Management information systems

managing the digital firms

Kenneth c Laudon

Course Orientation
Basically Theoretical focus
Introduction to Concepts and Issues in the field of INFORMATION SYSTEMS

But

The practical orientation will also be a major focus of the course Video clips Real world Case Studies Project

Course Administration
Final Assessment criteria
Final Exam Mid Term Project Quizzes Assignment, Class Participation, 15% Case presentation 5% 35% 20% 15% 10%

Attendence

LECTURE 1

Lecture 1 Information Systems in Global Business Today

Chapter Overview

Basic introduction Role of information systems relate it to Opening Real world Case Information systems transforming business

New trends in technology

Emerging digital firms What is Information technology? What is an information system?

Define an information system from both a technical and a business perspective.

Identify and describe the three dimensions of information systems. Components of IS and its resources. Activities or functions of an information system

Complementary Assets.
Contemporary approaches to Information Systems.

WHY MIS???

Whole new world of doing business using new technologies for organizing business operations. Course gives in depth look at how Business firms use IT and systems to achieve corporate objectives.

Basic introduction
This chapter gives you an overview of many of the subjects we'll touch in this course.
Continual stream of information technology innovations transforming the traditional business world.

Knowledge and information based economy

New internet business culture

MIS BECOME INTEGERAL PART OF BUSINESS

Lecture 1 Information Systems in Global Business Today

Role of information system in Business today

IS are foundation of conducting business.

Many industries survival and existence depends on information systems.
Eg: E-Commerce firms such as Amazon and E-bay would not exist.
Take a look around you and see if you can find a business that does not depend on information technology in one form or another

Lecture 1 Information Systems in Global Business Today

Information systems transforming business Information systems transforming business

Between 1980-2007 investment in IT grew from 34% to 54% of all invested capital.
Cell phones, iphones, blackberrys and online conferencing over the internet have all become essential tools for business. Internet advertising and ecommerce are booming. Internet advertising continues to grow at 25%. 85% of online users are engaging in ecommerce. Virtual Meetings proliferate. (video and web conferencing, growing at 30%)

Lecture 1 Information Systems in Global Business Today

Information systems transforming business

Newspaper readership declined,64 million receive news online. 67 million Americans reads blogs,new forms of customer feedback

Social networking sites Myspace and facebook attract 70 to 30 million visitor

Business use social networking to connect to their customers, employees and suppliers.(example make facebook to market and reach out)

Lecture 1 Information Systems in Global Business Today

The Role of Information Systems in Business Today

Information Technology Capital Investment

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 of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 2006.

Figure 1-1

The Role of Information Systems in Business Today Whats New in MIS?

Technology

Cloud Computing More powerful, energy efficient computer processing and storage devices Growth in software as a service (SAAS) Netbooks emerge as a growing presence in the PC marketplace Managers adopt online collaborations Social networking software to improve coordination, collaboration, and knowledge sharing Managers have smartphonesand mobile internet devices Virtual meeting proliferation. Web 2.0 applications are widely adopted Telework gains momentum in workplace Outsourcing productions

Management

Organizations

Lecture 1 Information Systems in Global Business Today

Three major new Trends in Information Systems

Technology area there are three interrelated changes

1.Emerging mobile digital platform

(Examples Iphone and blackberry's)

2.Growth of online software SAAS

3.Cloud computing(business software runs over the internet)

What new in MIS (Refer to table 1.1 on pg 8)

Lecture 1 Information Systems in Global Business Today

Power of Cloud computing

Cloud is simply a metaphor for the internet. Users do not have or need knowledge, control, ownership in the computer infrastructure . Users simply rent or access the software/App in cloud, paying only for what they use . Pay as u go No maintenance Less investment Upgrades are taken care of EXAMPLE: IBM CLOUDBURST

Sales force cloud computing(Visit www.salesforce.com for more info on cloud computing)

Globalization
The internet has reduced the costs of operating and transacting on a global scale. Firms can find low cost suppliers and manufacturing production facilities in other countries. Information systems enable globalization.

Lecture 1 Information Systems in Global Business Today

Emerging Digital Firms

All of these changes described earlier have created fully digital firms.

Digital firms have the following characteristics:

All of organization significant relationships with customers ,suppliers and employees are digitally enabled and mediated. Core business processes are accomplished through digital networks.

Key corporate assets are managed digitally

Time shifting(24/7) and space shifting (globally and national boundaries). Digital firm must connect each functional area and each management level to one another

All info is available anytime anywhere in the firm

Use internet to drive every aspect of their business EXAMPLE :DELL COMPUTERS,CISCO systems, ACCENTURE are close to becoming digital.

