5364 mis 1 is in global business
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1. Information Systems in Global1. Information Systems in Global
Business TodayBusiness Today
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LEARNING OBJECTIVES
Explain why information systems are so
essential in business today.
Define an information system from both a
technical and a business perspective.
Identify and describe the three dimensions of
information systems.
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Assess the complementary assets required
for information technology to provide value
to a business.
Identify and describe contemporary
approaches to the study of information
systems and distinguish between computerliteracy and information systems literacy.
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Smart Systems and Smart Ways of Working
Help Toyota Become Number One
Problem: Tough competition and demandingcustomers.
Solutions: Redesigned order and production
processes reduce costs, increase revenue, andimprove customer service.
Oracle E-Business Suite makes it possible to buildcars to order and forecast demand and productionrequirements more accurately.
Demonstrates ITs role in analyzing market trendsand monitoring quality, efficiency, and costs.
Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data.
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1. The Role of Information Systems in1. The Role of Information Systems in
Business TodayBusiness Today
How information systems are transformingbusiness
Technology, to a large extent, has driven
organizations to change the way they operate andthat includes the way they manage.
Information systems are the foundation for
conducting business today. In many industries,
survival and even existence is difficult withoutextensive use of information technology. No longercan we imagine going to work and conducting
business without them.5
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Globalization opportunities
Many of our new jobs are in the information
industry.
Many of them service whole new markets thatdidnt exist just a few years ago.
The emerging digital firm A digital firm is one in which nearly all of the
organizations significant business relationships withcustomers, suppliers, and employees are digitally
enabled, and key corporate assets are managedthrough digital means.
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Digital firms characteristics
Significant business relationships with customers,suppliers, and employees are digitally enabled and
mediated.
Core business processes are accomplished through
digital networks and span the entire organization or
link multiple organizations.
Key corporate assets intellectual property, core
competencies, and financial and human assets
are managed through digital means.
Internal and external environments are quickly
recognized and dealt with. 7
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And the number one reason digital firms
experience greater opportunities for success
and profits is because they view information
technology as the core of the business and
the primary management tool.
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Strategic business objectives of informationsystems
Growing interdependence between a firms abilityto use information technology and its ability toimplement corporate strategies and achievecorporate goals.
Specifically, business firms invest heavily ininformation to achieve six strategic businessobjectives:
Operational excellence
New products, services, and business models
Customer and supplier intimacy
Improved decision making
Competitive advantage
Survival9
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Operational Excellence
Businesses continuously seek to improve the
efficiency of their operations in order to achieve
higher profitability.
Information systems and technologies are some of
the most important tools available to managers for
achieving higher levels of efficiency and
productivity in business operations, especially when
coupled with changes in business practices andmanagement behavior.
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Information Technology CapitalInformation Technology Capital
InvestmentInvestment
Information technology investment, defined as hardware, software, and communications
equipment, grew from 34% to 50% between 1980 and 2004.
Source: Based on data in U.S. Department ofCommerce, Bureau ofEconomic Analysis, National Incomeand Product Accounts, 2006.
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Virtual Management at AccentureVirtual Management at Accenture
Accenture is a global consulting services and
outsourcing firm with over 129,000 employees servingclients in 48 different countries. It has no operationalheadquarters and no formal branches, encouraging its
employees to move from location to location to work
on projects at client sites. Accenture is a networkedorganization in which groups of professionals cometogether face to face or electronically for short
periods of time to accomplish a specific task; once the
task is accomplished, the individuals join other taskforces. Managers use e-mail, phones, the Web, andother information technologies to manage virtually,
often while they are traveling themselves.
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Virtual Management at AccentureVirtual Management at Accenture
Interactive Session: Organizations
What are the advantages of working in a virtual
environment like the one created by Accenture?
What are the disadvantages?
Would you like to work at a company like
Accenture? Why or why not?
What kinds of companies could benefit from
being run virtually like Accenture? Could all
companies be run virtually like Accenture?
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New Products, Services, and Business Models
Information systems and technologies are a major
enabling tool for firms to create new products and
services, as well as entirely new business models.
A business model describes how a company
produces, delivers, and sells a product or service tocreate wealth.
