Unit 1

1
Information Systems for Business
Prof. Amrita Jain (Data Analytics)
GL Bajaj Institute of Management & Research, Greater Noida.

Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved
Smart Stores Reinvent the Retail Space (1 of 2)
(91) AWM Frictionless™ Micromarket – YouTube
• Business Challenges
– Mounting competition from online retailers
– Take advantage of opportunities provided by new technology
• Solutions
– Acrelec system helps stores manage curbside pickup
– AWM Smart Shelf enables retailers to view and track products in
real-time; helps shoppers locate products using mobile devices;
personalizes shopper experiences
– AWM Frictionless enables low-contact cashierless checkout
Smart Stores Reinvent the Retail
Space (2 of 2)
• Illustrates how brick-and-mortar retail stores are using
information technology to compete more effectively against
online retailers
• Demonstrates I T’s role in driving business operations and
management decisions
• Illustrates how deploying new technology requires
companies to redesign jobs and procedures, changing how
companies run their businesses
How Information Systems Are
Transforming Business
• Global spending on information technology (IT) and IT
services is expected nearly $5.26 trillion in 2024;
$1,045.9 billion will be spent on management consulting
and services, with a CAGR of 7% and 5% respectively.
• Organizational, management, and cultural changes are
often required for firms to derive full business value from IT
investments
Information Technology Capital
Investment in US
Interactive Session: Management: Will the
Coronavirus Pandemic Make Working
from Home the New Normal? (1 of 2)
• Class Discussion
– Define the problem described in this case. What are
the management, organization, and technology issues
raised by this problem?
– Identify the information technologies used to provide a
solution to this problem. Was this a successful
solution? Why or why not?
Interactive Session: Management: Will the
Coronavirus Pandemic Make Working
from Home the New Normal? (2 of 2)
– Will working from home become the dominant way of
working in the future? Why or why not?.
Globalization Challenges and
Opportunities: A Flattened World
• Internet and global communications have greatly changed

how and where business is done
– Drastic reduction of costs of operating and transacting
on global scale
– Competition for jobs, markets, resources, ideas
– Growing interdependence of global economies
– Requires new understandings of skills, markets,
opportunities
The Emerging Digital Firm
• In a fully digital firm:
– Significant business relationships are digitally enabled
and mediated
– Core business processes are accomplished through
digital networks
– Key corporate assets are managed digitally
• Digital firms offer greater flexibility in organization and
management
– Time shifting, space shifting
Strategic Business Objectives of
Information Systems (1 of 2)
• Growing interdependence between:
– Ability to use information technology
– Ability to implement corporate strategies and achieve
corporate goals
The Interdependence Between
Organizations and Information Systems
Strategic Business Objectives of
Information Systems (2 of 2)
• Firms invest heavily in information systems to achieve six
strategic business objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival
Operational Excellence
• Improved efficiency results in higher profits
• Information systems and technologies help improve
efficiency and productivity
• Example: Walmart
– Power of combining information systems and best
business practices to achieve operational efficiency—
and over $648 billion in sales in 2024
– Most efficient retail store in world as a result of digital
links between suppliers and stores
New Products, Services, and
Business Models
• Information systems and technologies enable firms to create
new products, services, and business models
• Business model: how a company produces, delivers, and sells
its products and services
• Example: Apple
– Transformed old model of music distribution with iTunes
– Constant innovations—iPod, iPhone, iPad, etc.
Customer and Supplier Intimacy
• Customers who are served well become repeat customers who
purchase more
– Example: Mandarin Oriental Hotel
– Uses I T to foster an intimate relationship with its customers,
keeping track of preferences, etc.
• Close relationships with suppliers result in lower costs
– Examples: Walmart
Improved Decision Making
• Without accurate information, managers must use
forecasts, best guesses, and luck, resulting in
misallocation of resources, inventory, employees
• Real-time data improves ability of managers to make
decisions
– Example: Verizon’s web-based digital dashboard to
provide managers with real-time data on customer
complaints, network performance, line outages, etc.
Competitive Advantage
• Often results from achieving previous business objectives
• Advantages over competitors
– Charging less for superior products, better performance,
and better response to suppliers and customers
– Examples: Apple, Walmart, UP S are industry leaders
because they know how to use information systems for this
purpose
Survival
• Businesses may need to invest in information systems out
of necessity; it is simply the cost of doing business
• Keeping up with competitors
– Citibank’s introduction of AT Ms
• Federal and state regulations and reporting requirements
– Toxic Substances Control Act and the Sarbanes-Oxley
Act
What Is an Information System?
(1 of 3)
• Information technology: the hardware and software a
business uses to achieve objectives
• Information system: interrelated components that manage
information to:
– Support decision-making and control
– Help with analysis, visualization, and product creation
• Data: streams of raw facts
• Information: data shaped into a meaningful, useful form
20
Differences among Data, Information, BI, and Knowledge
What Is an Information System?
(2 of 3)
• Activities in an information system that produce
information:
– Input
– Processing
– Output
– Feedback
• Sharp distinction between computer or computer program
versus information system
What is an Information System?
(3 of 3)
• Feedback
– Output is returned to appropriate members of an
organization to help evaluate or correct the input stage
• Computer/computer program vs. information system
– Computers and software are technical foundations and
tools, similar to the materials and tools used to build a
house
Functions of an Information System
Components of Information Systems
1. Organization
2. Management
3. Technology
Information Systems Are More Than Computers
Components of Information Systems(1 of 2)
1. Organization
• Hierarchy of authority, responsibility
– Senior management
– Middle management
– Operational management
– Knowledge workers
– Data workers
– Production or service workers
Levels in a Firm
Components of Information Systems (2 of 2)
1. Organizations
• Separation of business functions

