Chapter 1
INFORMATION SYSTEMS IN BUSINESS
TODAY
🛒 Story Time: How Information Systems Power Retail
Giants
📍 Walmart: The King of Supply Chain Efficiency
Walmart became a giant not just by selling cheap — but by mastering information systems.
From the very beginning, Walmart invested in one of the world’s most advanced supply chain
management systems. Its Retail Link system connects suppliers directly to its inventory,
automatically updating when items run low.
So when a customer in Texas buys a pack of diapers, the system instantly notifies the supplier,
checks warehouse stock, and schedules the next delivery. This efficiency allows Walmart to
offer low prices and full shelves, even in remote towns.
🔍 IS Focus: Supply Chain Management, Inventory Automation, Vendor Integration
🎯 Target: Smart, Stylish, and Customer-Focused
Target doesn't try to beat Walmart on price — instead, it wins with customer experience.
Target uses data analytics and information systems to personalize promotions, manage its
trendy product lines, and keep stores looking sleek. Its app uses machine learning to
recommend items, while in-store, RFID systems track inventory in real-time, improving
restocking and reducing waste.
Target also blends online and in-store experiences with features like curbside pickup, order
tracking, and digital coupons — all made possible by integrated information systems.
🔍 IS Focus: Customer Analytics, Inventory Tracking, Omnichannel Experience
📦 Amazon: The Digital Disruptor
Amazon changed the game entirely — it is born digital.
Behind Amazon's simple website lies a massive, AI-powered information system that
handles everything: from predictive shipping (guessing what you’ll buy next) to robot-run
warehouses, real-time product recommendations, and cloud-based services (via AWS).
Amazon knows what you want before you do — and it uses this data to optimize logistics,
personalize ads, and deliver faster than anyone else.
🔍 IS Focus: Big Data, AI, Logistics, Cloud Computing
📊 Comparison Summary Table
Company Strength via IS Example Systems
Walmart Supply Chain Efficiency Retail Link, RFID
Target Customer Experience & Branding Guest ID, RFID, Omnichannel IS
Amazon Digital Innovation & Speed AWS, AI Logistics, Predictive Analytics
💬 1. "How do you think Amazon’s information systems contribute to its
global reach and customer satisfaction?"
Amazon’s success is rooted in its powerful information systems, which allow it to operate 24/7
globally with high efficiency:
● Data Analytics: Amazon tracks user behavior and purchase history to offer personalized
recommendations, increasing satisfaction and sales.
● Predictive Algorithms: AI predicts what users will need next, improving logistics and
reducing delivery time.
● Global Cloud Infrastructure (AWS): Amazon Web Services powers its own platforms
and other global businesses, giving it unparalleled scalability.
● Automated Warehouses: Robots and real-time tracking systems ensure fast and
accurate order fulfillment.
✅ Result: Customers get fast, personalized service — no matter where they are in
the world.
💬 2. "How important is it to localize and test information systems when
entering a new market analyzing Target?"
Very important. When Target entered new markets (like Canada), it failed to localize and test
systems properly, which led to inventory problems, empty shelves, and frustrated
customers.
● Localization includes:
○ Currency, tax, and pricing adjustments
○ Language and cultural preferences
○ Supply chain and logistics compatibility
● Testing systems before launch ensures:
○ Inventory accuracy
○ Payment system compatibility
○ Smooth customer experience
❌ Lesson from Target's failure in Canada: Poor system localization can ruin
customer trust and brand image — even for big companies.
💬 3. "How did Walmart use information systems to reduce costs and
improve customer satisfaction?"
Walmart’s Retail Link System revolutionized supply chain management by giving real-time
inventory access to suppliers.
● Just-In-Time Inventory: Reduces excess stock, lowers storage costs.
● Vendor Integration: Suppliers restock products directly, saving time and effort.
● Price Optimization Tools: Use data to set competitive prices.
● Self-Checkout & RFID: Streamline the shopping experience.
✅ Result: Low prices, full shelves, and faster service — all thanks to data-driven
efficiency.
💬 4. "What can Bangladeshi retailers like Meena Bazar or Shwapno learn
from Walmart’s approach to managing inventory?"
Retailers like Meena Bazar or Shwapno can adopt several strategies:
● Introduce Real-Time Inventory Tracking: Use RFID or barcoding to reduce stockouts
or overstocking.
● Collaborate with Suppliers Digitally: Share sales data with suppliers to improve
restocking speed.
● Automate Reordering: Use software to auto-reorder fast-selling items.
● Customer Analytics: Use loyalty cards and apps to track buying habits and optimize
stock.
