management information systems ch 1 laudon

1-1© 2011 Pearson Canada Inc.

ChapterChapter 11

Information Systems in Information Systems in Global Business TodayGlobal Business TodayInformation Systems in Information Systems in Global Business TodayGlobal Business Today


LEARNING OBJECTIVES

Management Information SystemsManagement Information SystemsChapter 1 Information Systems in Global Business TodayChapter 1 Information Systems in Global Business Today

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 …


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?


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 IT’s 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.



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




• Globalization challenges and opportunities

• A “flattened” world

• Internet has drastically reduced costs of operating on global scale

• The emerging digital firm




• Strategic business objectives of information systems• Operational excellence

• New products, services, and business models

• Customer and supplier intimacy

• Improved decision making

• Competitive advantage

• Survival





The interdependence between organizations and The interdependence between organizations and information technologyinformation technology

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.

Figure 1-2


• Operational excellence:– Improvement of efficiency to attain higher profitability– Information systems, technology an important tool in

achieving greater efficiency and productivity– Wal-Mart’s RetailLink system links suppliers to stores

for superior replenishment system




• 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: Apple’s iPod, iTunes, and iPhone




• 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




• 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




Figure 1-3


• 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




• Survival– Information technologies as necessity of

business– May be:

• Industry-level changes, e.g. Citibank’s introduction of ATMs

• Governmental regulations requiring record-keeping– Example: Canadian Rules on the Sarbanes-Oxley Act




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?

Virtual Meetings: Smart ManagementVirtual Meetings: Smart Management




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

Perspectives on Information Systems





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

Data and InformationData and Information


• 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






Functions of an information systemFunctions of an information system

Figure 1-5


• Organizational dimension of information systems– Hierarchy of authority, responsibility

• Senior management• Middle management• Operational management• Knowledge workers• Data workers• Production or service workers






Figure 1-7


• 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




• 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




• 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




• Read the Window on Technology, and then discuss the following questions:

• What are the inputs, processing, and outputs of UPS’s package tracking system?

• What technologies are used by UPS? How are these technologies related to UPS’s business strategy?

• What problems do UPS’s information systems solve? What would happen if these systems were not available?

UPS Competes Globally with Information Technology




• 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






Figure 1-8


• 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






Figure 1-9


• Technical approach

• Behavioral approach

• Approach of this text: Sociotechnical systems

Contemporary Approaches to Information Systems





Figure 1-11


ChapterChapter 11

Information Systems in Information Systems in Global Business TodayGlobal Business TodayInformation Systems in Information Systems in Global Business TodayGlobal Business Today

management information systems ch 1 laudon

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