Lecture 1
Information Systems
in Business Today
Management
TextInformation
Book Systems
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Learning Objectives
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.
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 social-technical systems perspective.
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Management Information Systems
Information Systems in Business Today-
Information Systems?
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Management Information Systems
Information Systems in Business Today-
Information 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 environment.
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Management Information Systems
Information Systems in Business Today-
Perspectives on Information Systems
Information system
– Set of interrelated components
– Information is an ordered set of data that you can understand and
act on.
– Collect, process, store, and distribute information
– Support decision making, coordination, and control
Information vs. data
– Data are streams of raw facts
– Information is data shaped into meaningful form
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Management Information Systems
Information Systems in Business Today-
Perspectives on Information Systems (Cont.)-
Data & 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.
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Management Information Systems
Information Systems in Business Today-
Perspectives on Information Systems (Cont.)-
Data & Information (Cont.)
Three main activities of information systems produce
information organizations need
1. Input: Captures raw data from organization or external
environment
2. Processing: Converts raw data into meaningful form
3. Output: Transfers processed information to people or activities
that use it
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Management Information Systems
Information Systems in Business Today-
Perspectives on Information Systems (Cont.)-
Data & Information (Cont.)
Another two activities of information systems produce
information organizations need
– Feedback
• The output returned to appropriate members of the organization
to help evaluate or correct the input stage
– Computer/Computer program vs. information system
• Computers and software are technical foundations and tools,
similar to the material and tools used to build a house
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Management Information Systems
Information Systems in Business Today-
Perspectives on Information Systems (Cont.)-
Functions on an Information System
An information system contains
information about an organization
and its surrounding environment.
Three basic activities, input,
processing, and output produce the
information organizations need.
Feedback is output returned to
appropriate people or activities in
the organization to evaluate and
refine the input.
Environmental actors, such as
customers, suppliers, competitors,
stockholders, and regulatory
agencies, interact with the
organization and its information
systems.
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Information Systems in Business Today-
The Role of Information Systems in Business 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 platforms allow more distributed
work, decision-making, and collaboration
Globalization opportunities
– The Internet has drastically reduced costs of operating on a global
scale
– Presents both challenges and opportunities
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Information Systems in Business Today-
The Role of Information Systems in Business Today (Cont.)
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: Flexible working time
– Space shifting: Share data through computer networks
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Information Systems in Business Today-
The Role of Information Systems in Business Today (Cont.)
Growing interdependence between the ability to use
information technology and the ability to implement corporate
strategies and achieve corporate goals
Business
Business firms
firms invest
invest heavily
heavily in information
in information systemssystems to
to achieve
sixachieve six
strategic strategic
business business objectives:
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
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Information Systems in Business Today-
The Role of Information Systems in Business Today (Cont.)
Business firms invest heavily in information systems to
achieve six strategic business objectives: (Cont.)
1. Operational excellence
– Improvement of efficiency to attain higher profitability
– Information systems, technology an important tool in achieving
greater efficiency and productivity
• Example: Walmart’s RetailLink system links suppliers to stores for
a superior replenishment system
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Information Systems in Business Today-
The Role of Information Systems in Business Today (Cont.)
Business firms invest heavily in information systems to
achieve six strategic business objectives: (Cont.)
2. New products, services, and business models
– Business model: describes how the 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
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Information Systems in Business Today-
The Role of Information Systems in Business Today (Cont.)
Business firms invest heavily in information systems to
achieve six strategic business objectives: (Cont.)
3. Customer & supplier intimacy
– A well-serving customer lead to customer’s returning, which
raises revenues and profits
• Example: High-end hotels that use computers to track customer
preferences and use to monitor and customize the 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
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Information Systems in Business Today-
The Role of Information Systems in Business Today (Cont.)
Business firms invest heavily in information systems to
achieve six strategic business objectives: (Cont.)
4. Improved decision making
– Without accurate information:
• Managers must use forecasts, best guesses, luck
• Leads to:
o Overproduction, underproduction of goods and services
o Misallocation of resources سوء تخصيص الموارد
o 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, شكاوى العمالء
network performance, line outages, etc.
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Information Systems in Business Today-
The Role of Information Systems in Business Today (Cont.)
Business firms invest heavily in information systems to
achieve six strategic business objectives: (Cont.)
5. Competitive advantage
– Delivering better performance
– Charging less for superior products
– Responding to customers and suppliers in real-time
• Examples: Apple, Walmart, UPS (United Parcel Service)
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Information Systems in Business Today-
The Role of Information Systems in Business Today (Cont.)
Business firms invest heavily in information systems to
achieve six strategic business objectives: (Cont.)
6. Survival
– Information technologies as the 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
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