Information Systems in Business Today

Information Systems in
Business Today
The Role of Information Systems in

Business Today
How information systems are transforming business

Increase in wireless technology use, Web sites
Increased business use of Web 2.0 technologies
Cloud computing, mobile digital platform allow more distributed
work, decision-making, and collaboration
Globalization opportunities
Internet has drastically reduced costs of operating on global
scale
Presents both challenges and opportunities

Business Today
Growing interdependence between ability to use information

technology and ability to implement corporate strategies and
achieve corporate goals
Business firms invest heavily in information systems to achieve

six strategic business objectives:
Operational excellence
New products, services, and business models
Customer and supplier intimacy
Improved decision making
Competitive advantage
Survival

Business Today
The Interdependence Between Organizations and Information Technology
Figure 1.2 In
contemporary systems 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 would like to do depends on what its
systems will permit it to do.
Perspectives on Information Systems

Functions of an
Information System
An information system contains
information
about
an
organization
and
its
surrounding
environment.
Three basic activitiesinput,
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.

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.

The Business Information Value Chain
From a business perspective, information systems are part of a series of valueadding activities for acquiring, transforming, and distributing information that
managers can use to improve decision making, enhance organizational performance,
and, ultimately, increase firm profitability.
Contemporary Approaches to Information

Systems
Approach : Sociotechnical view

Optimal
organizational
performance
achieved
by
jointly
optimizing both social and technical systems used in production

Helps avoid purely technological approach
Contemporary Approaches to Information

Systems
A Sociotechnical Perspective on Information Systems
In a sociotechnical perspective, the performance of a system is optimized when both

the technology and the organization mutually adjust to one another until a satisfactory
fit is obtained.
Using Information Systems to Achieve

Competitive Advantage
Why do some firms become leaders in their industry?
Michael Porters competitive forces model

Provides general view of firm, its competitors, and environment
Five competitive forces shape fate of firm
Traditional competitors
New market entrants
Substitute products and services
Customers
Suppliers
10
Prentice Hall 2011

Porters Competitive Forces Model
Figure 3-10 In Porters competitive forces model, the strategic position of the firm and its
strategies are determined not only by competition with its traditional direct
competitors but also by four other forces in the industrys environment: new
market entrants, substitute products, customers, and suppliers.

Generic strategies for dealing with competitive forces, enabled by

using IT
Low-cost leadership
Product differentiation
Focus on market niche

Low-cost leadership
Produce
products
and
services
at
lower
price
than
competitors while enhancing quality and level of service

Examples: Wal-Mart
Product differentiation
Enable new products or services, greatly change customer
convenience and experience
Examples: Google, Nike, Apple

Focus on market niche

Use information systems to enable a focused strategy on a
single market niche; specialize
Example: Hilton Hotels

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Information Systems in

The Role of Information Systems in

How information systems are transforming business

The Role of Information Systems in

Growing interdependence between ability to use information

Business firms invest heavily in information systems to achieve

The Role of Information Systems in

contemporary systems there is a growing interdependence between a firms

Perspectives on Information Systems

Perspectives on Information Systems

Perspectives on Information Systems

Contemporary Approaches to Information

Approach : Sociotechnical view

optimizing both social and technical systems used in production

Contemporary Approaches to Information

In a sociotechnical perspective, the performance of a system is optimized when both

Using Information Systems to Achieve

Why do some firms become leaders in their industry?

Michael Porters competitive forces model

New market entrants

Substitute products and services

Prentice Hall 2011

Using Information Systems to Achieve

Using Information Systems to Achieve

Generic strategies for dealing with competitive forces, enabled by

Using Information Systems to Achieve

competitors while enhancing quality and level of service

Using Information Systems to Achieve

Focus on market niche

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