🌍 Local Impact: Better stock management means fresher products, lower prices,
and higher customer satisfaction — even in local markets.
⚾️ Case Study: The New Yankee Stadium Looks to the
Future
🧩 Problem
● Many Yankees fans preferred watching games on TV or enjoying other
entertainment options.
● Decline in live attendance = loss in ticket, food, and merchandise sales.
💡 Solution
The Yankees used Information Systems (IS) to enhance the in-stadium experience, making
it more engaging than watching from home.
● HDTV Monitors Everywhere: Fans in the stadium can see instant replays, live
statistics, and highlights — just like on TV.
● Mobile Apps: Fans can:
○ Order food and drinks from their seats
○ Watch replays and live stats on their phones
○ Navigate the stadium easily
✅ This creates a tech-enhanced experience that makes the stadium more
attractive than staying home.
🖥️ Role of Cisco Systems
● Cisco provided the networking infrastructure that powers all screens, mobile
connectivity, and data systems.
● This made Yankee Stadium one of the most connected and high-tech stadiums in
baseball.
🌐 Lessons & Takeaways
● IT enables new services: Tech created a more immersive and personalized experience
for fans.
● Mobile + Network Integration: Shows the power of mobile apps and high-speed
networks in modern entertainment.
● Competitive Advantage: Enhanced fan experience = more ticket sales, longer stays,
and higher concession spending.
🎯 Conclusion
The Yankee Stadium case shows how information systems are not just for business
operations — they are vital for creating better customer experiences, staying competitive,
and innovating traditional industries like sports.
🌍 How Information Systems Are Transforming Business
📱 1. Rise of Wireless Technology and Websites
● Most businesses now operate online via websites and mobile apps.
● Wireless networks allow employees and customers to connect anytime, anywhere.
● Example: Online banking, e-commerce, remote working.
✅ Result: Faster service, real-time updates, wider customer reach.
🌐 2. Increased Use of Web 2.0 Technologies
● Web 2.0 includes interactive tools like:
○ Social media (Facebook, Instagram)
○ Blogs, Wikis, Forums
○ User-generated content platforms (YouTube, reviews)
● Businesses use these to:
○ Engage with customers
○ Promote products
○ Collect feedback
✅ Result: Better customer interaction and brand visibility.
☁️ 3. Cloud Computing & Mobile Digital Platforms
● Cloud computing lets companies store and access data over the internet (e.g., Google
Drive, AWS).
● Mobile platforms (smartphones, tablets) allow work from anywhere.
● These tools help:
○ Teams collaborate globally
○ Make decisions remotely
○ Cut IT infrastructure costs
✅ Result: More flexible, fast, and cost-effective business operations.
🌎 4. Globalization Opportunities
● The internet has lowered communication and transaction costs, making global
operations easier than ever.
● Businesses can:
○ Outsource work
○ Sell products worldwide
○ Operate in multiple countries efficiently
🌐 Challenges: Cultural differences, cybersecurity, local laws
🌟 Opportunities: Bigger markets, cheaper labor, global growth
💻 The Emerging Fully Digital Firm
🧩 What is a Digital Firm?
A digital firm is a business where key relationships, operations, and assets are managed
using digital technologies. It relies heavily on information systems for everything from
customer service to decision-making.
🔍 Key Features of a Fully Digital Firm:
1. Digitally Enabled Relationships
○ All major interactions with customers, suppliers, and employees are done through
digital platforms (e.g., email, e-commerce, Zoom).
○ Example: Amazon’s automated system for handling customer orders and supplier
inventory.
2. Digital Business Processes
○ Core tasks like order processing, shipping, payroll, and inventory are managed
via digital networks.
○ Example: Online ordering → warehouse picking → delivery tracking — all digital.
3. Digitally Managed Assets
○ Company resources such as data, intellectual property, customer databases, and
supply chains are stored, tracked, and managed digitally.
○ Example: Google Drive or AWS for storing documents and code.
🔁 Flexibility: Time Shifting and Space Shifting
1. Time Shifting
○ Work can happen anytime — not limited to 9–5.
○ Example: A software team works across different time zones, handing off tasks
24/7.
2. Space Shifting
○ Work can happen anywhere — not limited to the office.
○ Example: Remote teams using Zoom, Slack, or cloud tools to collaborate from
different cities or countries.
✅ Benefits of a Digital Firm:
● Faster decision-making
● Global scalability
● Lower operating costs
● Better customer service
● More agility and innovation
📱 1. What are the advantages and disadvantages of
using mobile handheld devices in business?
✅ Advantages:
● Portability: Easy to carry and use anywhere.
● Real-time communication: Stay connected with teams and clients.
