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Chapter 1

Information Systems in Global Business Today

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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: How are information systems transforming business, and what is their relationship to globalization? Why are information systems so essential for running and managing a business today? What exactly is an information system? What are its management, organization, and technology components?
Continued
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Management Information Systems


Chapter 1 Information Systems in Global Business Today LEARNING OBJECTIVES (continued)

What are complementary assets? Why are complementary assets essential for ensuring that information systems provide genuine value for an organization? What academic disciplines are used to study information systems? How does each contribute to an understanding of information systems? What is a sociotechnical systems perspective?

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Management Information Systems


Chapter 1 Information Systems in Global Business Today
Smart Systems and Smart Ways of Working Help Toyota Become Number One

Problem: Tough competition and demanding customers. Solutions: Redesigned order and production processes reduce costs, increase revenue, and improve customer service.

Oracle E-Business Suite makes it possible to build cars to order and forecast demand and production requirements more accurately.
Demonstrates ITs role in analyzing market trends and monitoring quality, efficiency, and costs. Illustrates the emerging digital firm landscape where businesses can use tools to analyze critical data.
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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 wireless technology use, Web sites Shifts in media and advertising New federal security and accounting laws What is new in Management Information Systems
see Table 1-1

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Management Information Systems


Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

Globalization challenges and opportunities

A flattened world
Internet has drastically reduced costs of operating on global scale The emerging digital firm

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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


Operational excellence New products, services, and business models Customer and supplier intimacy Improved decision making

Competitive advantage
Survival

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Management Information Systems


Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

The interdependence between organizations and information technology

There is a growing interdependence between a firms information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do.

Figure 1-2
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Management Information Systems


Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

Operational excellence:
Improvement of efficiency to attain higher profitability Information systems, technology an important tool in achieving greater efficiency and productivity Wal-Marts RetailLink system links suppliers to stores for superior replenishment system

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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: Apples iPod, iTunes, and iPhone

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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
Example: High-end hotels that use computers to track customer preferences and use to monitor and customize environment

Intimacy with suppliers allows them to provide vital inputs, which lowers costs

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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 Leads to:
Overproduction, underproduction of goods and services Misallocation of resources Poor response times

Poor outcomes raise costs, lose customers Digital Dashboards

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Figure 1-3
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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 Example: Toyota and TPS (Toyota Production System) enjoy a considerable advantage over competitors information systems are critical to the implementation of TPS
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Management Information Systems


Chapter 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

Survival
Information technologies as necessity of business May be:
Industry-level changes, e.g. Citibanks introduction of ATMs Governmental regulations requiring record-keeping
Example: Canadian Rules on the Sarbanes-Oxley Act

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Management Information Systems


Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

Virtual Meetings: Smart Management


Read the Window on Management and then discuss the following:

One consulting firm has predicted that video and Web conferencing will make business travel extinct. Do you agree? Why or why not?
What is the distinction between videoconferencing and telepresence? What are the ways in which videoconferencing provides value to a business? Would you consider it smart management? Explain your answer.

If you were in charge of a small business, would you choose to implement videoconferencing? What factors would you consider in your decision?
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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

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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

Data and 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.

Figure 1-4
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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
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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

Functions of an information system

Figure 1-5
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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

Organizational dimension of information systems


Hierarchy of authority, responsibility
Senior management Middle management Operational management Knowledge workers Data workers Production or service workers

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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

Figure 1-7
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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

Organizational dimension of information systems (cont.)


Separation of business functions
Sales and marketing Human resources Finance and accounting Manufacturing and production

Unique business processes Unique business culture Organizational politics

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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

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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

Information technology dimension of information systems


Computer hardware and software

Data management technology


Networking and telecommunications technology IT infrastructure: provides platform on which the system is built

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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

UPS Competes Globally with Information Technology Read the Window on Technology, and then discuss the following questions:
What are the inputs, processing, and outputs of UPSs package tracking system? What technologies are used by UPS? How are these technologies related to UPSs business strategy?

What problems do UPSs information systems solve? What would happen if these systems were not available?
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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
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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

Figure 1-8
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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

Complementary assets:
Assets required to derive value from a primary investment Firms supporting technology investments with investment in complementary assets receive superior returns E.g.: invest in technology and the people to make it work properly
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Management Information Systems


Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

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Management Information Systems


Chapter 1 Information Systems in Global Business Today Contemporary Approaches to Information Systems

Technical approach

Behavioral approach
Approach of this text: Sociotechnical systems

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Management Information Systems


Chapter 1 Information Systems in Global Business Today Contemporary Approaches to Information Systems

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Management Information Systems


Chapter 1 Information Systems in Global Business Today Contemporary Approaches to Information Systems

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2011 Pearson Canada Inc.

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Chapter 1

Information Systems in Global Business Today

2011 Pearson Canada Inc.

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