Information Systems in Business Today

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기업과 정보 (Management Information Systems)

Information Systems in Business Today

Chapter 1

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Management Information Systems, Global Edition기업과 정보 (Management Information Systems)

• Role of Information Systems in Today’s Business

• Data, Information, Information Systems

• Three Dimensions for Understanding Information Systems

• Two Approaches to Information Systems

Learning Objectives

Chapter 1: Information Systems in Global Business Today

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• Problem: Improving fan engagement through Big Data.

• Solutions:

– Provide data visualization and real-time statistics to draw in fans.

– Provide tactical insights to players and coaches that will improve match play.

• Rugby Football Union uses TryTracker to capture and analyze Big Data that will be useful to both fans and players.

Rugby Football Union Tries Big Data

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• How information systems are transforming business

– Emerging mobile digital platform – Growing business use of ^“ big data ^”

– Growth in cloud computing (google docs) – Advances in Artificial Intelligence

• Globalization opportunities

– Internet has drastically reduced costs of operating on global scale (alibaba.com)

– Increases in foreign trade, outsourcing

– Presents both challenges and opportunities

The Role of Information Systems in Business Today

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Information technology capital investment, defined as hardware, software, and communications equipment, grew from 14 percent to 33 percent of all invested capital between 1999 and 2013.

FIGURE 1-1

Information Technology Capital Investment

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Read the Interactive Session and discuss the following questions

Interactive Session: Management

• What kinds of applications are described in the case? What business functions do they support? How do they improve operational efficiency and decision making?

• Identify the problems that businesses in this case study solved by using mobile digital devices.

• What kinds of businesses are most likely to benefit from equipping their employees with mobile devices?

• Discuss the implications of this statement: “The iPhone is not a game changer, it’s an industry changer.”

MEET THE NEW MOBILE WORKERS

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• In the emerging, fully digital firm:

– Does not mean just adding computers to the mix

– 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 (24/7), space shifting (global business)

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• Growing interdependence between ability to use ICT and ability to implement corporate strategies

• Business 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

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In contemporary systems there is a growing interdependence between a firm’s 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

The Interdependence Between Organizations and Information Technology Chapter 1: Information Systems in Global Business Today

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• Operational excellence:

– ICT is an important tool in achieving greater efficiency, productivity, and higher profitability – Walmart ^’ s Retail Link 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 (income)

– ICT is a major enabling tool for new products, services, business models

• Examples: Apple’s iPad, Google’s Android OS, Netflix, IPTV, Podcast, SNS banking(kakao pay), social marketing, etc.

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• Customer and supplier intimacy:

– Serving customers ^⇒ customers intimacy ^⇒ greater revenues and profits.

• Example: High-end hotels that use computers to track customer preferences and used to monitor and

customize environment

– Provides vital information to suppliers ^⇒ supplier intimacy ^⇒ lower costs.

• Example: JCPenney’s information system which links sales records to contract manufacturer

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• Improved decision making

– Without accurate information:

• Managers must use forecasts, best guesses, luck

• Results in:

– Over or under-production – Resource misallocation – Poor response times

• 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

– Examples: Apple, Walmart, UPS

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• Survival

– IT as necessity of business

• Example: Parcel tracking

– Industry-level changes

• Example: Citibank’s introduction of ATMs

– Governmental regulations (record-keeping required)

• Examples: 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

• Information vs. data

– Data are raw facts.

– Information is data shaped into meaningful form.

Perspectives on Information Systems

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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

Data and Information

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• Activities of information systems

1. Input: Captures raw data from organization or external environment

2. Processing: Converts raw data into meaningful form

3. Output: Transfers processed information to people or activities that use it

4. Feedback: Output is returned to appropriate members of organization to help evaluate or correct input stage.

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IS contains information about an org. and its surroundings.

3 basic activities produce the information organizations need.

Feedback is output returned to appropriate people or activities to evaluate and refine the input.

Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory

agencies, interact with the organization and its IS.

Figure 1.4

Functions of an Information System

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• Computer/Computer program vs. IS:

Computers and software are technical

foundation and tools, similar to the material and tools used to build a house.

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Using IS effectively requires an

understanding of the organization,

management, and

information technology shaping the systems.

An IS creates value for the firm as an

organizational and

management solution to challenges posed by the environment.

Figure 1.5

Information Systems Are More Than Computers

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• Organizational dimension of IS – Organization has hierarchy.

• Senior management

• Middle management

• Operational management

– Types of workers in an organization:

• Knowledge workers: engineers, scientists, architects

• Data workers: secretaries, clerks

• Production or service workers

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Three management level: senior, middle, operational.

Scientists worker, knowledge workers: middle management.

Data worker, production worker, service workers: operational

management

Figure 1.6

Levels in a Firm

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• Organizational dimension of IS (cont.)

– Organization

• Is composed of departments for business functions

• Has various business processes

• Has unique business culture

• Has politics

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• Management dimension of IS

– Managers solve business problems and make business decisions

• 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 IS

– Technology includes

• Computer hardware and software

• Data management technology

• Networking and telecommunications technology

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Interactive Session: Organizations

UPS COMPETES GLOBALLY WITH I.T.

• http://www.youtube.com/watch?v=xXuuEkP-sAE

• United Parcel Services (UPS) invests heavily in IT to make its business

more efficient and customer oriented

• UPS uses an array of information technologies.