● Access to data: Can access emails, files, dashboards, and apps on the go.
● Productivity apps: Tools like Microsoft Office, Zoom, Slack, and Google Drive boost
mobile work.
● Cost-effective: Cheaper than setting up workstations everywhere.
❌ Disadvantages:
● Security risks: Devices can be lost or hacked.
● Limited screen size: Not suitable for heavy editing or complex tasks.
● Battery dependence: Frequent charging needed.
● Distraction: Easy to get distracted with personal apps or notifications.
● Limited storage and computing power: Can’t handle large or high-performance tasks.
🧠 2. What features are needed in a mobile to make it a
business solution?
To function as a professional business device, a mobile phone should have:
● Fast processor and enough RAM – for smooth multitasking
● Secure login features – biometrics, encryption, VPN support
● Business apps support – Microsoft 365, Zoom, CRM apps, etc.
● Good camera and mic – for video calls and document scanning
● Large storage capacity or cloud sync
● Battery life – long enough for a full workday
● Strong network and Wi-Fi support – including 4G/5G
● Mobile Device Management (MDM) – for IT teams to control data access remotely
🧾 3. What business functions can be performed by using
handhelds alone?
With smartphones or tablets, professionals can:
● Send/receive emails and messages
● Attend virtual meetings (Zoom, Teams, Google Meet)
● Manage calendars and schedules
● Access and edit documents
● Track sales and customer interactions via CRM apps
● Scan barcodes and process payments (e.g., in retail)
● Take orders and update inventory in real time
● Use GPS for logistics or delivery tracking
🏢 4. How have other companies utilized handhelds?
● Amazon: Uses handheld scanners for inventory, picking, and packing in warehouses.
● FedEx & DHL: Delivery staff use handhelds to track packages, get signatures, and
update delivery status live.
● Starbucks: Uses mobile apps and tablets for customer orders, loyalty points, and
payments.
● Salesforce teams: Sales reps use mobile CRM apps to manage customer relationships
while traveling.
● Restaurants: Waiters use tablets to take orders and send them directly to the kitchen.
✅ Operational Excellence
💼 Definition:
Operational excellence means improving the efficiency, productivity, and performance of
business processes to reduce costs and increase profits.
"Doing things better, faster, and cheaper."
⚙️ Role of Information Systems in Operational Excellence:
Information systems help businesses by:
● Automating tasks and reducing manual work
● Speeding up communication and decision-making
● Monitoring performance with real-time data
● Reducing errors, waste, and duplication
🏪 Example: Walmart’s RetailLink System
● RetailLink is Walmart’s supply chain management system.
● It connects stores directly to suppliers using real-time sales and inventory data.
● Suppliers can see exactly what’s selling, where, and when — and restock quickly.
● This keeps shelves full without overstocking, saving storage costs.
✅ Result: Lower costs, fewer stockouts, happy customers, and higher profits.
📊 Impact of Operational Excellence:
● Competitive advantage
● Faster service delivery
● Lower prices for customers
● Higher profit margins for the company
🚀 New Products, Services, and Business Models
🧩 What is a Business Model?
● A business model explains how a company creates value and makes money.
● It includes how the company produces, delivers, and sells its products or services.
💡 Role of Information Systems
● Information systems and technology are key enablers of:
○ Developing new products/services
○ Creating innovative ways to deliver and sell them
○ Transforming traditional businesses into digital ones
📱 Examples
Company Product/Service Business Model & IS Role
Apple iPod, iTunes, Created devices + digital store (iTunes) integrated with
iPhone, iPad hardware and software to sell music, apps, and media.
Google Android OS Open-source mobile operating system that powers millions
of devices, enabling app developers and phone makers
worldwide.
Netflix Streaming Service Shifted from DVD rentals to online streaming using cloud
technology and personalized recommendation algorithms.
🔑 Key Takeaway
Information systems enable companies to innovate and transform the way they create value
— from products and services to entire business models.
🤝 Customer and Supplier Intimacy
👥 Customer Intimacy
● Serving customers well builds loyalty, encouraging them to return and buy more.
● Companies use information systems to track customer preferences, purchase history,
and feedback.
● This data helps customize services to individual customers.
Example:
High-end hotels use computers to track guests’ preferences—like room
temperature, favorite meals, or pillow types—and tailor the stay accordingly,
enhancing satisfaction and loyalty.
📦 Supplier Intimacy
● Close relationships with suppliers help ensure timely, high-quality inputs.
● Sharing sales data and forecasts with suppliers allows them to plan better, reducing
costs and delays.
Example:
J.C. Penney’s information system links its sales records directly to contract
manufacturers, allowing suppliers to adjust production based on real-time
demand, improving efficiency and lowering inventory costs.
