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Information_Systems_in_Business_Today.ppt
- 1. Management Information Systems MANAGINGTHE DIGITAL FIRM, 12TH EDITION INFORMATION SYSTEMS IN BUSINESS TODAY Chapter 1 VIDEO CASES Case 1: UPS Global Operations with the DIAD IV Case 2: IBM, Cisco, Google: Global Warming by Computer
- 2. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Understanding the effects of information systems on business and their relationship to globalization. • Explain why information systems are so essential in business today. • Define an information system and describe its management, organization, and technology components. Learning Objectives © Prentice Hall 2011 2
- 3. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Define complementary assets and explain how they ensure that information systems provide genuine value to an organization. • Describe the different academic disciplines used to study information systems and explain how each contributes to our understanding of them. • Explain what is meant by a sociotechnical systems perspective. Learning Objectives (cont.) © Prentice Hall 2011 3
- 4. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Problem: Yankee fans choosing to watch games on TV or choose other forms of entertainment • Solutions: Use information systems to enhance experience. Game coverage, statistics, delivered via ubiquitous HDTV monitors, mobiles can order concessions, view replays • Cisco Systems provides technology to make Yankee Stadium the most wired in all of baseball • Demonstrates IT’s role in providing new products and services. • Illustrates the benefits of utilizing networks and mobile applications to enhance entertainment, information. The New Yankee Stadium Looks to the Future © Prentice Hall 2011 4
- 5. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • How information systems are transforming business – Increase in wireless technology use, Web sites – Increased business use of Web 2.0 technologies – Cloud computing, mobile digital platform allow more distributed work, decision-making, and collaboration • Globalization opportunities – Internet has drastically reduced costs of operating on global scale – Presents both challenges and opportunities The Role of Information Systems in Business Today © Prentice Hall 2011 5
- 6. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY The Role of Information Systems in Business Today Information Technology Capital Investment Information technology capital investment, defined as hardware, software, and communications equipment, grew from 32 percent to 52 percent of all invested capital between 1980 and 2009. FIGURE 1-1 © Prentice Hall 2011 6
- 7. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • In the emerging, fully digital firm – Significant business relationships are digitally enabled and mediated – Core business processes are accomplished through digital networks – Key corporate assets are managed digitally • Digital firms offer greater flexibility in organization and management – Time shifting, space shifting The Role of Information Systems in Business Today © Prentice Hall 2011 7
- 8. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Growing interdependence between ability to use information technology and ability to implement corporate strategies and achieve corporate goals • Business firms invest heavily in information systems to achieve six strategic business objectives: 1. Operational excellence 2. New products, services, and business models 3. Customer and supplier intimacy 4. Improved decision making 5. Competitive advantage 6. Survival The Role of Information Systems in Business Today © Prentice Hall 2011 8
- 9. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Operational excellence: –Improvement of efficiency to attain higher profitability –Information systems, technology an important tool in achieving greater efficiency and productivity –Walmart’s RetailLink system links suppliers to stores for superior replenishment system The Role of Information Systems in Business Today © Prentice Hall 2011 9
- 10. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • New products, services, and business models: – Business model: describes how company produces, delivers, and sells product or service to create wealth – Information systems and technology a major enabling tool for new products, services, business models • Examples: Apple’s iPod, iTunes, iPhone, iPad, Google’s Android OS, and Netflix The Role of Information Systems in Business Today © Prentice Hall 2011 10
- 11. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Customer and supplier intimacy: – Serving customers well leads to customers returning, which raises revenues and profits • Example: High-end hotels that use computers to track customer preferences and use to monitor and customize environment – Intimacy with suppliers allows them to provide vital inputs, which lowers costs • Example: J.C.Penney’s information system which links sales records to contract manufacturer The Role of Information Systems in Business Today © Prentice Hall 2011 11
- 12. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Improved decision making – Without accurate information: • Managers must use forecasts, best guesses, luck • Leads to: – Overproduction, underproduction of goods and services – Misallocation of resources – Poor response times • Poor outcomes raise costs, lose customers – Example: Verizon’s Web-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, etc. The Role of Information Systems in Business Today © Prentice Hall 2011 12
- 13. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Operational excellence: – Improvement of efficiency to attain higher profitability • New products, services, and business models: – Enabled by technology • Customer and supplier intimacy: – Serving customers raises revenues and profits – Better communication with suppliers lowers costs • Improved decision making – More accurate data leads to better decisions The Role of Information Systems in Business Today © Prentice Hall 2011 13
- 14. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Competitive advantage – Delivering better performance – Charging less for superior products – Responding to customers and suppliers in real time – Examples: Apple, Walmart, UPS The Role of Information Systems in Business Today © Prentice Hall 2011 14
- 15. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY • Survival – Information technologies as necessity of business – May be: • Industry-level changes, e.g. Citibank’s introduction of ATMs • Governmental regulations requiring record- keeping – Examples: Toxic Substances Control Act, Sarbanes- Oxley Act The Role of Information Systems in Business Today © Prentice Hall 2011 15
- 16. Management Information Systems CHAPTER1: INFORMATION IN BUSINESS SYSTEMS TODAY The Role of Information Systems in Business Today The Interdependence Between Organizations and Information Technology In contemporary systems there is a growing interdependence between a firm’s 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 would like to do depends on what its systems will permit it to do. Figure 1.2 © Prentice Hall 2011 16
Editor's Notes
- #3 Make sure to know exactly what is meant by globalization and a complete understanding of the term. This includes reduction of economic and cultural advantages of developed countries, increased number of companies with operations in multiple countries worldwide, and increased reliance on imports and exports of goods (and jobs). Globalization will be discussed in later slides as well.
