June 2010 more than 99 million businesses worldwide had dot come internet sites 2009 UPS moved over 15 million packages Supply chains have become more fast – paced with companies depending on SIT inventory to reduce overhead costs and market faster Businesses starting to use social networking to connect employees, customers, and managers What is New in Management Information Systems? Management information systems change in technology, management use of technology, and business success Successful firms are those that learn how to use new technologies Technology 1 .Cloud computing platform emerges as business are of innovation – computers on Internet perform tasks traditionally performed on corporate computers 2. Growth in software as a service (AAAS) – business applications online vs..
Boxed software 3. Mobile digital platform emerges to compete with PC – business users can download applications for business productivity on portable platforms Management 1 . Managers adopt online collaboration – used to support blobs, online meetings, etc. 2. Business intelligence applications – provide real time performance information to enhance decision making 3.
Virtual meetings – reduce travel time and cost while improving collaboration and decision making Organizations 1 . Web 2. Applications – new opportunities for business to collaborate with customers and vendors 2. Telethon gains momentum – people able to work away room office with Internet, ‘pads, etc.
3. Co – creation of business value – value shifts from products to solutions and experiences Business computing is moving from PC’s/ desktops to mobile devices Strength of cloud computing and growth of mobile digital decision making Globalization Challenges and Opportunities: A Flattened World Book by Thomas Friedman wrote that Internet and global communications had greatly reduced the economic and cultural advantages of developed countries Growing percentage of the economy in North America and other advanced industrial countries in Europe andAsia depends on imports and exports Not Just goods move across the border – Jobs, some of them high level, also move US lost several million manufacturing Jobs to offshore, low wage producers In a normal year about 300 000 service Jobs move offshore to lower wage countries Employment in information systems and other service occupations is expanding and wages are stable in non recessionary years Out sourcing has actually accelerated development of new systems in Canada and worldwide The emergence of the Internet into a full blown international communications system has reduced costs of operating and transacting on a global call Internet service firms are able to replicate business models and services in many countries Information systems enable globalization The Emerging Digital Firm Digital Firm: Firm where nearly all organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated.Any piece of information required to support key business decisions is available at any time and any place in the firm Digital firms sense and respond to environment rapidly (flexibility) Business Processes: Set of logically related tasks and behaviors hat organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated. Ex hiring an employee Core business processes are accomplished through digital networks spanning the entire organization or linking multiple organizations Ways organizations accomplish these processes can be a source of competitive strength Key Corporate Assets: Intellectual property, core competencies, financial assets, human assets which are managed through digital means Time Shifting: Business being conducted continuously, 2417Space Shifting: Work is accomplished physically wherever in the world it is best accomplished Strategic Business Objectives of Information Systems Information technology is a foundation for business in the 21st century There is a growing interdependence between a firm’s ability to use information technology and it’s 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/business models customer and supplier intimacy, improved decision making, competitive advantage, and arrival Operational Excellence – Information systems and technologies are some of the most important tools available to managers for achieving higher levels of efficiency and productivity in and management behavior – Ex.Walter’s Retail Link system which links suppliers to everyone of Walter’s stores. When item is purchased, supplier knows to ship replacement to shelf New Products, Services, and Business Models – Business Model: Describes how a company produces, delivers, and sells a product or service to create wealth – Information systems and technologies are a major enabling tool for firms to create new products and services – Ex.
Apple transforming old business model of music distribution into online legal distribution (tunes) Customer and Supplier Intimacy – More a business knows a customer, more they are loyal. More business engages suppliers, better the suppliers can provide vital input – Ex.Mandarin Oriental Hotel keeps track of guest’s preferences (room temp, TV programs, etc) in a data repository. When a customer arrives at the hotel the system changes the room conditions to their preferences Improved Decision Making – Information systems and technologies have made it possible for managers to use al time data from the marketplace when making decisions – Ex. Tarmac trucking firm uses assessment of key performance indicators. Creates consistent reporting across organization so necessary data is easily identified Competitive Advantage – Doing things better than competitors, charging less, responding to customers and suppliers = higher sales and profit – Ex.