Lecture1 Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

The Interdependence Between Organizations and 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 would like to do depends on what its systems will permit it to do.

Figure 1-2

Lecture 1 Information Systems in Global Business Today

Business objectives
Firms invest in Information systems to achieve six strategic business objectives.

1. Operational excellence
High Level of productivity and efficiency
(Example:Wal-Mart retail link system)

2.New product services and business model

(Example: Apple has changed old business model CD distribution to I pod technology platform)

3.Customer and supplier Intimacy

(Example: high end hotels keep a track of guest preferences,JC penny)

Lecture 1 Information Systems in Global Business Today

Business objectives (continued)

4.Improved decision making
Example: Doctors used advanced systems for diagnosis.
Managers use digital dashboards

5.Competitive advantage
Example: Toyota world largest automaker,Toyata production system Dell web based order entry model)

6.Survival
Business firms invest in IT because they are necessities of doing business
Example: Citibank Atm .ATM Services need to be offered for surviving in retail banking)

Lecture 1 Information Systems in Global Business Today

Definition of information technology

Information Technology is the use of hardware, software, by a firm to achieve its business objectives. Includes not only computers ,printers ,handheld PDAS,but also software such as Windows and many other programs found in a firm.

Lecture 1 Information Systems in Global Business Today

IS
INFORMATION TECHNOLOGY Hardware Software Databases

Vs IT

Payroll System

Inventory System
are used to build INFORMATION SYSTEMS Marketing System

Networks
Other related components

Customer Service System

Lecture 1 Information Systems in Global Business Today

What is an Information System (Technical perspective)

Technical Definition:
An information system can be defined technically as a set of interrelated components that collects, process, store and distribute information to support decision making and control in an organization

Lecture 1 Information Systems in Global Business Today

Information System Resources

Data Vs. Information Data raw facts or observations, objective measurements of the characteristics of entities such as people, places, things and events Information data that has been converted to a meaningful and useful context for specific end users.

Chapter 1 Information Systems in Global Business Today

Perspectives on Information Systems

Data 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.

Figure 1-3

Lecture 1 Information Systems in Global Business Today

Functions of an Information System?

Three activities in an information system produce the information that organization need to make decision, control operation, analyze problems and create new products.

Feedback

Input

Processing

Output

Feedback: data about the performance of a system or output returned for evaluation and correction of input. Control: Monitoring and evaluating feedback to determine whether a system is moving towards the goal.

Lecture 1 Information Systems in Global Business Today

Dimension of Information Systems

To fully understand IS require the broader understanding of organization, management and information technology
An Information systems represents a combination of management, organization and technology elements Understanding of these three dimensions is termed as

information system literacy.

Computer literacy:knowledge of information technology.

Lecture1 Information Systems in Global Business Today

Dimensions of an Information Systems

Information 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.

Figure 1-5

Organization Dimension
Information systems are an integral part of organizations.
Organization dimension of information system involves organization hierachy,functional specialities,business processes,culture. E.g UPS concerns with placing service to the customer first is an aspect of its org culture that can be found in the companys package tracking system.

Lecture 1 Information Systems in Global Business Today

Organization
Levels in an organization.

(information systems serve

each of these levels)

Senior Management

Middle management Scientist and knowledge workers

Operational management Production and service workers Data workers

Major Business Functions table1-2

Information systems support these business functions
FUNCTION
Sales and Marketing Manufacturing and Production Finance and Accounting PURPOSE
Selling the organization product and services Producing and delivering products and services Managing the organization financial assets and records Attracting, developing and maintaining the labor force; maintaining employees records

Human resources

Management dimension
Involves leadership
Strategy and Management behavior

Information systems help managers design and deliver new products and redirecting and redesigning organization.

Technology dimension
Invest in technology infrastructure Computer hardware Software Data management technology

Networking and telecommunications

Internet

In short, Information system provides a solution to the problem facing the firm and represents a combination of management ,organization and technology elements.

Lecture 1 Information Systems in Global Business Today

What is an Information System

Business Perspective

Information systems contribute to corporate value.

They enable the firm to increase revenue and decrease cost. Ultimately increase a firms profitability by providing information that helps managers make better decisions or improve execution of business process.

Interactive session/Assignment#1
Management Virtual Meetings:

Q: If

you are in charge of small business, would you choose to implement videoconferencing? What factors you will consider in your decision?