💡 Summary
● Strong customer and supplier relationships driven by information systems lead to higher
revenues, lower costs, and better overall business performance.
📈 Improved Decision Making
🔍 Why Accurate Information Matters
● Without good information, managers rely on:
○ Guesses
○ Forecasts
○ Luck
This often leads to problems like:
● Producing too much or too little (overproduction or underproduction)
● Using resources inefficiently
● Slow or wrong responses to issues
❌ Consequences of Poor Decisions
● Increased costs due to waste or missed opportunities
● Losing customers because of delays or stock shortages
● Damaged reputation and competitive disadvantage
✅ How Information Systems Help
● Provide real-time, accurate data to managers.
● Help detect problems early and respond quickly.
● Support data-driven decision-making rather than guesswork.
📊 Example: Verizon’s Digital Dashboard
● Verizon uses a web-based dashboard that shows:
○ Customer complaints
○ Network performance
○ Service outages
● Managers get instant alerts and detailed info.
● This enables quick fixes, better customer service, and lower downtime.
💡 Summary
Accurate, timely information helps managers make better decisions, improving efficiency,
customer satisfaction, and profits.
🏆 Competitive Advantage
🔑 What is Competitive Advantage?
It means a company performs better than its competitors by:
● Offering higher quality products or services
● Charging lower prices without sacrificing quality
● Responding faster to customers and suppliers
⚡ How Information Systems Help Achieve This
● Streamline operations to improve performance
● Use data analytics for pricing strategies and customer insights
● Enable real-time communication and quick response
📌 Examples
Company Competitive Edge Through Information Systems
Apple Innovative products integrated with digital ecosystems (iPhone + App Store)
Walmart Advanced supply chain systems (RetailLink) to keep costs low and shelves
stocked
UPS Real-time package tracking and route optimization for faster delivery
💡 Summary
Using information systems effectively gives companies an edge to outperform rivals, keep
customers happy, and increase profits.
🛡️ Survival
🧩 What It Means:
Sometimes businesses must use information systems not just to grow—but to survive in the
market.
⚠️ Why?
1. Industry Changes
○ When a competitor introduces new technology, others must follow to stay
competitive.
🏦
○ Example:
Citibank introduced ATMs — other banks had to adopt ATMs to avoid
losing customers.
2. Government Regulations
○ Many laws require accurate digital record-keeping and data security.
○ Companies must use information systems to comply with legal standards.
📜 Examples of Laws Requiring Information Systems:
Law/Act Purpose
Toxic Substances Control Act Requires firms to track chemicals used in
(TSCA) manufacturing.
Sarbanes-Oxley Act (SOX) Demands accurate financial reporting and data
protection.
💡 Summary
Information systems are no longer optional—they are essential for legal compliance, adapting
to industry changes, and staying in business.
🔁 Feedback in Information Systems
💬 Definition:
Feedback is when output (results) is sent back to the right people in the organization to help
them evaluate or adjust the input or process.
🔄 It helps in improving accuracy, efficiency, and decision-making.
✅ Example:
A company’s sales dashboard shows a drop in product sales.
That feedback goes to the marketing team, who then adjust advertising or change the
pricing strategy.
💻 Computer vs. Information System
🖥️ Computer / Program:
● Just the hardware (machine) or software (app/tool)
● Like a hammer or bricks — tools by themselves
🧠 Information System:
● A complete system involving:
○ People (users, IT staff)
○ Technology (hardware & software)
○ Processes (data collection, analysis, reporting)
● Like building a house: tools (computer), materials (data), workers (users), and design
(process)
📌 A computer is just a part of an information system, not the whole system.
🧱 Analogy Summary:
Element Analogy to House Construction
Computer/Software Tools like hammer, saw
Information System Full house-building system: tools, workers, plans, materials
🏢 Organizational Dimension of Information Systems
Information systems don’t just involve technology—they’re also shaped by how an organization
is structured, how it works, and how people interact within it.
🧩 1. Separation of Business Functions
Organizations are divided into different departments, each with its own role. Information
systems support each function uniquely:
Business Function Role Supported by IS
Sales and Marketing Identify customers, promote products, manage sales
data
Human Resources Recruit, train, evaluate, and manage employees
Finance and Accounting Manage budgets, payroll, billing, and financial reporting
Manufacturing and Production Monitor production, inventory, and supply chain
🔁 2. Unique Business Processes
● Every company has its own set of workflows, such as how it:
○ Handles customer orders
○ Processes returns
○ Manages hiring
● Information systems are often customized to fit these unique processes.
