees )ith mo!iede-i%es8

• Dis%uss the impi%ations of this statement" 3Thei5hone is not a game %hanger, it:s an industry%hanger'4

6#;;I;G T2E B#SI;ESS <6OM T2E 5A+M O< =O#6 2A;D





• In the emerging, fuy digita *rm"

– Signi*%ant !usiness reationships aredigitay ena!ed and mediated'

– Core !usiness pro%esses area%%ompished through digita net)or7s'

– >ey %orporate assets are manageddigitay'

• Digita *rms o$er greater ?e(i!iityin organi&ation and management'

– Time shifting, spa%e shifting






• Gro)ing interdependen%e !et)een a!iity touse information te%hnoogy and a!iity toimpement %orporate strategies and a%hie-e%orporate goas

• Business *rms in-est hea-iy in informationsystems to a%hie-e si( strategi% !usinesso!e%ti-es"1' Operationa e(%een%e

@' ;e) produ%ts, ser-i%es, and !usiness modes

' Customer and suppier intima%y

' Impro-ed de%ision ma7ing

' Competiti-e ad-antage

' Sur-i-a






In contemporary systems there is a growing interdependence between a firm#s information systems and its business capabilities" $hanges in strategy, rules, and business processes increasingly require changes inhardware, software, databases, and telecommunications" %ften, what the organi&ation would li'e to do dependson what its systems will permit it to do"

'igure +.,

The Interdependence Between Organizations and Information Technology





• Operationa e(%een%e"

– Impro-ement of e0%ien%y to attain

higher pro*ta!iity– Information systems, te%hnoogy an

important too in a%hie-ing greatere0%ien%y and produ%ti-ity

– amart:s 6etai +in7 system in7ssuppiers to stores for superiorrepenishment system






• ;e) produ%ts, ser-i%es, and!usiness modes"

– Business mode" describes howcompany produces, delivers, and sellsproduct or service to create wealth

– Information systems and te%hnoogy

a maor ena!ing too for ne)produ%ts, ser-i%es, !usiness modes

•Examples: Apple’s iPad, Google’sAndroid !, and "et#ix






• Customer and suppier intima%y"

– Ser-ing %ustomers )e eads to%ustomers returning, )hi%h raisesre-enues and pro*ts'•Example: $igh%end hotels that use computers

to trac& customer pre'erences and used tomonitor and customi(e environment

– Intima%y )ith suppiers ao)s them topro-ide -ita inputs, )hi%h o)ers %osts'

•Example: )*Penney’s in'ormation system whichlin&s sales records to contract manu'acturer


13





• Impro-ed de%ision ma7ing

– ithout a%%urate information"

• +anagers must use 'orecasts, best guesses, luc&

• esults in:– verproduction, underproduction

– +isallocation o' resources

– Poor response times

• Poor outcomes raise costs, lose customers

– E(ampe" Veri&on:s e!!ased digitadash!oard to pro-ide managers )ith reatime data on %ustomer %ompaints, net)or7performan%e, ine outages, and so on






•Competiti-e ad-antage

– Dei-ering !etter performan%e

– Charging ess for superiorprodu%ts

– 6esponding to %ustomers and

suppiers in rea time– E(ampes" Appe, amart, #5S






•Sur-i-a– Information te%hnoogies as ne%essity

of !usiness– Industrye-e %hanges

•Example: *itiban&’s introduction o' A-+s

– Go-ernmenta reguations

re9uiring re%ord7eeping•Examples: -oxic !ubstances *ontrol Act,

!arbanes%xley Act






• Information system"

– Set of interreated %omponents

– Coe%t, pro%ess, store, and distri!uteinformation

– Support de%ision ma7ing, %oordination,and %ontro

• Information -s' data– Data are streams of ra) fa%ts'

– Information is data shaped intomeaningfu form'

5erspe%ti-es on Information Systems





(aw data from a supermar'et chec'out counter can be processed and organi&ed to produce meaningfulinformation, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for aspecific store or sales territory"

'igure +.-

Data and Information





• Three a%ti-ities of informationsystems produ%e informationorgani&ations need

– Input" *aptures raw data 'romorgani(ation or external environment

– 5ro%essing" *onverts raw data into

meaning'ul 'orm– Output" -rans'ers processed in'ormation

to people or activities that use it






• <eed!a%7"

– Output is returned to appropriatemem!ers of organi&ation to hepe-auate or %orre%t input stage'

• ComputerFComputer program -s'information system

– Computers and soft)are are te%hni%afoundation and toos, simiar to themateria and toos used to !uid ahouse'






)n information system containsinformation about anorgani&ation and itssurrounding environment"*hree basic activities+input,

processing, and output+ produce the informationorgani&ations need" eedbac' is

output returned to appropriate people or activities in theorgani&ation to evaluate andrefine the input" -nvironmentalactors, such as customers,suppliers, competitors,stoc'holders, and regulatoryagencies, interact with theorgani&ation and its

information systems"

'igure +.

