N2MBA06

Managing Information Technology,

Systems and Business

Dr. S Panneerselvam
Professor
Department of MBA
Siddaganga Institute of Technology
B. H. Road, Tumakuru
 Evaluation Criteria

S. No. Criteria Number

1 Quizzes 4
2 Internal Tests 2
3 Semester End Exam 1
4 Assignments 3

Attendance
Mini-Project
 MANAGEMENT INFORMATION SYSTEMS

Subject Code N2MBA06 CIE Marks 50

Credits (Lecture 03 SEE Marks 100
Hours/week)
Total no. of 39 Exam 03 Hours
Lecture Hours Duration
 MANAGEMENT INFORMATION SYSTEMS
Course Objectives

1.  To educate the students on the need for information

systems in business.
2.  To envisage and acquiesce with the emerging
information technologies/systems and effect on
businesses.
3.  To appraise the pervasiveness of enterprise applications.
4.  To explore the new avenues of e-business and its impact
on organisations.
5.  To enrich the students’ thinking in the context of
emerging big data and data analytics.
6.  To educate the students on the need for information
systems in business.
Course Outcomes
Upon completion of this course the student will be able to

CO1 Examine the need for information systems in

organisations and their role in decision making.
CO2 Evaluate the growth of information infrastructure
and its effect.
CO3 Maximise the benefits of enterprise applications
in the organisational ecosystem.
Distinguish business models of ecommerce
CO4 based on business transactions and
technologies.
CO5 Develop aptitude in business intelligence and its
influences on businesses.
UNIT 1 (8 Hours)

Role of information management in Business:

Information Systems and transformation of
business – Recent Developments – globalization
challenges and opportunities: A flattened world –
The Emerging Digital firm – Strategic business
objectives of Information Systems – Information
system and its dimensions.
UNIT 2 (8 Hours)
IT Infrastructure: Definition – evolution – technology
drivers – Infrastructure components – hardware
platform trends – software platform trends – the
Internet – wireless revolution.

UNIT 3 (7 Hours)
Enterprise Applications: Enterprise Systems –
Supply Chain Management Systems – Customer
Relationship Management Systems – Opportunities
and Challenges of enterprise applications.
Managing Knowledge: Dimensions of knowledge –
KM value chain – enterprise wide KM systems –
knowledge work systems.
UNIT 4 (8 Hours)
E-Commerce: Introduction – key concepts and
features – types – business models – revenue models
– e-commerce marketing – B2B – m-commerce
services and applications.
 
UNIT 5 (8 Hours)
Business Intelligence: Problems with traditional file
management systems – Capabilities of data base
management systems (DBMS) and Relational DBMS –
Capabilities of DBMS – Designing databases.
The Challenges of big data – Business Intelligence
Infrastructure – Analytical Tools: Relationships,
Patterns and Trends – Databases and the Web –
Establishing an Information Policy.
 How ISs are transforming business?

 In 2019, global spending on information technology (IT)

and IT services was nearly $3.8 trillion (Gartner, 2019).

 Firms spend another $160 billion on management

consulting and services – Redesigning firms’ business
operations to take advantage of these new technologies
(Statista, 2020).

 Most of the business value of IT investment derives from

these organisational, management and cultural changes
inside firms.
 How ISs are transforming business?

Information Technology

 In developing and emerging countries, phones and tablets

are the primary means of access to the Internet.
 An estimated 2.34 billion people now use social networks,
with Facebook accounting for 1.5 billion alone.
 Messaging services like WhatsApp, Facebook Messenger
and Twitter collectively have over 2 billion monthly users.
 WhatsApp has over 400 million users in India, among its
biggest markets globally (The Hindu, 17th January 2021).
 How ISs are transforming business?
Information Technology
 Number of smartphone users worldwide is forecasted to
exceed 3.8 billion in 2021 and India it is estimated to
reach over 760 million in 2021 (statista.com).
 Mobile devices generated about 50.81% of global website
traffic (satista.com, 2020).
 More than 1 billion people use tablet computers, about 15
percent of global population.
 Smartphones, social networking, texting, e-mailing, and
webinars have all become essential tools of business
because that’s where customers, suppliers, and
colleagues can be found.
 How ISs are transforming business (Contd.)
 FedEx moved about 11.5 million packages daily in 220
countries and territories around the world mostly
overnight.
 United Parcel Service (UPS) moved more than 18 million
packages daily.