🧠 3. Unique Business Culture
● The values, beliefs, and behaviors within an organization shape how information
systems are used.
● Example:
○ A company that values speed and innovation may invest heavily in automation
and mobile tools.
○ Another that prioritizes security may focus more on control systems.
🏛️ 4. Organizational Politics
● Different departments or leaders may have conflicting interests.
● Example:
○ The finance department wants tight budgets, while marketing wants more ad
spending.
● These internal dynamics can affect how information systems are designed and
implemented.
🧠 Summary
The organizational dimension focuses on the people and structure inside a business — and
information systems must be designed to fit into and support this environment.
👔 Management Dimension of Information Systems
🧠 What It Means:
This dimension focuses on the role of managers in using and shaping information systems to
help the organization succeed.
🔑 Key Responsibilities of Managers:
1. Setting Strategy
○ Managers decide how the business will respond to challenges such as
competition, changing technology, or customer demands.
○ They use information systems to plan and make decisions.
2. Acting Creatively
Managers don’t just manage existing operations—they must also innovate:
○ Create new products and services
■ Example: Apple using data and technology to design the iPhone.
○ Re-create or transform the organization
■ Example: Netflix shifting from DVD rentals to online streaming using
digital platforms.
🎯 How Information Systems Help Managers
● Provide real-time data for decision-making
● Help with forecasting, planning, and setting goals
● Support collaboration across departments and countries
● Allow managers to monitor performance, customer trends, and market shifts
💡 Summary
The management dimension of information systems focuses on how leaders use technology
to strategize, innovate, and guide the organization toward success.
💻 Technology Dimension of Information Systems
⚙️ What It Means:
This dimension includes all the technical components that make an information system work.
It forms the foundation for processing, storing, and sharing information.
🧩 Key Components:
1. Computer Hardware & Software
○ Hardware: Physical devices like computers, servers, mobile devices, etc.
○ Software: Programs and applications used to process data (e.g., Excel,
databases, ERP systems).
2. Data Management Technology
○ Tools to store, organize, and access data efficiently.
○ Includes databases and data warehouses.
3. Networking & Telecommunications
○ Enables data sharing between devices and people.
○ Includes:
■ Networks (LAN, WAN)
■ The Internet
■ Intranets (private internal networks)
■ Extranets (shared with business partners)
■ World Wide Web
4. IT Infrastructure
○ The entire technology platform that the system runs on.
○ Includes hardware, software, networking, and data centers.
🧱 Think of it like the foundation of a building — all business systems are built
on this infrastructure.
💡 Summary
The technology dimension provides the tools and platform that support the processing,
storage, and communication of information in an organization.
📦 UPS’s Package Tracking System: Inputs, Processing,
Outputs
📝 Inputs:
● Package information (sender, recipient, weight, destination)
● Scanned barcode data from labels
● Customer signatures
● Location/time updates from handheld devices (DIADs – Delivery Information Acquisition
Devices)
⚙️ Processing:
● Data is transmitted to central databases
● The system updates package status in real time
● Routing software finds the most efficient delivery routes
● Systems track truck movements, fuel usage, delivery times
📤 Outputs:
● Real-time tracking info on UPS website or mobile app
● Notifications to customers
● Delivery status reports for managers
● Optimized delivery routes for drivers
💡 Technologies Used by UPS
● Handheld DIADs (Delivery Information Acquisition Devices): Scans packages,
collects signatures, tracks GPS location
● Barcode Scanning Systems: For package ID and routing
● Wireless Communication: To transmit data in real-time
● Central Databases: Store and manage all tracking, route, and customer data
● Web and Mobile Platforms: For customer interaction and package tracking
● Routing Algorithms & AI: Optimize delivery times and reduce fuel costs
● Cloud and Network Infrastructure: For 24/7 availability and scalability
🎯 Relation to UPS's Business Strategy
● Goal: Fast, reliable, cost-effective global delivery
● Technologies help:
○ Minimize delivery time and cost
○ Provide real-time visibility and control
○ Enhance customer satisfaction
○ Reduce operational inefficiencies
● UPS uses IT as a competitive advantage — not just to deliver packages, but to
optimize logistics and supply chain.
🛠️ Problems Solved by UPS’s Information Systems
● Inefficient routing → solved with GPS & AI
● Manual tracking & delays → solved with real-time scanning and updates
● Customer complaints → reduced by providing self-service tracking
● High operational costs → reduced by route optimization and automation
🚨 What If These Systems Didn’t Exist?
● Slower, less reliable deliveries
● Higher labor and fuel costs
● Poor customer satisfaction (no tracking)
● Loss of competitive edge to companies like FedEx, DHL
● More errors and lost packages