LECTURE 2

36

Lecture2

Chapter 1 Information Systems in Global Business Today

Information system
people,
hardware, software,

is an organized combination of

communication networks and the data resources this system collects (input), transforms (process) ,stores and disseminates (output) information in an organization.

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Lecture2 Chapter 1 Information Systems in Global Business Today

Components or resources of an IS
Information system depends on the resources of people, hardware, software, data and networks to perform input, processing ,output, storage and control activities that convert data resources into information products.

Components(resources) of an INFORMATION System

Lecture2 Chapter 1 Information Systems in Global Business Today

Information Systems Resources And Products

People resources:
- IS specialist (system analysts, software developers, system operators). - end users (anyone else who uses

information systems).
Hardware resources: - machines (computers, video monitor, magnetic disk drives, printers, optical scanners). - media (floppy disks, magnetic tape, optical disks, plastic cards, paper forms).

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Lecture2

Chapter 1 Information Systems in Global Business Today

Information Systems Resources And Products (continued)

programs, word processing programs).

Software resources:
- programs (operating system program, spreadsheet

- procedures ( are the operating instructions for the people who will use the info systems, using a software package, data entry procedures, error correction procedures).

Data resources:
- product description, customer records, employee files, inventory databases.

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Lecture2 Chapter 1 Information Systems in Global Business Today

Information Systems Resources And Products (continued)

Network resources: -communication technologies and networks like internet,,

intranet, communications media like fiber optic cables, wireless technologies, communication processors modem, network access and control software network operating software).

Information products: - management reports and business documents using text and graphics displays, audio responses, and paper forms.
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Lecture 1 Information Systems in Global Business Today

Variation in Returns Why?

Investing In IT does not by itself guarantee good returns.

E.g: Record label companies fail adopt a new business model of online music distribution.Sales are dominated by Apple.

Lecture 1 Information Systems in Global Business Today

Complimentary assets
Answer lies in complimentary assets

Complimentary assets are those assets that are required to derive value from a primary investment. Firms that support their investment in IT with investment in complimentary assets such as new business models, new business processes, organizational culture, management behavior, trainings etc, receive superior returns.

Lecture 1 Information Systems in Global Business Today

Complementary Assets table 1-3

Organizational assets
Supportive organizational culture that values efficiency and effectiveness Appropriate business model Distributed decision-making rights Strong IS development team

Managerial assets
Strong senior management support for technology investment and change Incentives for management innovation Teamwork and collaborative work environment Training programs to enhance management decision skills Management culture that values flexibility and knowledge-based decision making Social Assets

Set by the society

Internet and telecommunications infrastructure IT enriched educational programs Networking and computing Standards ( both government and set by society) Laws and regulation

Complimentary assets
Investments in organization and management are known as organizational and management capital. Value of investment in information technology depends to a large extent on complimentary investments in management and organization.

Complimentary assets
Course emphasize a framework of analysis that considers technology, management and organizational assets and their interaction. Theme of course. managers need to consider the broader organization and management dimensions of information systems to derive value from IT technology investments.

Chapter 1 Information Systems in Global Business Today

Contemporary Approaches to Information Systems

The study of information systems is a Multi-disciplinary field

The study of information systems deals with issues and insights from Technical and Behavioral disciplines.

Computer Science

Operations Research

Manageme nt Science

Sociology

Psychology

Economics

Approach of this text :Socio technical systems

Information system are Socio technical systems. Require substantial social, organizational and intellectual investments to make them work properly.

Only IT alone will not lead to productivity enhancement.

Performance is maximized when technology and organization mutually adjust.

Technology must be changed and designed as to fit the organizational and individual needs. In this course we will study management information systems that is study of information systems in business and management.

Information systems as socio technical systems

Sociotechnical systems The success and failure of information systems are rarely all technical or all behavioral Optimal performance is achieved Jointly optimizing both the social and technical systems Ex: recently installed enterprise-wised financial reporting system Can not guarantee it will be used Ex: recently introduced business procedure and process Can not assure that employee will be more
productive

In this book we stress the need to optimize the firms performance as a whole. Both technical and behavioral components needs attention. Organization and individual must also be changed Training, learning, Planed organizational change to allow technology to prosper.

Process of Mutual adjustment in a socio technical system

Management Information Systems

Chapter 1 Information Systems in Global Business Today Perspectives on Information Systems

ASSIGNMENT 2 UPS Competes Globally with Information Technology Read the Interactive Session: Technology, and then discuss the following questions: What are the inputs, processing, and outputs of UPSs package tracking system? What technologies are used by UPS? How are these technologies related to UPSs business strategy? What problems do UPSs information systems solve? What would happen if these systems were not available?