 Businesses are using information technology to sense

and respond to rapidly changing customer demand,
reduce inventories to the lowest possible levels, and
achieve higher levels of operational efficiency.
 Supply chains have become more fast-paced, with
companies of all sizes depending on just-in-time inventory
to reduce their overhead costs and get to market faster.
 How ISs are transforming business (Contd.)
 Online newspapers are read by one billion people (2.5
billion read a print newspaper), growing at 10% annually,
far faster than print newspapers.
 An estimated 1.7 billion people watch videos and feature
films online.
 About 100 million post to a blog everyday, and 250 million
read a blog, creating an explosion of new writers and new
forms of customer feedback that did not exist five years
ago.
 Social networking site Facebook attracted more than 1.7
billion monthly visitor worldwide.
 Nearly all of the Fortune 2000 global firms now have
Facebook pages, and Twitter accounts.
 New in Management Information Systems

MIS field is the most exciting area of study in schools of

business because of continuous change in technology,
management, and business processes.

Five changes are of paramount importance

1. IT Innovations
2. New Business Models
3. E-commerce Expanding
4. Management Changes
5. Changes in Firms and Organisations
 New in Management Information Systems

1. IT Innovations

Continuous stream of IT innovations is transforming the

traditional business world
 Emergence of cloud computing
 The growth of mobile digital business platform based on
smartphones and tablet computers
 Big data and the Internet of Things (IoT), business
analytics and machine learning systems
 Use of social networks by managers to achieve business
objectives.
IT Innovations

The changes have occurred in the past few years enabling

entrepreneurs to
 Create new products and services
 Develop new business models
 Transform the day-to-day conduct of business.

Result: Some old businesses, even industries are being

destroyed while new businesses are springing up.
2. New Business Models

 Emergence of online video stores like Netflix for

streaming or downloading. E.g. Netflix, Apple TV
Channels and Amazon
 Changed how premium video is distributed and even
created.
 Netflix has attracted more than 167 million subscribers
worldwide (2020) – Internet TV revolution.
 Netflix started producing TV shows – House of Cards and
Orange is the New Black.
 Challenging cable and broadcast producers of TV shows
Result: A growing trickle of viewers are unplugging from
cable and using only the Internet for entertainment.
3. E-commerce Expansion

 E-commerce sales worldwide amounted to nearly $4.9

trillions in 2021 (Statista, 2022)
 Changing how firms design, produce, and deliver their
products and services.
 Disrupting the traditional marketing and advertising
industry.
 Facebook, YouTube, Twitter along with Netflix, Apple
Music exemplify the new face of e-commerce in the
twenty-first century.
 Growth in social commerce is spurred by powerful growth
of the mobile platforms
 About 98% of Facebook’s users access the service from
mobile phones and tablets.
3. E-commerce Expansion

 Mobile retail e-commerce approached $300 billion in

2020 (and is growing more than 20 percent a year)
(Meola, 2019)
E-commerce sales worldwide (US $billions)