- #4 The sociotechnical systems perspective holds that optimal organizational performance is achieved by jointly optimizing the social and technical systems used in production. This helps to avoid the mistaken idea that information systems consist of computers or technology alone.
- #5 In this case, The baseball team using state of the art information systems would be more successful than a team that did not. Imagine an organization like a professional sports franchise to be a good example of the importance of information systems. The point here would be that information systems are vitally important to all forms of business, professional sports included.
- #6 New federal security and accounting laws that require companies to store e-mail for 5 years have spurred the growth of digital information, which is increasing at a rate of 5 exabytes annually. You may be surprised to learn that 5 exabytes of data is equivalent to 37,000 Libraries of Congress. Think about what difference it makes to the world economy, or the U.S. economy, if global operations become much less expensive? What are the challenges to American suppliers of goods and services, and to labor?
- #7 Notice that total investment is over one trillion dollars in 2010, and that over 550 billion dollars of that was invested in information technology. The percentage of total investment devoted to IT has increased so much since 1980. Other kinds of capital investment are machinery and buildings. Why would firms increase IT investment faster than machinery and buildings? The answer is capital substitution: the price of IT capital has been falling exponentially, while the price of machine and buildings has been growing at slightly more than the rate of inflation. Wherever possible, firms would much rather invest in more IT than machinery or buildings because the returns on the investment are greater.
- #8 Time shifting and space shifting are connected to globalization. A digital firm is more likely to benefit from globalization than a traditional firm by allowing business to be conducted at any time (time shifting) and any place (space shifting), digital firms are ideally suited for global operations which take place in remote locations and very different time zones.
- #9 In the Yankee Stadium opening case, the UPS Interactive Session later in the chapter, and with many of the Interactive Sessions and opening cases in the book, explain how various information systems succeeded or failed in achieving the six strategic business objectives. For example, in the Yankee Stadium case, information systems helped the Yankees achieve greater customer intimacy and offer new services. Think about some other business objectives and think about how IT might help firms achieve them. For instance, speed to market is very important to firms introducing new products. How can IT help achieve that objective?
- #10 Walmart is the most efficient retailer in the industry and exemplifies operational excellence. Name other businesses that you believe to exhibit a high level of operational excellence. Do customers perceive operational excellence? Does it make a difference for customer purchasing? What Web sites strike you as really excellent in terms of customer service? You might want to visit the Walmart site and the Amazon site to compare them in terms of ease of use.
- #11 Name other new products or business models that they’ve encountered and how they might relate to new information systems or new technology. Name some really interesting recent digital product innovations. Discuss “green technologies” like wind, solar, and hybrid vehicles. In this context, what role will IT be playing in the development of these technologies?
- #12 What types of companies might rely more on customer and supplier intimacy than others and which companies they feel have served them exceptionally well. Identify online sites that achieve a high degree of customer intimacy. Sites to visit would include Netflix, Amazon, and other sites which have recommender systems to suggest purchase ideas to consumers.
- #13 Have you ever been recipients of exceptional service from a company made possible by improved decision-making and information systems contributed to that level of service? For example, perhaps they had a power outage and it took a very short (or very long) time for the utility company to correct the error.
- #14 This slide is a recap of the previous four slides. Recall which business objectives to be most critical to the success of a business, or whether they all carry equal weight.
- #15 Emphasize that achieving any of the previous four business objectives represents the achievement of a competitive advantage as well.
- #16 Name any examples of companies that failed to survive due to unwillingness or inability to update their information systems. The Sarbanes-Oxley Act requires that public firms keep all data, including e-mail, on record for 5 years. Information systems is useful towards meeting the standards imposed by this legislation.
- #17 The basic point of this graphic is that in order to achieve its business objectives, a firm will need a significant investment in IT. Going the other direction (from right to left), having a significant IT platform can lead to changes in business objectives and strategies. Emphasize the two-way nature of this relationship. Businesses rely on information systems to help them achieve their goals; a business without adequate information systems will inevitably fall short. But information systems are also products of the businesses that use them. Businesses shape their information systems and information systems shape businesses.