5364 MIS 1 is In Global Business

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1. Information Systems in Global1. Information Systems in Global

Business TodayBusiness Today

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LEARNING OBJECTIVES

Explain why information systems are so

essential in business today.

Define an information system from both a

technical and a business perspective.

Identify and describe the three dimensions of

information systems.

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Assess the complementary assets required

for information technology to provide value

to a business.

Identify and describe contemporary

approaches to the study of information

systems and distinguish between computerliteracy and information systems literacy.

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Smart Systems and Smart Ways of Working

Help Toyota Become Number One

Problem: Tough competition and demandingcustomers.

Solutions: Redesigned order and production

processes reduce costs, increase revenue, andimprove customer service.

Oracle E-Business Suite makes it possible to buildcars to order and forecast demand and productionrequirements more accurately.

Demonstrates ITs role in analyzing market trendsand monitoring quality, efficiency, and costs.

Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data.

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1. The Role of Information Systems in1. The Role of Information Systems in

Business TodayBusiness Today

How information systems are transformingbusiness

Technology, to a large extent, has driven

organizations to change the way they operate andthat includes the way they manage.

Information systems are the foundation for

conducting business today. In many industries,

survival and even existence is difficult withoutextensive use of information technology. No longercan we imagine going to work and conducting

business without them.5


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Globalization opportunities

Many of our new jobs are in the information

industry.

Many of them service whole new markets thatdidnt exist just a few years ago.

The emerging digital firm A digital firm is one in which nearly all of the

organizations significant business relationships withcustomers, suppliers, and employees are digitally

enabled, and key corporate assets are managedthrough digital means.

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Digital firms characteristics

Significant business relationships with customers,suppliers, and employees are digitally enabled and

mediated.

Core business processes are accomplished through

digital networks and span the entire organization or

link multiple organizations.

Key corporate assets intellectual property, core

competencies, and financial and human assets

are managed through digital means.

Internal and external environments are quickly

recognized and dealt with. 7


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And the number one reason digital firms

experience greater opportunities for success

and profits is because they view information

technology as the core of the business and

the primary management tool.

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Strategic business objectives of informationsystems

Growing interdependence between a firms abilityto use information technology and its ability toimplement corporate strategies and achievecorporate goals.

Specifically, business firms invest heavily ininformation to achieve six strategic businessobjectives:

Operational excellence

New products, services, and business models

Customer and supplier intimacy

Improved decision making

Competitive advantage

Survival9


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Operational Excellence

Businesses continuously seek to improve the

efficiency of their operations in order to achieve

higher profitability.

Information systems and technologies are some of

the most important tools available to managers for

achieving higher levels of efficiency and

productivity in business operations, especially when

coupled with changes in business practices andmanagement behavior.

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Information Technology CapitalInformation Technology Capital

InvestmentInvestment

Information technology investment, defined as hardware, software, and communications

equipment, grew from 34% to 50% between 1980 and 2004.

Source: Based on data in U.S. Department ofCommerce, Bureau ofEconomic Analysis, National Incomeand Product Accounts, 2006.

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Virtual Management at AccentureVirtual Management at Accenture

Accenture is a global consulting services and

outsourcing firm with over 129,000 employees servingclients in 48 different countries. It has no operationalheadquarters and no formal branches, encouraging its

employees to move from location to location to work

on projects at client sites. Accenture is a networkedorganization in which groups of professionals cometogether face to face or electronically for short

periods of time to accomplish a specific task; once the

task is accomplished, the individuals join other taskforces. Managers use e-mail, phones, the Web, andother information technologies to manage virtually,

often while they are traveling themselves.

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Virtual Management at AccentureVirtual Management at Accenture

Interactive Session: Organizations

What are the advantages of working in a virtual

environment like the one created by Accenture?

What are the disadvantages?

Would you like to work at a company like

Accenture? Why or why not?

What kinds of companies could benefit from

being run virtually like Accenture? Could all

companies be run virtually like Accenture?

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New Products, Services, and Business Models

Information systems and technologies are a major

enabling tool for firms to create new products and

services, as well as entirely new business models.

A business model describes how a company

produces, delivers, and sells a product or service tocreate wealth.