As successful as Apple Inc, NetFlix, and Wal-Mart
were in their traditional brick-and-mortar existence,they have all introduced new products, services,
and business models that have made them both
competitive and profitable.14
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Customer and Supplier Intimacy
When a business really knows its customers, and
serves them well, the way they want to be served,the customers generally respond by returning andpurchasing more.
This raises revenues and profits.
Likewise with suppliers: the more a businessengages its suppliers, the better the suppliers can
provide vital inputs.
This lower costs. Wal-Mart uses RealLink system to link their
suppliers to everyone of Wal-Marts 5,289 storesworldwide.
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Improved Decision Making
Availability of real-time data from the marketplace
when making decisions.
Previously, managers did not have access to
accurate and current data and as such relied on
forecasts, best guesses, and luck. The inability to make informed decision resulted in
raising costs and lost customers.
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Competitive Advantage
Doing things better than your competitors, charging
less for superior products, and responding to
customers and suppliers in real time all add up to
higher sales and higher profits that your
competitors cannot match. Dell Computers and Wal-Mart used information
systems and technologies to separate themselves
from their competition.
Dell remains the most efficient producer of PCs in
the world. Wal-Mart is the most efficient retail store
in the industry.17
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Survival
Firms also invest in information systems and
technologies because they are necessities of doingbusiness.
Information systems is not a luxury. In most
businesses, information systems and technology isthe core to survival.
Citibank was the first to introduce ATMs.
Had a major competitive advantage over theircompetitors.
Others had no choice but to provide ATM services
to banking customers.18
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The Interdependence Between OrganizationsThe Interdependence Between Organizations
and Information Technologyand 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 wouldlike to do depends on what its systems will permit it to do.19
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2. Perspectives on Information Systems2. Perspectives on Information Systems
What is an information system?
Input, processing, output, and feedback
processes MIS/IS = IT + Processes + People +
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Data and InformationData 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.21
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Dimensions of information systems
Difference between possessing information
systems literacy and simple computer
literacy.
If you, as a manager, can combine information
from internal sources and external
environments, if you can be part of the
solution and not part of the problem, you can
consider yourself information literate.
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Management information systems (MIS)
deals with behavioral issues as well as
technical issues surrounding the development,
use, and impact of information systems used
by managers and employees in the firm.
As such, MIS is defined as the study ofinformation systems focusing on their use in
business and management.
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Information Systems Are More Than ComputersInformation 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.24
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Organizations
The key elements of an organization are its: People
Structure
Business processes Politics
Culture
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Management
Managers role is to develop the game plan byanalyzing their teams strengths and weaknesses.
They also determine the competitions strengths
and weaknesses.
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Technology
As the products and services on the Internetexpand everyday, your need for new
networking and telecommunications
technology links just seems to grow and grow.
It isnt just a technology: A Businessperspective on information systems
Complementary assets: Organizationalcapital and the right business model
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UPS Competes Globally with Information
Technology
The Interactive Session on Technology describessome of the typical technologies used in computer-
based information systems today.
United Parcel Services (UPS) invests heavily ininformation systems technology to make its
business more efficient and customer oriented.
It uses an array of information technologies.
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UPS Competes Globally with Information
Technology
What are the inputs, processing, and outputs ofUPSs package tracking system?
What technologies are used by UPS? How are
these technologies related to UPSs businessstrategy?
What problems do UPSs information systems
solve? What would happen if these systemswere not available?
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3. Contemporary Approaches to Information
Systems
The study of information systems deals withissues and insights contributed from technical
and behavioral disciplines.
The disciplines that contribute to the technicalapproach are computer science, management
science, and operations research.
The disciplines contributing to the behavioral
approach are psychology, sociology, and
economics.
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Technical approach pure engineeringpure engineering
approachapproach
Behavioral approach takes into account thetakes into account the
very nature of human beings. Nothing isvery nature of human beings. Nothing is
totally black and whitetotally black and white
Neither approach is better than the other,
depending on the situation.
Neither approach is more right than the other,depending on the situation.
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Approach of this text: Socio-technical systems
An organization cant afford to view its information
resources as belonging to either the techies
(technical approach) or the non-techies (behavioral
approach).
Responsibility for information belongs to everyonein the organization. This is the socio-technical
approach a combination of the two approaches.
Everyone has to work together to ensure thatinformation systems serve the entire organization.
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