The Information Systems Revolution
Transforming Business and Management
Class Activity
• Break into groups of four and – Introduce yourself to the members of your
group and describe yourself to the members of your group
– Information technology can help companies to…
– Identify five knowledge- and information-intense products
VW Mexico and the Internet
• SAP’s ERP system integrated with the web to reduce part ordering time from 10 to 5 days– Enabled dealer to use a browser and get order
information through an intranet on the worldwide web
VW Mexico and the Internet
• SAP’s ERP system integrated with the web to reduce part ordering time from 10 to 5 days– Enabled dealer to use a browser and get order
information through an intranet on the worldwide web
Information Systems…
Can help companies to:– Extend their reach to faraway locations– Offer new products and services– Reshape jobs and work flows, and perhaps
profoundly change the way they conduct business
Three Powerful Worldwide Changes
1. Globalization
2. Transformation of industrial economies to knowledge and information-based economies
3. Transformation of the enterprise
Globalization
• Management & Control In A Global Marketplace
• Competition In World Markets
• Global Work Groups
• Global Delivery Systems
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Globalization
• Information systems are a powerful ally enabling businesses to– Communicate with distributors, suppliers, and
customers worldwide– Operate 24/7– Serve local and international reporting needs– Compete globally by bringing your products
and services to a global market
Transformation of Industrial Economies…
• To knowledge- and information-based service economies.– Increase need for white-collar workers– Manufacturing has moved to low-wage
countries– Knew knowledge- and information-intense
products
Transformation of Industrial Economies…
• To knowledge- and information-based service economies.– Increase need for white-collar workers– Manufacturing has moved to low-wage
countries.– Knew knowledge- and information-intense
products
Transformation of Industrial Economies…
• To knowledge- and information-based service economies.– Increase need for white-collar workers– Manufacturing has moved to low-wage
countries. For how long?– Knew knowledge- and information-intense
products
LABOR FORCE COMPOSITION 1900-1996
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0%
10%
20%
30%
40%
50%
60%
70%
YEAR
% SERVICE% WHITE COLLAR% BLUE COLLAR% FARMING
Economic Transformation
• Knowledge-based Economies• Productivity• New Products & Services• Knowledge As An Asset• Time-based Competition• Shorter Product Life• Turbulent Environment• Limited Employee Knowledge Base
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Knowledge- and Information-Intense Products
• Credit cards
• Overnight package delivery
• Worldwide reservation systems
Transformation Of The Enterprise
• Flattening• Decentralization• Flexibility• Location Independence• Low Transaction Costs• Empowerment• Collaborative Work
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What is an Information System
• A set of interrelated components that– Collects data - INPUT– Transforms data - PROCESS– Disseminates information - OUTPUT
SYSTEMSYSTEM
INPUT OUTPUTPROCESS
FEEDBACK
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FUNCTIONS OF AN INFORMATION SYSTEMFUNCTIONS OF AN INFORMATION SYSTEM
INPUT OUTPUTPROCESS
FEEDBACK
INFORMATION SYSTEMINFORMATION SYSTEM
ENVIRONMENTENVIRONMENT
Customers Suppliers Customers Suppliers
Regulatory Regulatory Stockholders CompetitorsStockholders CompetitorsAgenciesAgencies
ORGANIZATIONORGANIZATION
What is an information system?
• An organizational and management solution, based on information technology, to a challenge posed by the environment.
INFORMATION SYSTEMSINFORMATION SYSTEMS
ORGANIZATIONSORGANIZATIONS TECHNOLOGYTECHNOLOGY
MANAGEMENTMANAGEMENT
INFORMATIOINFORMATIONN
SYSTEMSSYSTEMS
The Key Elements of an Organization
• People
• Structure and operating procedures
• Politics
• Culture
People
1. Knowledge workers– Product or service designers and knowledge
creators
2. Data workers– The paper-pushers
3. Production or service workers– Producers/service providers
Structure
• Sales and Marketing
• Manufacturing
• Finance
• Accounting
• Human Resources
SOCIOTECHNICAL PERSPECTIVE
Information systems are sociotechnical systems. Though they are composed of machines devices, and “hard” physical technology, they require substantial social, organizational, and intellectual investment to make them work properly
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APPROACHES TO INFO SYSTEMS
SOCIOLOGYSOCIOLOGY
POLITICAL POLITICAL SCIENCESCIENCE
PSYCHOLOGYPSYCHOLOGY
COMPUTER COMPUTER
SCIENCESCIENCEOPERATIONS OPERATIONS
RESEARCHRESEARCH
MANAGEMENTMANAGEMENT
SCIENCESCIENCE
MISMIS
TECHNICAL APPROACHESTECHNICAL APPROACHES
BEHAVIORAL APPROACHESBEHAVIORAL APPROACHES
Behavioral Approach
• Focuses on strategic business integration, design, implementation, and utilization
• Focuses on changes in– Attitude– Management and organizational policy– Behavior
SYSTEM INTERDEPENDENCE
BUSINESSBUSINESS
StrategyStrategy
RulesRules
ProceduresProcedures
ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM
HARDWAREHARDWARE
SOFTWARESOFTWARE DATABASEDATABASE
TELE-TELE-COMMUNICATIONSCOMMUNICATIONS
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INTERDEPENDENCEINTERDEPENDENCE
Information System Impacts
• What a business would like to do in five years is often dependent on what its systems will be able to do– Becoming the high-quality or low-cost
producer– Developing new products– Increasing employee productivity
• 1950s: TECHNICAL CHANGES• 60s-70s: MANAGERIAL CONTROL• 80s-90s: INSTITUTIONAL CORE ACTIVITIES
GROWING IMPORTANCE
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SCOPE OF INFO SYSTEMS
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Computing Power
• Doubling every 18 months
• The performance of the microprocessors have improved 25,000 times since their invention 25 years ago
• Soaring power has spawned powerful communications networks the largest of which is…
What You Can Do On The Internet• Communicate & Collaborate
• Access Information – Databases
• Discussions– Chats
• Obtain Information– FTP
• Entertainment – Play…, view…, read…, animate…
• Business Transactions– Advertise, sell, and purchase
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The Number of Internet Users
• Greater than 250 million today!
New Options For Organizational Design
• Flattening Organizations• Separating Work From Location• Increasing Flexibility• Refining Organizational Boundaries• Reorganizing Work Flows
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The Changing Management Process
• Enterprise Resource Planning
• Electronic Commerce
• Electronic Business
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Enterprise Resource Planning
Software Integrates All Facets:
• Planning, Manufacturing, Inventory, Sales, Finance, Accounting
• Transactions Alert All Involved Factors
• Updates Files, Speeds Action, Cuts Cost
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Electronic Commerce
• Internet Links Buyers, Sellers
• Lowers Transaction Costs
• Goods & Services Advertised, Bought, Exchanged Worldwide
• B2B Transactions Increasing
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Electronic Business
• Intranet: Business Builds Private, Secure Network
• E-mail, Web Documents, Group Software Extends Effective Communication & Control
• Virtual Organization
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SALES & MARKETING
COMPANY
FINANCE COMPANY
LOGISTICS
COMPANY
DESIGN
COMPANY
MANUFACTURING
COMPANY
VIRTUAL ORGANIZATION
CORECORE
COMPANYCOMPANY
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CHALLENGE OF INFO SYSTEMS
• STRATEGIC: Maintaining a competitive edge
• GLOBALIZATION:Integrated systems
• INFO ARCHITECTURE: Development
• INVESTMENT: What is the value?
• RESPONSIBILITY & CONTROL: Ethics
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