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Chapter 1Chapter 1

The Information Systems The Information Systems Revolution: Transforming Revolution: Transforming Business and ManagementBusiness and Management

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Objectives

• Define an information system.

• Distinguish between computer literacy and information systems literacy.

• Explain why information systems are so important today and how they are transforming organizations and management.

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Objectives

• Compare electronic commerce and electronic business and analyze their relationship to the Internet and digital technology.

• Identify the major management challenges to building and using information systems in organizations.

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part 1

WHY INFORMATION SYSTEMS?

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THE CHANGING BUSINESS ENVIRONMENT

• Globalization

• Industrial economies

• Transformation of the enterprise

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GLOBALIZATION

• Management & control in a global marketplace

• Competition in world markets

• Global work groups

• Global delivery systems

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INDUSTRIAL ECONOMIES• Knowledge- and information-based economies• Productivity• New products & services• Knowledge as an asset• Time-based competition• Shorter product life• Turbulent environment• Limited employee knowledge base

0%

10%

20%

30%

40%

50%

60%

70%

1900

1910

1920

1930

1940

1950

1960

1970

1980

1997

YEAR

% SERVICE

% WHITE COLLAR

% BLUE COLLAR

% FARMING

LABOR FORCE COMPOSITION 1900-1997

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TRANSFORMATION OF ENTERPRISE

• Flattening

• Decentralization

• Flexibility

• Location independence

• Low transaction and coordination costs

• Empowerment

• Collaborative work and team work

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INPUT OUTPUTPROCESS

FEEDBACK

WHAT IS AN INFORMATION SYSTEM

• An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making, coordination, control, analysis, and visualization in an organization.

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INPUT OUTPUTPROCESS

FEEDBACK

INFORMATION SYSTEMINFORMATION SYSTEM

ENVIRONMENTENVIRONMENT

Customers SuppliersCustomers Suppliers

Regulatory Stockholders CompetitorsRegulatory Stockholders CompetitorsAgenciesAgencies

ORGANIZATIONORGANIZATION

FUNCTIONS OF INFO SYSTEM

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DATA & INFORMATION

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

• Information: clusters of facts meaningful & useful to human beings in processes such as making decisions

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COMPUTER-BASED INFORMATION SYSTEMS (CBIS)CBIS)

• CBISs are information systems that rely on computer hardware and software for processing and disseminating info.

• Formal systems are systems resting on accepted and fixed definitions of data and procedures, operating with predefined rules.

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A BUSINESS PERSPECTIVE ON INFORMATION SYSTEMS

• From a business perspective, an information system is an organizational and management solution, based on information technology, to a challenge posed by the environment.

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INFORMATION SYSTEMSINFORMATION SYSTEMS

ORGANIZATIONSORGANIZATIONS TECHNOLOGYTECHNOLOGY

MANAGEMENTMANAGEMENT

INFORMATIOINFORMATIONN

SYSTEMSSYSTEMS

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ORGANIZATIONS

• PEOPLE: Managers, knowledge workers, data workers, production or service workers

• STRUCTURE: Organization chart, groups of specialists, products, geography

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ORGANIZATIONS

• OPERATING PROCEDURES: Standard Operating Procedures (SOP), rules for action

• POLITICS: Power to persuade, get things done

• CULTURE: Customs of behavior

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MANAGEMENT

• Managers set the organizational strategy for responding; and they allocate the human and financial resources to achieve the strategy and coordinate the work. Throughout, they must exercise responsible leadership.

• Levels of management:– Senior managers

– Middle managers

– Operational managers

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COMPUTER TECHNOLOGY

• HARDWARE

• SOFTWARE

• STORAGE

• COMMUNICATIONS

• NETWORKS

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part 2

CONTEMPORARY APPROACHES TO

INFORMATION SYSTEMS

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SOCIOLOGYSOCIOLOGY

ECONOMICSECONOMICSPSYCHOLOGYPSYCHOLOGY

COMPUTER COMPUTER

SCIENCESCIENCEOPERATIONS OPERATIONS

RESEARCHRESEARCH

MANAGEMENTMANAGEMENT

SCIENCESCIENCE

TECHNICAL APPROACHESTECHNICAL APPROACHES

APPROACHES TO INFO SYSTEMS

MISMIS

BEHAVIORAL APPROACHESBEHAVIORAL APPROACHES

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TECHNICAL APPROACH

• Emphasizes mathematically based, normative models to study information systems, as well as the physical technology and formal capabilities of these systems.

