Introduction to Information Technology

Introduction: Business and Information Technology CHAPTER-1


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In this chapter, we will study:  Marketplace pressures faced by today·s businesses and various tactical and strategic responses.  The distinction between data, information, and knowledge.  The characteristics of high quality information.  The components of an information system.  The capabilities organizations expect of information systems.  Opportunities to use information systems strategically.


Today·s Business Environment  Characterized by: Rapid Change Complexity Global Economy Hyper-competition Customer Focus  Businesses face pressure to produce more with fewer resources 1-3 .

 In some cases.  Business responses to pressures may involve use of Information Technology and Information Systems.  Knowledge of IT capabilities is essential to today·s businesspeople. 1-4 .Organizational Responses  Pressures provoke proactive and reactive organizational responses. IT is the only solution to business pressures.

Business Pressures. legal. Three Types of business pressures that organizations face. Organizational Responses. physical. The business environment is the combination of social. and political factors that affect business activities. Chapter 1 16 1-5 . and societal pressures . economic. and IT Support Business Pressure . Significant changes in any of these factor are likely to create business pressure on organization .

Societal Pressure:  Social responsibility  Government regulation and Deregulation  Spending for social programs  Protection Against Terrorist Attacks.The Three Types of Business Pressure Market Pressure:  The global economy and strong competition  The changing nature of the workforce  Powerful customers.  Ethical Issues Chapter 1 18 1-6 . Technology Pressures:  Technological Innovation and Obsolescence  Information Overload.

Pressures on Organizations  Global competition for trade and labor  Need for real-time operations  Changing workforce  Customer Orientation  Technological innovation and obsolescence  Information Overload Chapter 1 18 1-7 .

The Sabre reservation system (developed by American Airlines). prevent competitors from entering their markets.Organizational Responses  Organizations respond to business pressures of competition in one of the five categories: 1. better negotiation with suppliers.supported strategic systems. increase market share. Trend to move from mass production( produce large quantity of identical items) to mass customization(produce large quantity of items to suit customer desires). Chapter 1 18 1-8 . Federal Express( developed by package training systems) Customer Focus and more attention to customers and their preferences. Examples of IT. meeting objectives. Strategic Systems-organizations seek to have systems that pave to success. 2.

Continuous improvement improve productivity and quality by increasing output. quick delivery to customers.It helps in it allowing automation. rapid paperless transactions with suppliers etc. Empowering employees and fostering collaborative work-giving authority to employees to react and take decisions on their own. IT allows decentralization of decision making but yet centralized control. reducing costs using techniques as justin-time(JIT) inventory.Organizational Responses 3. Total Quality Management(TQM) Business Process Reengineering-to change management dimensions . 5. 4. Chapter 1 18 1-9 .

Business Pressures and Organizational Responses 1-10 .

IT support for organizational responses Chapter 1 17 1-11 .

Why Should You Learn About IT?  What can be done with IT and the consequences of using IT are very interesting.  Career opportunities are abundant in IT. 1-12 . and business processes are often changed with IT. management.  Organizational structure.  IT affects every business functional area.

1-13 .  Knowledge: information organized to convey understanding. collected. or expertise.Some Key Definitions  Data: raw facts. experiences. not organized. accumulated learning.  Information: data organized in a meaningful way.

analyzes. Data Instructions Collect Inputs Process And Transform Produce Outputs Calculations Reports Store 1-14 . processes. and disseminates information. stores.What is an Information System?  A system that collects.

What Makes Information Useful?  It is accurate  Free of errors  It is relevant  Applies to the issue under study  It is complete  Includes everything needed  It is timely  Available when needed  It is flexible  Can be viewed in various ways  It is verifiable  Basis for results can be traced  It is reliable  Results are always consistent  It is accessible  All those who need the information can get to it  It is secure  Free from contamination (accidental or deliberate) 1-15 .

Employs some combination of hardware. procedures. and people. software.  An information system developed to provide a solution to a business problem. 1-16 . database.What is Meant by a ´Computer-Based Information Systemµ?  An information system using computer and telecommunications technology to perform its intended tasks. network.

Facilitate work in hazardous environment .Major Capabilities of Information System  Perform high-speed. numerical computation.  Provide fast. accurate. Facilitate the interpretation of vast amounts of data Enable communication and collaboration anywhere. Allow quick and inexpensive access to vast amount of information. and inexpensive communication within and        between organizations. Chapter 1 7 1-17 . anywhere. Increase the effectiveness and efficiency of people working in groups in one place or in several locations. Store huge amounts of information in an easy-to-access. worldwide. Automate both semiautomatic business processes and manual tasks. high-volume. any time. yet small space.

analysis.Organizations Have High Expectations of Their Information Systems  Fast. accurate processing of business transactions.  Storage. retrieval. and data sharing to  Increase communication  Reduce overload  Span organizational boundaries  Support and improve decision making. 1-18 .  Distinctive capabilities providing competitive advantage.

Key Technical Trends to Monitor  Constantly improving        cost-performance ratio Increasing storage and memory User friendly interfaces Client/server architecture Network computers Enterprisewide computers Intranets and extranets Data warehousing  Data mining  Object-oriented        environment Electronic document management Multimedia Intelligent systems Portable computing Internet expansion Electronic commerce Integrated home computing 1-19 .

Using IT Strategically  Businesses today must understand how IT can shape and refine business strategy  Porter·s Strategic Analysis Model ‡ Helps in understanding strategic forces affecting organizations in particular industries ‡ IT can be applied to strengthen and support a specific business strategy  Value Chain ‡ Helps in identifying ways IT can improve the quality and efficiency of organizational processes 1-20 .

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