Information System: Set of interrelated components that collect or retrace, process, store, and distribute information to support decision making and control in an organization Creates value for firm as an organizational and management solution to challenges IS support decision making, coordination, control, and help managers/ works analyze problems, visualize complex subjects, and create new products Information: Data that have been shaped into a form that is meaningful and useful IS contain information about significant people, places, things within the organization or surrounding it Data: Streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand/use Ex. Supermarket scans pieces f data from bar codes; pieces can be analyzed to provide information like total number of product at store, which brands are popular, etc.Three activities – input, processing, and output – produce information organizations need to make decisions, Captures or collects raw data from within organization or its external environment Processing: Converts raw input into meaningful form Output: Transfers processed information to people who will use it or to the activities which it will be used IS also provide feedback to help members evaluate or correct the input stage Computer – Based Information Systems: Use computer technology to recess raw data into meaningful information but there is a distinction between a computer/computer program on the one hand and an information system on the other Computers provide equipment for storing and processing information Computer programs are sets of operating instructions that direct/control computer processing Dimensions of Information Systems Information Systems Literacy: Broader understanding of IS which encompasses an understanding of the management and organizational dimensions of systems as well as the technical dimensions of systems Computer Literacy: Focuses primarily on knowledge of information technology Management Information Systems (MIS): Tries to achieve broader information systems literacy.Deals with behavioral issues and technical issues in development, use, and impact of IS There are three dimensions of IS – organizations, management, and information technology Organizations – Key elements of an organization are its people, structure, business processes, politics, and culture – Structures reveal clear cut division of labor – Organized in hierarchy or pyramid where upper levels are managerial, professional, and technical employees while lower levels are operational personnel – Senior Management: Makes long range strategic decisions about products and services and ensure financial performance of firm – Middle Management: Carries out programs and plans of senior management – Operational Management: Responsible for monitoring daily activities of business – Knowledge Workers: Design products/ services and create new knowledge for firm (ex. Engineer) – Data Workers: Assist with scheduling and communications at all levels of firm (ex.Secretary) – Production or Service Workers: Produce product and deliver Service – Business Functions: Specialized tasks consisting of sales/marketing, manufacturing/production, finance/ accounting, and human resources performed by business organizations (experts trained for these functions) – Organization coordinates work through hierarchy and its business processes – Culture: Fundamental set of assumptions, values, and ways of doing things that have been accepted by most members of an organization Management – Management’s Job is to make sense out of many situations, make decisions, and formulate action plans – Managers perceive challenges and set strategy for responding by allocating human/financial resources – Managers have to create new products/services and re – create organization at times so they are helped by information technology in designing and delivering new products/services Information Technology – Computer Hardware: Physical equipment used for input, processing, and output activities in IS – Consists of computers (including hand held devices), various input, Computer Software: Detailed, preprogrammed instructions that control and coordinate computer hardware in an IS – Data Management Technology: Software governing organization of data on physical storage media – Networking and Telecommunications Technology: Physical devices and software, links the various pieces of hardware and transfers data from one physical location to another -Network: Links two or more computers to share data/resources, such as printer – Internet: Most widely used networks with more than 1.
4 billion users in over 230 countries – Intranets: Internal corporate networks based on internet technology – Extranets: Private intranets extended to authorized users outside the organization used for coordinated activities with other firms for making purchases, collaborating on design, etc. – World Wide Web: Service provided by internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format on the internet. Can serve as foundation for new kinds of IS (ex.UPS web based package tracking system) – Information Technology Infrastructure: Provides foundation or platform on which firm can build specific IS – Each organization has to carefully design and manage its IT infrastructure so it has the set of services it needs for the work it wants to accomplish with IS It Is Not Just Technology: A Business Perspective on Information Systems From a business perspective, IS is important instrument for creating value in a firm because it provides real economic value to business through increase in productivity, allowing managers to make better decisions, etc Complementary Assets: Organizational Capital and the Right Business Model Some firms achieve better results from IS than others due to complementary assets Complementary Assets: Assets required to derive value from a primary investment (ex. Value from cars needs investments in highways, etc.