Information Systems in Business Today: CASE: UPS Global Operations With The DIAD IV
Information Systems in Business Today: CASE: UPS Global Operations With The DIAD IV
Information Systems in Business Today: CASE: UPS Global Operations With The DIAD IV
• Problem: Long lines limit how many rides, shops, and restaurants a
customer can visit during a stay.
• Solutions: Enhance customer satisfaction and spending by using
information systems to spot gridlock and improve crowd flow.
• Operational Command Center uses video cameras, digital maps,
computer programs, and mobile apps to monitor attendance,
registers, and spot and prevent gridlock
• Demonstrates IT’s role in increasing value and revenue in any
business.
• Illustrates the potential for technology to improve customer
experience.
The Role of Information Systems in Business Today
FIGURE 1-1 Information technology capital investment, defined as hardware, software, and communications equipment,
grew from 32 percent to 52 percent of all invested capital between 1980 and 2009.
RUNNING THE BUSINESS FROM THE PALM OF YOUR HAND
Figure 1.2 In contemporary 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.
The Role of Information Systems in Business Today
• Operational excellence:
• Improvement of efficiency to attain higher
profitability
• Information systems, technology an important
tool in achieving greater efficiency and
productivity
• Walmart’s Retail Link system links suppliers to
stores for superior replenishment system
The Role of Information Systems in Business Today
• Competitive advantage
• Delivering better performance
• Charging less for superior products
• Responding to customers and suppliers in
real time
• Examples: Apple, Walmart, UPS
The Role of Information Systems in Business Today
• Survival
• Information technologies as necessity of business
• Industry-level changes
• Example: Citibank’s introduction of ATMs
• Governmental regulations requiring record-
keeping
• Examples: Toxic Substances Control Act,
Sarbanes-Oxley Act
Perspectives on Information Systems
• Information system:
• Set of interrelated components
• Collect, process, store, and distribute information
• Support decision making, coordination, and
control
• Information vs. data
• Data are streams of raw facts.
• Information is data shaped into meaningful form.
Data and Information
Figure 1.3 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.
Perspectives on Information Systems
• Feedback:
• Output is returned to appropriate members of
organization to help evaluate or correct input stage.
• Computer/Computer program vs.
information system
• Computers and software are technical foundation and
tools, similar to the material and tools used to build a
house.
Functions of an Information System
An information system
contains information about an
organization and its
surrounding environment.
Three basic activities—input,
processing, and output—
produce the information
organizations need. Feedback
is output returned to
appropriate people or activities
in the organization to evaluate
and refine the input.
Environmental actors, such as
customers, suppliers,
competitors, stockholders, and
regulatory agencies, interact
with the organization and its
information systems.
Figure 1.4
Information Systems Are More Than Computers
Figure 1.5
Perspectives on Information Systems
Figure 1.6
Perspectives on Information Systems
Figure 1-7 From a business perspective, information systems are part of a series of value-adding activities for acquiring,
transforming, and distributing information that managers can use to improve decision making, enhance
organizational performance, and, ultimately, increase firm profitability.
Perspectives on Information Systems
Although, on average,
investments in information
technology produce returns far
above those returned by other
investments, there is
considerable variation across
firms.
Figure 1.8
Perspectives on Information Systems
• Complementary assets:
• Assets required to derive value from a primary
investment
• Firms supporting technology investments with
investment in complementary assets receive
superior returns
• Example: Invest in technology and the people to
make it work properly
Perspectives on Information Systems
Figure 1.9
Contemporary Approaches to Information Systems
• Technical approach
• Emphasizes mathematically based models
• Computer science, management science, operations
research
• Behavioral approach
• Behavioral issues (strategic business integration,
implementation, etc.)
• Psychology, economics, sociology
Contemporary Approaches to Information Systems
Figure 1-10 In a sociotechnical perspective, the performance of a system is optimized when both the technology and the
organization mutually adjust to each other until a satisfactory fit is obtained.