– DIAD (Delivery Information Acquisition Device) – Bar code scanning system

– On screen signature – Mobile networking – Parcel tracking system – Central main frame – Online pricing system

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Interactive Session: Organizations

• What are the inputs, processing, and outputs of UPS ^’ s package tracking system?

UPS COMPETES GLOBALLY WITH I.T.

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• Dimensions of UPS tracking system

– Organizational:

• Procedures for tracking packages and managing inventory and provide information

– Management:

• Monitor service levels and costs

– Technology:

• Handheld computers, bar-code scanners, networks, desktop computers, and so on

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• Business perspective on IS:

– Information systems are instruments 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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Although, on the average,

investments in IT produce returns far above those

returned by other investments, there is considerable variation across firms.

Figure 1.8

Variation in Returns on Information Technology Investment

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• Investing in information technology does not guarantee good returns.

• There is considerable variation in returns that firms receive from IT investments.

• Factors:

– Right IT for the 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

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The study of

information systems deals with issues and insights contributed from technical and behavioral disciplines.

Figure 1.9

Contemporary Approaches to Information Systems

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• Technical approach

– Emphasizes technology and (mathematical) models – Computer science, management science, operations

research

• Behavioral approach

– Behavioral issues (strategic business integration, implementation, etc.)

– Psychology, economics, sociology

Contemporary Approaches to Information Systems

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• Approach of this book: Sociotechnical view

– Objective: use of IS to maximally improve the performance of an enterprise

– Needs combination of the two approaches:

• MIS should be developed using the best solutions

developed in computer science, management science, OR, etc.

• MIS should be developed considering various issues discussed in sociology, psychology, economics, etc.

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Information Systems in Business Today

Information Systems in Business Today

Chapter 1

• Role of Information Systems in Today’s Business

• Data, Information, Information Systems

• Three Dimensions for Understanding Information Systems

• Two Approaches to Information Systems

• Problem: Improving fan engagement through Big Data.

• Solutions:

– Provide data visualization and real-time statistics to draw in fans.

– Provide tactical insights to players and coaches that will improve match play.

• Rugby Football Union uses TryTracker to capture and analyze Big Data that will be useful to both fans and players.

Rugby Football Union Tries Big Data

• How information systems are transforming business

– Emerging mobile digital platform – Growing business use of “ big data ”

– Growth in cloud computing (google docs) – Advances in Artificial Intelligence

• Globalization opportunities

– Internet has drastically reduced costs of operating on global scale (alibaba.com)

– Increases in foreign trade, outsourcing

– Presents both challenges and opportunities

Information Technology Capital Investment

Interactive Session: Management

• What kinds of applications are described in the case? What business functions do they support? How do they improve operational efficiency and decision making?

• Identify the problems that businesses in this case study solved by using mobile digital devices.

• What kinds of businesses are most likely to benefit from equipping their employees with mobile devices?

• Discuss the implications of this statement: “The iPhone is not a game changer, it’s an industry changer.”

MEET THE NEW MOBILE WORKERS

• In the emerging, fully digital firm:

– Does not mean just adding computers to the mix

– 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 (24/7), space shifting (global business)

• Growing interdependence between ability to use ICT and ability to implement corporate strategies

• Business 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:

– ICT is an important tool in achieving greater efficiency, productivity, and higher profitability – Walmart ’ s Retail Link system links suppliers to

stores for superior replenishment system

• New products, services, and business models:

– Business model: describes how company

produces, delivers, and sells product or service to create wealth (income)

– ICT is a major enabling tool for new products, services, business models

• Examples: Apple’s iPad, Google’s Android OS, Netflix, IPTV, Podcast, SNS banking(kakao pay), social marketing, etc.

• Customer and supplier intimacy:

– Serving customers ⇒ customers intimacy ⇒ greater revenues and profits.

• Example: High-end hotels that use computers to track customer preferences and used to monitor and

customize environment

– Provides vital information to suppliers ⇒ supplier intimacy ⇒ lower costs.

• Example: JCPenney’s information system which links sales records to contract manufacturer

• Improved decision making

– Without accurate information:

• Managers must use forecasts, best guesses, luck

• Results in:

– Over or under-production – Resource misallocation – Poor response times

• 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.

• Competitive advantage

– Delivering better performance

– Charging less for superior products

– Responding to customers and suppliers in real time

– Examples: Apple, Walmart, UPS

• Survival

– IT as necessity of business

• Example: Parcel tracking

– Industry-level changes

• Example: Citibank’s introduction of ATMs

– Governmental regulations (record-keeping required)

• Examples: Toxic Substances Control Act, Sarbanes-Oxley Act

• Information system:

– Set of interrelated components

– Collect, process, store, and distribute information

– Support decision making, coordination, and control

• Information vs. data

– Data are raw facts.

– Information is data shaped into meaningful form.

Data and Information

– Emerging mobile digital platform – Growing business use of ^“ big data ^”

– ICT is an important tool in achieving greater efficiency, productivity, and higher profitability – Walmart ^’ s Retail Link system links suppliers to

– Serving customers ^⇒ customers intimacy ^⇒ greater revenues and profits.

– Provides vital information to suppliers ^⇒ supplier intimacy ^⇒ lower costs.

– Example: Verizon ^’ s Web-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, etc.

• What are the inputs, processing, and outputs of UPS ^’ s package tracking system?