Fnctions of an Information System






.sing information systemseffectively requires anunderstanding of theorgani&ation, management, andinformation technology shapingthe systems" )n informationsystem creates value for thefirm as an organi&ational and

management solution tochallenges posed by theenvironment"

'igure +./

Information Systems !re More Than Compters

f i S G ! di i






• Organi&ationa dimension ofinformation systems

– 2ierar%hy of authority,responsi!iity•!enior management

•+iddle management

•perational management•.nowledge wor&ers

•/ata wor&ers

•Production or service wor&ers




M t I f ti S t G ! Editi






• Organi&ationa dimension ofinformation systems .%ont'/

– Separation of !usiness fun%tions•!ales and mar&eting

•$uman resources

•0inance and accounting

•+anu'acturing and production– #ni9ue !usiness pro%esses

– #ni9ue !usiness %uture

– Organi&ationa poiti%s








• Management dimension ofinformation systems

– Managers set organi&ationastrategy for responding to !usiness%haenges

– In addition, managers must a%t

%reati-ey"•*reation o' new products and services

•ccasionally re%creating theorgani(ation








• Te%hnoogy dimension ofinformation systems

–Computer hard)are and soft)are– Data management te%hnoogy

– ;et)or7ing and tee%ommuni%ationste%hnoogy

•"etwor&s, the 1nternet, intranets andextranets, 2orld 2ide 2eb

– IT infrastru%ture" pro-ides patformthat system is !uit on








(ea# the Interacti%e Session an# #isc"ss the )ollowing *"estions

Interactive Session:Organizations

• hat are the inputs, pro%essing, andoutputs of #5S:s pa%7age tra%7ing system8

• hat te%hnoogies are used !y #5S8 2o)are these te%hnoogies reated to #5S:s!usiness strategy8

•hat !usiness o!e%ti-es do #5S:sinformation systems address8

• hat )oud happen if these systems )erenot a-aia!e8

#5S COM5ETES G+OBA++= IT2 I'T'

Management Information Systems Go!a Edition






• Dimensions of #5S tra%7ingsystem

– Organi&ationa"• Procedures 'or trac&ing pac&ages and

managing inventory and provide in'ormation

– Management"

• +onitor service levels and costs– Te%hnoogy"

• $andheld computers, bar%code scanners,networ&s, des&top computers, and so on








•Business perspe%ti-e oninformation systems"

– Information system is instrument for%reating -aue

– In-estments in informationte%hnoogy )i resut in superior

returns"•Productivity increases

•evenue increases

•!uperior long%term strategic positioning








• Business information -aue %hain

– 6a) data a%9uired and transformedthrough stages that add -aue to that

information– Vaue of information system determined

in part !y e(tent to )hi%h it eads to!etter de%isions, greater e0%ien%y, and

higher pro*ts• Business perspe%ti-e"

– Cas attention to organi&ationa andmanageria nature of information systems








rom a business perspective, information systems are part of a series of valueadding activities for acquiring,transforming, and distributing information that managers can use to improve decision ma'ing, enhanceorgani&ational performance, and, ultimately, increase firm profitability"

'igure +!1

The Bsiness Information #ale Chain







• In-esting in information te%hnoogydoes not guarantee good returns'

• There is %onsidera!e -ariation inthe returns *rms re%ei-e fromsystems in-estments'

• <a%tors"

– Adopting the right !usiness mode

– In-esting in %ompementary assets.organi&ationa and management %apita/








)lthough, on average,investments in informationtechnology produce returns farabove those returned by otherinvestments, there isconsiderable variation acrossfirms"

'igure +.2

#ariation in $etrns on Information Technology Investment







•Compementary assets"– Assets re9uired to deri-e -aue

from a primary in-estment– <irms supporting te%hnoogy

in-estments )ith in-estment in%ompementary assets re%ei-e

superior returns– E(ampe" In-est in te%hnoogy and

the peope to ma7e it )or7 propery








• Compementary assets in%ude"

– Organi&ationa assets, for e(ampe"

• Appropriate business model

• E3cient business processes

– Manageria assets, for e(ampe"

• 1ncentives 'or management innovation

• -eamwor& and collaborative wor& environments

– So%ia assets, for e(ampe"

• -he 1nternet and telecommunicationsin'rastructure

• -echnology standards








*he study of informationsystems deals with issues andinsights contributed fromtechnical and behavioraldisciplines"

'igure +.3

Contemporary !pproaches to Information Systems







• Te%hni%a approa%h

– Emphasi&es mathemati%ay !asedmodes

– Computer s%ien%e, managements%ien%e, operations resear%h

• Beha-iora approa%h

– Beha-iora issues .strategi% !usinessintegration, impementation, et%'/

– 5sy%hoogy, e%onomi%s, so%ioogy

Contemporary Approa%hes to Information Systems







• Management Information Systems,Go!a Edition

– Com!ines %omputer s%ien%e, management

s%ien%e, operations resear%h and pra%ti%aorientation )ith !eha-iora issues

• <our main a%tors

– Suppiers of hard)are and soft)are

– Business *rms

– Managers and empoyees

– <irm:s en-ironment .ega, so%ia, %utura%onte(t/

Contemporary Approa%hes to Information Systems






In a sociotechnical perspective, the performance of a system is optimi&ed when both the technology and theorgani&ation mutually adust to each other until a satisfactory fit is obtained"

'igure +!+4

! Sociotechnical %erspective on Information Systems


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