02.

Information Systems In
The Modern Organization
Learning Outcomes
By the end of this lesson, you will be able to:
• Describe the major types of Business Information
Systems and their characteristics
• Summarize the typical business organization’s
competitive environment
• Relate information technology, information systems
and their alignment with the business organizations’
strategic goals
 Types Business Information Systems:
Alternative Classification Schemes
• Batch vs Online systems
• Classification by Application Area: Organizational Systems, Interorganizational
Systems, Extraorganizational Systems etc.
• Classification by Application:
• Enterprise systems: Transaction Processing Systems, ERP Systems, Data Warehousing
systems, Customer Relationship Management Systems, Office Automation Systems
etc.
• Managerial Support Systems: Decision Support Systems, Data Mining Systems,
Executive Support Systems, Business Intelligence Systems, Knowledge Management
Systems, Expert Systems etc.
• Functional Systems: Production Systems, Marketing Systems, Accounting
Systems, Personnel and Human Resource Systems etc.,
• Integrated vs Distributed systems
 Types of Business Information Systems –
Resources

Reading
1 Types of Business Information Systems https://paginas.fe.up.pt/~acbrito/laudon/ch2/chpt2-1main.htm

Video
1 Types of Business Information Systems https://youtu.be/GKKMNSNlJtk
Types of Business Information Systems
Types of Business Information Systems
Type of Information Inputs Processing Information Users
System Outputs
ESS Aggregate data, external, Graphics Projections; Senior
internal simulations; responses to Managers
interactive queries
DSS Low volume data or Interactive; Special reports; Professionals;
massive databases Simulations; decision analyses; Staff
optimized for data analysis responses to managers
analysis, analytic models queries
and data analysis tools
MIS Summary transaction Routine Reports; Summary and Middle
data; high-volume data; Simple Models; exception reports Managers
simple models Low-level analysis
TPS Transactions, events Sorting; listing; Detailed reports; Operations
merging; updating lists; summaries Personnel
 Relevant Additional Videos

1 Business Information Systems https://youtu.be/GKKMNSNlJtk

2 Transaction Processing Systems https://youtu.be/KDigYmS9cqg

3 Management Information Systems https://youtu.be/Qgrxu4RLKKA

4 Decision Support Systems https://youtu.be/DKJkFicHJUQ

5 GSS and ESS https://youtu.be/uW-EJoL_6SU

6 Other Systems https://youtu.be/hAspyrf6wIA

 The Competitive Environment – IT Doesn’t Matter
• As IT is an infrastructure technology, (just like railways, electricity, telephone
etc.) it can only guarantee a strategic advantage for an individual firm if the
firm created something proprietary (that competitors cannot easily copy) at
the beginning of its life cycle
• As IT is now commoditized (i.e. available to anyone and arguably quite
affordable), it is unlikely to yield any sustainable competitive advantage to
any single firm. First-mover advantages cannot last when everyone has
access to the same technologies at affordable prices.
• Although IT is necessary for competitiveness, it’s not sufficient. Competitive
advantage comes from a firm’s business model, not its use of IT.
• IT has become part of the business infrastructure; therefore, its management
needs to change. Success hinges on defense, not offense.
 The Competitive Environment – IT Doesn’t Matter
Management of IT should become “boring” and focus on three areas:

• Manage the risks. Focus on vulnerabilities rather than opportunities.

• Keep costs down. The greatest risk is overspending, so only pay for use
and limit upgrading

• Stay behind the technology leaders, but not too far behind, letting the
leaders bear the high cost of experimentation. Delay investments until
there are standards and best practices and prices drop. Only innovate
when risks are low.
The Competitive Environment – IT Doesn’t Matter
The Competitive Environment – Michael Porter
Five competitive forces:
• Rivalry among existing competitors
• Threat of new entrants
• Threat of substitute products
• Bargaining Power of Suppliers
• Bargaining Power of Buyers
The Competitive Environment – Michael Porter
Three strategies for dealing with these competitive
forces:
• Differentiate products and services.
• Be the lowest-cost producer.
• Find a niche
The Competitive Environment – Michael Porter
 The Competitive Environment - Resources

Reading
https://opentextbook.site/informationsystems2019/chapter/
1 Does IT Matter? chapter-7-does-it-matter-information-systems-introduction/

Video
1 The Five Competitive Forces That Shape Strategy https://www.youtube.com/watch?v=mYF2_FBCvXw

2 The ‘IT Doesn't Matter’ Debate https://youtu.be/Lh1IZNmQDUY

 IT/IS - Business Alignment

• A popular debate in the IS Management arena is IT Alignment (also

known as Business-IT Alignment)
• Problem: How can we attain a correspondence between the
organization’s business mission and objectives to the IT architecture
and infrastructure?
• For alignment to occur, many firms have had the IS strategy derived
directly from the business strategy. Misalignment between IT
initiatives and business goals could result in extreme consequences
such as business failure.
IT/IS - Business Alignment - Resources

Reading
Text 4 page 495 to 498
1 IS and Business Strategy integration

Videos
1 How IT and Business Process Fit Together https://youtu.be/3iAp9me4P1c

2 IT Strategy https://www.youtube.com/watch?v=vzB1HVt6_sk

3 How to Align your IT Strategy with your Business Goals https://www.youtube.com/watch?v=yoh-jXBfOEU