1

MANAGING THE DIGITAL MANAGING THE DIGITAL FIRM:FIRM:

CANADA AND BEYONDCANADA AND BEYOND

CHAPTER 1

2

Why Information Systems?

• Organizations need IS to survive and prosper

• New challenges in the Competitive environment– Emergence of the global economy– Transformation of industrial economies– Transformation of the enterprise– Emergence of the digital firm

3

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.

4

DATA vs. INFORMATION

• Raw facts

• Represent events

• E.g. sales from a cash register

• Organized data

• Meaningful to people

• E.g. sales trends, comparison of brands

5

Four activities in an IS

1. INPUT 2.PROCESSING 3.OUTPUT

4. FEEDBACK

6

A Business Perspective on IS

Info

Systems

ORGANIZATIONS TECHNOLOGY

MANAGEMENT

7

Literacy Components

• Computer Literacy– Knowledge of technical dimensions (IT)

• Information Systems Literacy– Broad understanding of computer-based IS– Encompasses management & organizational

dimensions– Includes technical dimensions (IT)

8

Approaches to IS

• Technical Approach– Emphasizes mathematically based models to

study IS

• Behavioural Approach

9

Two Approaches to IS

SOCIOLOGYSOCIOLOGY

ECONOMICSECONOMICSPSYCHOLOGYPSYCHOLOGY

COMPUTER COMPUTER

SCIENCESCIENCEOPERATIONS OPERATIONS

RESEARCHRESEARCH

MANAGEMENTMANAGEMENT

SCIENCESCIENCE

TECHNICAL APPROACHESTECHNICAL APPROACHES

MISMIS

BEHAVIOURAL APPROACHESBEHAVIOURAL APPROACHES

10

The Preferred Approach to IS

IS performance is optimized when both the organization and the technology adjust to each other, until a good fit is obtained

The Sociotechnical Approach:

11

The Impact of the Internet

Communicate & Collaborate

Access Information

Participate in Discussions

Supply Information

Find Entertainment

Exchange Business

Transactions

12

Digital Organizational Design

• Flattening organizations

• Separating work from location

• Reorganizing workflows

• Increasing organizational flexibility

• Changing management process

• Redefining organizational boundaries

13

Internet-based technologies

• Intranet– An internal network based on Internet

technologies

• Extranet– Private intranet that is accessible to

authorized outsiders

14

The Emerging Digital Firm

• Electronic market– A marketplace that is created by computer &

communications technologies, linking buyers and sellers

• E-commerce– buying & selling goods and services electronically

• E-business– Organizational communication, coordination &

management using Internet technologies

15

The Emerging Digital Firm

16

Key Management Issues

• Strategic Challenge: – How can business use IT to become

competitive, effective and digitally enabled?

• Globalization Challenge• Information Architecture & Infrastructure

Challenge• IS Investment Challenge• Responsibility & Control Challenge

17

Positive Impacts of IS

• Perform calculations & process paperwork faster than people

• Help companies learn about their customer’s preferences & purchases

• Provide new efficiencies (e.g. ATMs)• Provide advances in medicine• Internet allows distribution of information widely

and quickly

18

Negative Impacts of IS

• May replace people & eliminate jobs

• System outages can cause critical shutdowns

• Heavy users may experience health problems

• Internet can be used to distribute illegal copies of software and violate intellectual property regulations

19

Case: SK Wheat Pool

• What were the reasons SK Lab had to change its business processes?

• Why Lotus?

• What mgnt, org, and tech issues did the lab have to address?

• What measures could you use for evaluation of success? Was it successful?

• Is SK Lab a digital organization?

20

c h a p t e r

11MANAGING THE DIGITAL MANAGING THE DIGITAL

FIRM:FIRM:

CANADA AND BEYONDCANADA AND BEYOND