MIS 2000

Chapter 1:Managing the Digital Firm

IS for Management

Outline

• Digital Firm• Data, Information, Knowledge• Information System (IS)• IS User• Information Technology • Characteristics of Useful Data• Pros and cons (risks) associated with IS  

Digital Firm

• Organization in which most of work is supported by electronic (digital) information systems (ISes).

• Examples in chapter:– Toyota’s order management system – links customers,

dealerships, Toyota factories, & Toyota’s suppliers – Dell’s build-to-order system – similar– Wal-Mart's inventory & supplier management system– Fairmont hotels’ system tracking customers’ preferences – UPS’ parcel tracking system

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Digital Firm

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• Changing operations (organizational processes) – UPS, Toyota, Dell

• Inter-organizational linkages and systems (Toyota, Dell)

• Flattening of organizations - less hierarchy (IBM’s transformation)

• Separating work from central location (Accenture)

• Mass customization strategy (Toyota, Dell)

Data, Information, Knowledge

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• Digital firm runs on digital data & information, i.e., on electronic IT supporting these.

• Data: Raw facts (product name, quantity sold, price, sale date)

• Information: Organized & meaningful data (summed quantities of products sold, sales reports)

– Helps understand what is sold, how much money is made

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• Knowledge: Memory structures in human brain• What something is (definitions, relationships)• Why something is (cause-effect relationships)• How to do to something (procedures, skills, experience)• Can be represented through data and information in

communication, books, computers…

Professionals

Clerks

Information Know

ledgeData

Managers

Information System (IS)

• Any system is a set of parts with a common purpose.

• Parts designed to perform different roles: – Input part – takes Data in– Process part – processes/transforms inputted Data– Output part – puts out organized, meaningful Data– Feedback part – takes environment’s response to outputted

information

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Information System (IS)

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• An IS is a system provide information (data organized and meaningful) to users.

ENVIRONMENT

• Other parts of an IS are:- DATA (input, processed, stored, feedback) - MANUAL PROCEDURES performed by Users.

User – primary; manipulates data & IT

User – secondary; consumes information

INPUT- keyboard,

mouse)

PROCESSING, STORAGE, TRANSEFR

- software & hardware parts

OUTPUT- screen, printer

FEEDBACK

DATA DATA

Organized

Information Technology

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• Tools for managing data

• In a computer-based IS, each part (input, process…) is made from particular kinds of IT – special hardware & software

• There are other electronic devices that we also call IT: cell phones, calculators, personal digital assistants, gaming devices

• Pre-electronic technologies (paper)

IS for Management

Characteristics of Useful Data

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• The business purpose of IS is to provide useful information

• Useful information builds on useful data: - accuracy- currency- completeness- relevance- economical

Pros and cons (risks) Associated with IS

• Pros (ups, advantages): Look at case firms in Chapter

• Cons (challenges, risks):– Directions of IT development (tech. risk)– Figuring how to change organization with IT (Dell)– Figuring how to compete with IT, strategy (Apple’s iPod & iTunes)– Financial risks (growing expenses)– More information and communication – always good?– Legal, ethical, responsible use of ITS (Fairmont, info privacy)

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