• Computer science: computability, computation, data storage and access.

• Management science: development of models for decision making and management practices.

• Operations research: techniques for optimizing selected parameters of organizations.

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BEHAVIORAL APPROACH

• Behavioral issues arise in the development and long-term maintenance of IS.

• Sociologists study IS with an eye toward how groups and organizations shape the development of systems and also how systems affect individuals, groups, and organizations.

• Psychologists study IS with an interest in how formal information is perceived and used by human decision makers.

• Economists study IS with an interest in what impact systems have on control and cost structures within the firm and within markets.

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SOCIOTECHNICAL PERSPECTIVE

• The challenge and excitement of the information system field is that it requires an appreciation and tolerance of many different approaches.

• We stress the need to optimize the performance of the system as a whole. Both the technical and behavioral components need attention.

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SOCIOTECHNICAL PERSPECTIVE

OPTIMIZE SYSTEM PERFORMANCE:

Technology & organization mutually adjust to

One another

Until fit is satisfactory

Page14 figure 1-5

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part 3

THE NEW ROLE OF INFO SYSTEMS IN

ORGANIZATIONS

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SYSTEM INTERDEPENDENCE

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASEDATABASE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

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• 1950s: TECHNICAL CHANGES

• 60s-70s: MANAGERIAL CONTROL

• 80s-90s: INSTITUTIONAL CORE ACTIVITIES

GROWING IMPORTANCE

SCOPE OF INFO SYSTEMS

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WHAT YOU CAN DO ON THE INTERNET

• COMMUNICATE & COLLABORATE

• ACCESS INFORMATION

• DISCUSS

• SUPPLY INFORMATION

• ENTERTAIN

• TRANSACT BUSINESS

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NEW OPTIONS FOR ORGANIZATIONAL DESIGN

• Flattening organizations

• Separating work from location

• Reorganizing work-flows

• Increasing flexibility

• Redefining organizational boundaries

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THE DIGITAL FIRM

• ELECTRONIC MARKET: A marketplace that is created by computer and communication technologies that link many buyers and sellers.

• ELECTRONIC COMMERCE: The process of buying and selling goods and services electronically involving transactions using the Internet, networks, and other digital technologies.

• ELECTRONIC BUSINESS: The use of the Internet and other digital technology for organizational communication and coordination and the management of the firm.

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ELECTRONIC COMMERCE

• Internet links buyers, sellers

• Lowers transaction costs

• Goods & services advertised, bought, exchanged worldwide

• Business-to-business transactions increasing

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ELECTRONIC BUSINESS

• INTRANET: Business builds private, secure network

• E-MAIL, WEB DOCUMENTS, GROUP SOFTWARE: Extends effective communication & control

• EXTRANET: Extension of Intranet to authorized external users

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part 4

USING INFO SYSTEMS——CHALLENGES

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KEY MANAGEMENT ISSUES

• The Strategic Business Challenge: How can businesses use information technology to design organizations that are competitive and effective?

• The Globalization Challenge: How can firms understand the business and system requirements of a global economic environment?

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KEY MANAGEMENT ISSUES

• The Information Architecture Challenge: How can organizations develop an information architecture and information technology infrastructure that supports their business goals?– Information architecture– Information technology infrastructure

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KEY MANAGEMENT ISSUES

• The Information Systems Investment Challenge: How can organizations determine the business value of information systems?

• The Responsibility & Control Challenge: How can organizations design systems that people can control and understand?

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DISCUSSION

• Some people say that information system literacy is more important than computer literacy. Do you agree? Explain why or why not.

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ASSIGNMENT

• Answer the case study questions on page 33.

You should write it in English.

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That’s all for this chapter!