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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
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Globalization opportunities in Information System
- -Internet has drastically reduced costs of operating on global scale
- -Presents both challenges and opportunities
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In the emerging, 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
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Digital firms offer greater _________ in organizations and management
- flexibility
- -Time shifting, space shifting
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Business firms invest heavily in information systems to achieve 6 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
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Operational Excellence
- -Improvement of efficiency to attain higher profitability
- -Information systems, technology and important tool in achieving greater efficiency and productivity
- -Walmart's RetailLink system links suppliers to stores for superior replenishment system
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New products, services, and business models:
- -Business model: describes how company produces, delivers, and sells product or service to create wealth
- -Information systems and technology a major enabling tool for new products, services, and business models. Ex: apple's ipod, itunes, iphone, ipad, google's android OS, and netflix
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Customer and supplier intimacy
- -Serving customers well leads to customers returning, which raises revenues and profits. Ex: High-end hotels that use computers to track customer preferences and use to monitor and customize environment
- -Intimacy with suppliers allows the to provide valid inputs, which lowers costs. Ex: J.C. Penny's information system which links sales records to contact manufacturer
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Improved decision making
- -Without accurate information: managers must use forecasts, best guesses, luck. Leads to: Overproduction, underproduction of goods and services, misallocation of resources, poor response time. Poor outcomes raise costs, lose customers.
- -Example: Verizon's WEb-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, etc.
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Competitive advantage
- -Delivering better performance
- -Charging less for superior products
- -Responding to customers and suppliers in real time
- -Example: Apple, Walmart, UPS
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Survival
- -Information technologies as necessity of business
- -Maybe: Industry-level changes, e.g., Citibank's introduction of ATMs, Governmental regulations requiring recordkeeping. Ex: Toxic substances Control Act, Sarbanes Oxley Act
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Information system
- -Set of interrelated components
- -Collect, process, store, and distribute information
- -Support decision making, coordination , and control
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Information vs. data
- Data are streams of raw facts
- Information is data shaped into meaningful form
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3 activities of information systems produce information organizations need:
- 1. Input: captures raw data form organization or external environment
- 2. Processing: Converts raw data into meaningful form
- 3. Output: Transfers processed information to people or activities that use it
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feedback
Output returned to appropriate members of organization to help evaluate or correct input stage
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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
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Organizational dimension of information systems: Hierarchy of authority, responsibility
- senior management
- middle management
- operational management
- knowledge workers
- data workers
- production or service workers
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Management dimension of information systems
- 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
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Technology dimension of information systems
- computer hardware and software
- data management technology
- networking and telecommunications technology
- -networks, the internet, intranets and extranets, World wide web
- IT infrastructure: provides platform that system is built on
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Business perspective on information systems
- Information system is instrument for creating value
- Investments in information technology will result in superior returns:
- - productivity increases
- - revenue increases
- - superior long-term strategic positioning
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Business information value chain
- raw data acquired and transformed through stages that add value to that information
- value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits
- Business perspective: calls attention to organizational and managerial nature of information systems
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Investing in information technology does not guarantee good returns
Considerable variation in the returns firms receive from systems invetments
Factors:
- Adopting the right business model
- Investing in complementary assets (organizational and management capital)
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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
- Complementary assets include:
- -organizational assets, e.g., appropriate business model, efficient business processes
- -managerial assets, e.g., incentives for management innovation, teamwork and collaborative work environment
- -social assets, e.g., the internet and telecommunications infrastructure, technology standards
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Technical approach to information systems
- emphasizes mathematically based models
- computer, science, management science, operations research
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Behavioral approach to information systems
- Behavioral issues (strategic business integration, implementation, etc.)
- psychology, economics, sociology
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MAnagement information systems
- Combines computer science, management science, operations research and practical orientation with behavioral issues
- Four main actors
- -Suppliers of hardware and software
- -business firms
- -managers and employees
- -firm's environment (legal, social, cultural context)
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Approach of this book: Sociotechnical view
- Optimal organizational performance achieved by jointly optimizing both social and technical systems used in production
- helps avoid purely technological approach
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