Chapter 1

Information
Systems in
Global
Business
Today
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

LEARNING OBJECTIVES

After reading this chapter, you will be able to answer

the following questions:

1.How are information systems transforming business,

and what is their relationship to globalization?
2.Why are information systems so essential for running
and managing a business today?
3. What exactly is an information
system? How does it work? What are
its management, organization, and
technology components?
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

LEARNING OBJECTIVES (continued)

4. What are complementary assets? Why are

complementary assets essential for ensuring that
information systems provide genuine value for an
organization?
5. What academic disciplines are used to study
information systems? How does each contribute to
an understanding of information systems? What is
the sociotechnical systems perspective?
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

How information systems are transforming

business
Increase in use of wireless technologies
More company websites, more online shopping
Growing business use of big data
Growth in cloud computing
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

How information systems are transforming

business (continued)
Supply chain optimization and just-in-time
inventories
Shifts in media; more news delivered online
E-commerce and Internet advertising expand
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

What is new in MIS

Technology Management Organiza3ons

Big Data Online collabora3on Social Business

Cloud compu3ng pla=orm Business intelligent Telework
applica3ons

Mobile Digital pla=orm Virtual mee3ngs Co-crea3on of business
value
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

The emerging digital firm

Nearly all of the organizations significant business
relationships with customers, suppliers and
employees are digitally enabled and mediated

Core business processes are

accomplished through
digital networks that span
and link organizations
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

Strategic business objectives of information

systems
What makes information systems so essential today?
Operational excellence
New products, services, and business models
Customer and supplier intimacy
Improved decision making
Competitive advantage
Survival
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

Operational excellence:
Improve efficiency of operations to attain higher
profitability
Information systems and technologies are
important tools for achieving greater efficiency
and productivity

Walmarts Retail Link

system connects
suppliers to stores for
superior replenishment
system
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business 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, and Uber
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

Customer and supplier intimacy:

Serving customers well leads to customers
returning, which raises revenues and profits
- High-end hotels use computers to track customer
preferences and use these data to monitor and
customize room environment
- https://www.youtube.com/watch?v=ib2rSrB7Oag
- Canadian clothing manufacturer Nygard used
computers to inform suppliers of its needs;
inventory costs are near zero.
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

Improved decision making

Without accurate information, managers
must use forecasts, best guesses, luck
This leads to:
Overproduction,
underproduction of goods
and services
Misallocation of resources
Poor response times
Poor outcomes raise costs,
lose customers
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

Competitive advantage
Delivering better performance
Charging less for superior products
Responding to customers and suppliers in
real time
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Information Technology
Often used as a synonym for information systems

Typically refers to the technical components of

information systems

All the hardware and software that a firm needs to

use in order to achieve its business objectives.
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

What is an information system?

A set of interrelated components that collect (or
retrieve), process, store, and distribute
information to support decision making and
control in an organization
Consider both technology and a business
perspective
https://www.youtube.com/watch?v=Qujsd4vkqFI
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Information system: Four activities produce

information that organizations need:
Input: Captures raw data from organization or
external environment
Processing: Converts raw data into meaningful
form
Output: Transfers processed information to
people or activities that use it
Feedback: output that allows evaluation and
correction
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Function of an Information System

Suppliers Competitors
Customers

Regulatory
Bodies

Shareholders

Organization
Environment
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Dimensions of Information Systems

Information Systems are more than Computers

 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Organizations
Information Systems are an integral part of
organizations
Key elements of organizations include
People
Structure
Business processes
Politics
Culture
Continued
 Management Information Systems 22
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Levels in a Firm

Senior
Management

Middle Management
Scientists & Knowledge
Workers

Operational Management
Production & Service Workers, Data
Workers
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Major Business Functions

Func3on Purpose
Sales and Marke3ng Selling the organiza.on's product and
services
Manufacturing and Produc3on Producing and delivering product and
services
Finance and Accoun3ng Managing the organiza.ons nancial assets
and maintaining the organiza.ons nancial
records
Human Resources A<rac.ng, developing and maintaining the
organiza.ons labor force; maintaining
employee report
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Management dimension of information

systems
Managers set organizational strategy for
responding to business challenges
In addition, managers must act creatively:
- Creation of new products and services
- Occasionally re-creating the organization
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Information technology dimension of

information systems
Physical equipment used for input, process & output
Computer Hardware activities
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Information technology dimension of

information systems
Physical equipment used for input, process & output
Computer Hardware activities

Detailed, pre-programmed instructions that control and

Computer Software coordinate the computer hardware
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Information technology dimension of

information systems
Physical equipment used for input, process & output
Computer Hardware activities

Detailed, pre-programmed instructions that control and

Computer Software coordinate the computer hardware

Software governing the organization of data

Data Management
Technology
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Information technology dimension of

information systems
Physical equipment used for input, process & output
Computer Hardware activities

Detailed, pre-programmed instructions that control and

Computer Software coordinate the computer hardware

Software governing the organization of data

Data Management
Technology

Networking & Links the various pieces of hardware and transfer data from
telecommunications one physical location to another
technology
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Information technology dimension of

information systems
Physical equipment used for input, process & output
Computer Hardware activities

Detailed, pre-programmed instructions that control and

Computer Software coordinate the computer hardware

Software governing the organization of data

Data Management
Technology

Networking & Links the various pieces of hardware and transfer data from
telecommunications one physical location to another
technology

IT infrastructure Provides platform on which the system is built

 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

It is not just technology: a business

perspective on information systems:

Information system is instrument for creating

value
Investments in information technology will
result in superior returns:
Productivity increases
Revenue increases
Superior long-term strategic positioning
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

The Business Information Value Chain
 Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems

Complementary assets: organizational capital

and the right business model
Why some companies can achieve much better
results using information systems while others
cannot?

Supportive Values

Structures

Behavioral Patterns
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Variation in returns on information technology investment
 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

 Management Information Systems
Chapter 1 Information Systems in Global Business Today

Contemporary Approaches to Information Systems