Source: statista, 2022

4. Management Changes
 With mobile smartphones, high-speed wireless, Wi-Fi
networks, and tablets, remote sales people are only
seconds away from their manager’s questions and
oversight.
 Business is going mobile.
 Managers on the move are in direct, continuous contact
with their employees.
 Managers no longer operate in a fog of confusion but
instead have online, nearly instant access to the
important information.
 This help them in taking accurate and timely decisions.
 Wikis and blogs are becoming important corporate tools
for communication, collaboration, and information
sharing.
5. Changes in Firms and Organisations
 Less emphasis on hierarchy and structure; more emphasis
on employees taking on multiple roles and tasks and
collaborating with others on a team.
 Greater emphasise on competency and skills rather than
position in the hierarchy.
 Emphasise higher-speed and more-accurate decision
making based on data and analysis.
 More aware of changes in technology, consumer attitudes,
and culture.
 Use social media to enter into conversation with consumers.
 Demonstrate a greater willingness to listen to consumers
 Show better understanding of the importance of information
technology in creating and managing business firms and
other organisations.
Global challenges and opportunities: A flattened world
 In 2019, an estimated 30 percent of the world economy
resulted from foreign trade of goods and services, both
imports and exports.
 Half of Fortune 500 US firms obtain nearly 50% of their
revenue from foreign operations.
 For instance, more than 50 percent of Intel’s revenues in
2019 came from overseas sales of its microprocessors.
 Tech companies are particularly dependent on offshore
revenue:
 About 85% of Intel’s revenues in 2015 came from
overseas sales of its microprocessors.
 Apple earned 60% of its revenue outside of the United
States.
 Eighty percent of the toys sold in the United States are
manufactured in China.
What does globalisation have to do with MIS?
 The emergence of the Internet into a full-blown
international communications system has drastically
reduced the costs of operating and transacting on a global
scale.
 Communication between a factory floor in Shanghai and a
distribution centre in Rapid City, South Dakota, or
Antwerp, Belgium, is now instant and virtually free.
 Customers can now shop in a worldwide marketplace,
obtaining price and quality information reliably 24 hours a
day.
 Firms producing goods and services on a global scale
achieve extraordinary cost reductions by finding low-cost
suppliers and managing production facilities in other
countries.
 Internet service firms, such as Google, Netflix, Alibaba
and Amazon are able to replicate their business models
and services in multiple countries without having to
redesign their expensive fixed-cost information systems
infrastructure.
 The Emerging Digital Firm

A digital firm is one in which nearly all of the organisation’s

significant business relationships with customers, suppliers
and employees are digitally enabled and mediated.
 Core business processes are accomplished through
digital networks spanning the entire organisation or linking
multiple organisations.

Business processes refer to the set of logically related tasks

and behaviours that organisations develop over time to
produce specific business results and the unique manner in
which these activities are organised and coordinated.
E.g. Developing a new product, generating and fulfilling an
order, creating a marketing plan etc.
They can be a source of strength.
 The Emerging Digital Firm (Contd.)
 Key Corporate Assets – Intellectual property, core
competencies, and financial and human assets – are managed
through digital means.
 In a digital firm, any piece of information required to support
key business decisions is available at any time and anywhere
in the firm.
 They sense and respond to their environments far more rapidly
than traditional firms, giving them more flexibility to survive in
turbulent times.
 The firms offer extraordinary opportunities for more flexible
global organisation and management.
 Time shifting (business being conducted 24x7) and space
shifting (business being conducted globally or beyond
traditional geographic boundaries) are the norms in the
organisations.
E.g. Cisco Systems, 3M and GE.
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.
 Attributes of Information Quality

Time Dimension
Timeliness Information should be provided when
it is needed
Currency Information should be up-to-date
when it is provided
Frequency Information should be provided as
often as needed
Time Period Information should be provided about
past, present, and future time periods
 Attributes of Information Quality
Content Dimension
Accuracy Information should be free from errors
Relevance Information should be related to the
information needs of a specific recipient for
a specific situation
Completeness All the information that is needed should be
provided
Conciseness Only the information that is needed should
be provided
Scope Information can have broader or narrow
scope, or an internal or external focus
Performance Information can reveal performance by
measuring activities accomplished, progress
made, or resources accumulated.
 Attributes of Information Quality

