Q1- What is the difference between information technology and information systems?

Describe some of the functions of information systems. (Ch1)

Answer: Information technology (IT) consists of all the hardware and software that a firm
needs to use to achieve its business objectives. Information systems are more complex. An
information system can be defined technically as a set of interrelated components that collect
(or retrieve), process, store, and distribute information to support decision making and control
in an organization.

An information system:
• supports decision making, coordination, and control
• helps employees analyze problems
• helps employees visualize complex subjects
• helps create new products

Q2- There are 6 strategic business objectives of information systems. Explain them in
detail. (Ch1)

Answer: Student answers will vary. The following is an example of a possible answer:
Accenture's information systems allow its mobile workforce to be within easy, constant reach
of its customers, contributing to the business objective of customer and supplier intimacy.
Additionally, the ability of employees to connect to and work with local branch information
systems in standard ways, regardless of their location, contributes to more efficient processes
and operational excellence.

Q3- Describe the relationship between TPS, MIS, DSS and ESS. (Ch2)

Answer: The types of information systems used for different levels of management are
transaction processing systems (TPS), management information systems (MIS), decision-
support systems (DSS), and executive support systems (ESS). TPS, such as payroll or order
processing, track the flow of the daily routine transactions that are necessary to conduct
business. They are used by operational managers to manage day-to-day operations. MIS
summarize and report on the company's basic operations using data supplied by TPS. They
provide middle managers with reports on the organization's current performance and are not
highly analytical. DSS also support middle management decisions when these decisions are
unique, rapidly changing, and not specified easily in advance. They use advanced analytical
models and data analysis capabilities and often draw on information from external as well as
internal sources. ESS support senior management by providing data of greatest importance to
senior management decision makers. ESS provide a generalized computing and
communications capacity that can be applied to a changing array of problems. ESS present
graphs and data from many sources through an interface that is easy for senior managers to
use, often a portal.
Q4- You are advising the owner of Smalltown Computer, a new, local computer repair
store that also builds custom computers to order. What competitive strategies (Four
generic strategies for dealing with competitive forces, enabled by using IT) could
Smalltown Computer exert? Which ones will it have difficulty exercising? (Ch3)

Answer: Low-cost leadership: Smalltown Computer may have difficulty competing against
the warranty services or computer sales of major national computer manufacturers, be able to
exercise low-cost leadership in comparison to any other local computer

Product differentiation: Although many national computer manufacturers sell customized

computers to the individual, Smalltown computer may be able to differentiate their product by
adding more services to their product.

Focus on market niche: Smalltown computer could determine a market niche geared to their
advantage in being a local store with in-store technology support and assistance.

Customer and supplier intimacy: Smalltown computer has an advantage in customer intimacy,
in that it can develop relationships

Q5- What are the impact of the Internet on competitive forces? (Ch3)

Answer: Because of the Internet, traditional competitive forces are still at work, but
competitive rivalry has become much more intense. Internet technology is based on universal
standards that any company can use, making it easier for rivals to compete on price alone and
for new competitors to enter the market. Because information is available to everyone, the
Internet raises the bargaining power of customers, who can quickly find the lowest-cost
provider on the Web. The printed encyclopedia industry and the travel agency industry have
been nearly decimated by the availability of substitutes over the Internet.