– Sales and marketing
– Human resources
– Finance and accounting
– Manufacturing and production
• Unique business processes
• Unique business culture
• Organizational politics
2. Management
• 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
3. Information Technology
• Computer hardware and software
• Data management technology
• Networking and telecommunications technology
– Networks, the Internet, intranets and extranets, World
Wide Web
• I T infrastructure: provides platform that system is built on
Interactive Session: Technology: UPS Competes
Globally with Information Technology
– What are the inputs, processing, and outputs of UP S’s package
tracking system?
– What technologies are used by UP S? How are these technologies
related to UP S’s business strategy?
– What strategic business objectives do UP S’s information systems
address?
– What would happen if UP S’s information systems were not
available?
Dimensions of UP S Tracking System
• Organizational
– Procedures for tracking packages and managing
inventory and provide information
• Management
– Monitoring service levels and costs
• Technology
– Handheld computers, bar-code scanners, networks,
desktop computers, and so on
Video Case
• Case: IS in Action: VisionX Lighting Grows with Business
One
Vision X Lighting with SAP Business One and Vision33 | C
ustomer Success Story (youtube.com)
Common Business Processes (1 of 2)
• Business processes
– Flows of material, information, knowledge
– Logically related set of tasks that define how specific
business tasks are performed
– May be tied to functional area or be cross-functional
• Businesses: Can be seen as collection of business
processes
• Business processes may be assets or liabilities
Business Processes (2 of 2)
The Order Fulfillment Process
How Information Technology Improves
Business Processes
• Increasing efficiency of existing processes
– Automating steps that were manual
• Enabling entirely new processes
– Changing flow of information
– Replacing sequential steps with parallel steps
– Eliminating delays in decision making
– Supporting new business models
Systems for Different Management Groups
(OR)
Types of Information Systems (1 of 2)
1. Transaction Processing Systems

2. Systems for business intelligence
a) Management Information Systems
b) Decision Support Systems
c) Executive Support Systems
3. Systems for Linking Enterprise: Enterprise Resource Planning
1. Transaction processing systems
– Serve operational managers and staff
– Perform and record daily routine transactions
necessary to conduct business
 Examples: sales order entry, payroll, shipping
– Allow managers to monitor status of operations and
relations with external environment
– Serve predefined, structured goals and decision
making
Example: A Payroll TP S
2. Systems for business intelligence
– Data and software tools for organizing and analyzing

data
– Used to help managers and users make improved
decisions
a) Management information systems
b) Decision support systems
c) Executive support systems
a) Management Information Systems
• Serve middle management
• Provide reports on firm’s current performance, based on
data from TP S
• Provide answers to routine questions with predefined
procedure for answering them
• Typically have little analytic capability
How Management Information Systems Obtain Their
Data from the Organization’s TP S
Sample MI S Report
Consolidated Consumer Products Corporation Sales by Product and Sales Region: 2020
b) Decision Support Systems
• Serve middle management
• Support nonroutine decision making
– Example: What is the impact on production schedule if
December sales doubled?
• May use external information as well as TP S / M I S data
• Model driven DS S
– Voyage-estimating systems
• Data driven DS S
– Intrawest’s marketing analysis systems
Voyage-Estimating Decision-Support
System
c) Executive Support Systems
• Support senior management
• Address non-routine decisions
– Requiring judgment, evaluation, and insight
• Incorporate data about external events (e.g., new tax laws
or competitors) as well as summarized information from
internal M I S and DS S
• Example: Digital dashboard with real-time view of the firm’s
financial performance
3. Systems for linking the enterprise
• Span functional areas
• Execute business processes across the firm
• Include all levels of management
• Four major applications
– Enterprise systems
– Supply chain management systems
– Customer relationship management systems
– Knowledge management systems
Type of System Information Information Users
Inputs Outputs
Transaction Transactions; daily Detailed reports; Operations
Processing events lists; summaries personnel; first-
Systems (TPS) line supervisors
Management Summary Summary and Middle managers
Information transaction data; exception reports
Systems (MIS) high-volume data;
simple models
Decision Support Optimized for data Interactive; Professionals,
Systems (DSS) analysis, analytic simulations; staff managers
models and data analysis
analysis tools
Executive Aggregate data; Projections; Senior managers
Support Systems external, internal responses to
(ESS) queries
Copyright © 2017, 2014, 2011 Pearson Education, Inc. All Rights Reserved.
E-business, E-commerce, and
E-government
• E-business
– Use of digital technology and Internet to drive major
business processes
• E-commerce
– Subset of e-business
– Buying and selling goods and services through Internet
• E-government
– Using Internet technology to deliver information and
services to citizens, employees, and businesses
Interactive Session: Organizations: The
City of Mississauga Goes Digital
• Class discussion
– Describe the problems the City of Mississauga hoped to address using
digital technology.
– What technologies did Mississauga employ for a solution? Describe each
of these technologies and the role each played in a solution.
– What management, organization, and technology issues did the City of
Mississauga have to address in developing a solution?.
– How did the technologies in this case improve operations and decision
making at the City of Mississauga?

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1

Information Systems for Business

Prof. Amrita Jain (Data Analytics)

GL Bajaj Institute of Management & Research, Greater Noida.

• Internet and global communications have greatly changed

• Separation of business functions

1. Transaction Processing Systems

– Data and software tools for organizing and analyzing

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