Form
Clarity Information should be provided in a form
that is easy to understand
Detail Information can be in detail or summary
form
Order Information can be arranged in a
predetermined sequence
Presentation Information can be presented in narrative,
numeric, graphic, or other forms
Media Information can be provided in the form of
printed paper, documents, video displays,
or other media
A system is…
A set of interrelated components
 With a clearly defined boundary
Working together
To achieve a common set of objectives
By accepting inputs and producing outputs
In an organized transformation process
An information system is…
An organized combination of…
People
Hardware and software
Communication networks
Data resources
Policies and procedures
This system…
 Stores, retrieves, transforms, and disseminates
information in an organization
 Components of an Information System
 

Data: Input that the system takes to produce information

Hardware: A computer and its peripheral equipment: input, output, and
storage devices. Hardware also includes data communication equipment
Software: Set of instructions that tell the computer how to take data in, how to
process it, how to display information, and how to store data and information
Telecommunications: Hardware and software that facilitate fast transmission
and reception of text, pictures, sound and animation in the form of electronic
data
People: Information systems professionals and users who analyse
organisational information needs, design and construct information systems,
write computer programs, operate the hardware, and maintain software.
Procedures: Rules for achieving optimal and secure operations in data
processing. Procedures include priorities in dispensing software applications
and security measures.
 Perspectives on Information Systems
 Information Technology (IT) consists of all the hardware
and software that a firm needs to use in order to achieve
its business objectives.
 Includes hardware such as computers, disk drives, and
handheld devices and software such as Windows or
Linux, Microsoft office and other programs.
 An information system is a set of interrelated components
that collect or retrieve, process, store, and distribute
information to support decision making and control in an
organization.
 Information systems can also be used to analyze
problems, visualize complex subjects, and create new
products.
 Information is data, or raw facts, shaped into useful form
for humans.
 Perspectives on Information Systems
Input, processing, and output are the three activities in
an information system that produce the information an
organization needs.
Input captures or collects raw data from within the
organization or from its external environment.

Processing converts this raw input into a meaningful form.

Output transfers the processed information to the people

who will use it or to the activities for which it will be used.

Information systems also require feedback, which is

output that is returned to appropriate members of the
organization to help them evaluate or correct the input
stage.
Functions of an Information System
 Functions of an Information System (Diagram)

An information system contains information about an

organization and its surrounding environment. Three basic
activities—input, processing, and output—produce the
information that organizations need.

Feedback is output returned to appropriate people or

activities in the organization to evaluate and refine the
input.

Environmental factors, such as customers, suppliers,

competitors, stockholders, and regulatory agencies,
interact with the organization and its information systems.
It is important to distinguish information systems, which are
designed to produce information and solve organizational
problems, from the computer technology and software that
is typically used to create and manage information systems.

Computer literacy focuses primarily on knowledge of

information technology.

Information systems literacy refers to the understanding of

information systems that includes a behavioral and
technical approach to understanding the broader
organization, management, and information technology
dimension of systems and their power to provide solutions.

The field of management information systems (MIS) tries to

achieve this broader information systems literacy.
 Information Systems are more than Computers
Using information systems effectively requires an
understanding of the organization, management, and
information technology shaping the systems. An
information system creates value for the firm as an
organizational and management solution to challenges
posed by the environment.
 Dimensions of Information Systems
 Include organizations, management, and information
technology.
Organisation

 The key elements of an organization are its people,

structure, business processes, politics, and culture.
 An organization coordinates work through a structured
hierarchy and formal standard operating procedures.
 Managerial, professional, and technical employees form
the upper levels of the organization's hierarchy while lower
levels consist of operational personnel.
 Levels in a Firm

Business organizations are hierarchies consisting of three

principal levels: senior management, middle management,
and operational management. Information systems serve
each of these levels. Scientists and knowledge workers often
work with middle management.
 Senior management makes long-range strategic
decisions and ensures the firm's financial performance.
 Middle management carries out the plans of senior
management and operational management monitors
the firm's daily activities.
 Knowledge workers such as engineers and scientists
design products and create and distribute new
knowledge for the organization.
 Data workers such as secretaries process the
organization's paperwork.
 Production or service workers produce the products or
services.
 Experts are employed for the major business functions:
the specialized tasks performed by organizations, which
consist of sales and marketing, manufacturing and
production, finance and accounting, and human
resources.