As successful as Apple Inc, NetFlix, and Wal-Mart

were in their traditional brick-and-mortar existence,they have all introduced new products, services,

and business models that have made them both

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Customer and Supplier Intimacy

When a business really knows its customers, and

serves them well, the way they want to be served,the customers generally respond by returning andpurchasing more.

This raises revenues and profits.

Likewise with suppliers: the more a businessengages its suppliers, the better the suppliers can

provide vital inputs.

This lower costs. Wal-Mart uses RealLink system to link their

suppliers to everyone of Wal-Marts 5,289 storesworldwide.

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Improved Decision Making

Availability of real-time data from the marketplace

when making decisions.

Previously, managers did not have access to

accurate and current data and as such relied on

forecasts, best guesses, and luck. The inability to make informed decision resulted in

raising costs and lost customers.

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Competitive Advantage

Doing things better than your competitors, charging

less for superior products, and responding to

customers and suppliers in real time all add up to

higher sales and higher profits that your

competitors cannot match. Dell Computers and Wal-Mart used information

systems and technologies to separate themselves

from their competition.

Dell remains the most efficient producer of PCs in

the world. Wal-Mart is the most efficient retail store

in the industry.17


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Survival

Firms also invest in information systems and

technologies because they are necessities of doingbusiness.

Information systems is not a luxury. In most

businesses, information systems and technology isthe core to survival.

Citibank was the first to introduce ATMs.

Had a major competitive advantage over theircompetitors.

Others had no choice but to provide ATM services

to banking customers.18


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The Interdependence Between OrganizationsThe Interdependence Between Organizations

and Information Technologyand Information Technology

There is a growing interdependence between a firms 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 wouldlike to do depends on what its systems will permit it to do.19


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2. Perspectives on Information Systems2. Perspectives on Information Systems

What is an information system?

Input, processing, output, and feedback

processes MIS/IS = IT + Processes + People +

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Data and InformationData and 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.21


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Dimensions of information systems

Difference between possessing information

systems literacy and simple computer

literacy.

If you, as a manager, can combine information

from internal sources and external

environments, if you can be part of the

solution and not part of the problem, you can

consider yourself information literate.

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Management information systems (MIS)

deals with behavioral issues as well as

technical issues surrounding the development,

use, and impact of information systems used

by managers and employees in the firm.

As such, MIS is defined as the study ofinformation systems focusing on their use in

business and management.

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Information Systems Are More Than ComputersInformation Systems Are More Than Computers

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

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Organizations

The key elements of an organization are its: People

Structure

Business processes Politics

Culture

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Management

Managers role is to develop the game plan byanalyzing their teams strengths and weaknesses.

They also determine the competitions strengths

and weaknesses.

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Technology

As the products and services on the Internetexpand everyday, your need for new

networking and telecommunications

technology links just seems to grow and grow.

It isnt just a technology: A Businessperspective on information systems

Complementary assets: Organizationalcapital and the right business model

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UPS Competes Globally with Information

Technology

The Interactive Session on Technology describessome of the typical technologies used in computer-

based information systems today.

United Parcel Services (UPS) invests heavily ininformation systems technology to make its

business more efficient and customer oriented.

It uses an array of information technologies.

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UPS Competes Globally with Information

Technology

What are the inputs, processing, and outputs ofUPSs package tracking system?

What technologies are used by UPS? How are

these technologies related to UPSs businessstrategy?

What problems do UPSs information systems

solve? What would happen if these systemswere not available?

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3. Contemporary Approaches to Information

Systems

The study of information systems deals withissues and insights contributed from technical

and behavioral disciplines.

The disciplines that contribute to the technicalapproach are computer science, management

science, and operations research.

The disciplines contributing to the behavioral

approach are psychology, sociology, and

economics.

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Technical approach pure engineeringpure engineering

approachapproach

Behavioral approach takes into account thetakes into account the

very nature of human beings. Nothing isvery nature of human beings. Nothing is

totally black and whitetotally black and white

Neither approach is better than the other,

depending on the situation.

Neither approach is more right than the other,depending on the situation.

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Approach of this text: Socio-technical systems

An organization cant afford to view its information

resources as belonging to either the techies

(technical approach) or the non-techies (behavioral

approach).

Responsibility for information belongs to everyonein the organization. This is the socio-technical

approach a combination of the two approaches.

Everyone has to work together to ensure thatinformation systems serve the entire organization.

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5364 MIS 1 is In Global Business

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