 An organization coordinates work through its hierarchy

and business processes. These processes may be
documented and formal, or informal, unwritten work
processes, such as how to handle a telephone call.
 Each organization has a unique culture, or fundamental
set of assumptions, values, and ways of doing things, that
are accepted by most of its members.
 Parts of an organization's culture can be found in its
information systems. For example, UPS's organizational
focus on customer service can be found in the package
tracking system available to customers.
 Information systems may also reflect the organizational
politics or conflicts that result from differing views and
opinions in an organization.
 Information systems are also a key component in the
ability of management to make sense of the challenges
facing a company and in management's ability to create
new products and services, manage the company, and
even re-create the organization from time to time.
Information technology is one of the many tools used by
management to cope with change. A firm's information
technology (IT) infrastructure is a technology platform or
foundation on which a firm can build its information systems.
IT infrastructure consists of:

 Computer hardware: The physical equipment and

computing devices used for input, storage, processing,
output, and telecommunications.
 Computer software: The detailed, preprogrammed
instructions that control and coordinate the computer
hardware components.
 Data management software: The software governing the
organization of data on physical storage media.
 Networking and telecommunications technology:
Hardware and software used to link the various pieces of
hardware and transfer data from one physical location to
another; a computer network links two or more computers
together to share data, such as files, images, sounds,
video, or share resources, such as a printer.
 The Internet is the world's largest and most widely used
network. The Internet is a global network that uses
universal technology standards to connect many private
and public networks. The universal standards and
technologies used in the Internet are also used in systems
and networks within the firm.
 Intranets are internal corporate networks based on Internet
technology, and extranets are corporate networks
extended to authorized users outside of the firm.
The World Wide Web is a service provided by the Internet
that uses universally accepted standards for storing,
retrieving, formatting, and displaying information in a page
format on the Internet.
Web pages contain text, graphics, animations, sound, and
video and are linked to other Web pages.
The Web can serve as the foundation for new kinds of
information systems such as UPS's Web-based package
tracking system.
The Interdependence between organisations
and information Systems
There is a growing interdependence between a firm’s
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.
Business firms invest heavily in information systems to
achieve six strategic business objectives:

Operational excellence: Efficiency, productivity, and

improved changes in business practices and management
behavior.
Wal-Mart–RetailLink System – Linking Suppliers to the
Stores (more than $600 per sq. ft., Target–$425 per sq. ft.).

New products, services, and business models: A

business model describes how a company produces,
delivers, and sells a product or service to create wealth.
Information systems and technologies create opportunities
for products, services, and new ways to engage in business.
E.g. iPod, the iTunes music Service, and the iPhone
Customer and supplier intimacy: Improved
communication with and service to customers raises
revenues, and improved communication with suppliers
lowers costs (The Mandarin Oriental hotel group).

Improved decision making: Information systems and

technologies have made it possible for managers to use
real-time data from the marketplace when making decisions.
They used to operate in an information fog bank (Privi
Organics Ltd. – Oracle Human Capital Management System
for real-time insights)

Competitive advantage: Implementing effective and

efficient information systems can allow a company to charge
less for superior products, adding up to higher sales and
profits than their competitors (Toyota).
Survival: Information systems can also be a necessity of
doing business. A necessity may be driven by industry-level
changes, as in the implementation of ATMs in the retail
banking industry. A necessity may also be driven by
governmental regulations, such as central or state statutes
requiring a business to retain data and report specific
information.
 Business Information Value Chain
From a business perspective, an information system is an
important instrument for creating value for the firm.
 Information systems enable the firm to increase its
revenue or decrease its costs by providing information that
helps managers make better decisions or that improves the
execution of business processes.
Every business has an information value chain in which raw
data is systematically acquired and then transformed
through various stages that add value to that information.
 The value of an information system to a business, as well
as the decision to invest in any new information system is
determined by the extent to which the system will lead to
better management decisions, more efficient business
processes, and higher firm profitability.