Information and Organization
Lecturer:
Assoc. Prof. Sirle Duus Bürkland
COURSE CURRICULUM
The course textbook:
Management Information Systems: Managing the Digital
Firm, by Kenneth C. Laudon & Jane P. Laudon. 17th
Edition.
VIDEOS, CASES & EXERCISES, GROUP WORK
Links for further materials (in Moodle):
Tips, videos
Online materials and academic studies for further insights
Relevant reports from industry and business practice
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COURSE STRUCTURE
12 lectures in total
– involving cases/exercises, discussions
2 lectures online with pre-recorded materials
Lecture 4 – Monday, 31/10
Lecture 9 – Thursday, 17/11
Group work 1 – ERP failures, in class
Group work 2 – prepare at home, do the presentation in
Lecture 11 (or 12)
*Smaller group assignments and discussions during the
lectures/seminars
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THE TOPICS OF THE COURSE
Introduction
PART I Organizations, Management, and the Networked Enterprise
Chapter 1: Information Systems In Global Business Today
Chapter 2: Global E-business and Collaboration
Chapter 3: Information Systems, Organizations, and Strategy
Chapter 4: Ethical and Social Issues in Information Systems
PART II Information Technology Infrastructure
Chapter 5: IT Infrastructure: and Emerging Technologies
Chapter 6: Foundations of Business Intelligence: Databases and Inform. Management
Chapter 7: Telecommunications, the Internet, and Wireless Technology
(Chapter 8: Securing Information Systems)
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THE TOPICS OF THE COURSE cont.
PART IV Key System Applications for the Digital Age
Chapter 9: Achieving Operational Excellence and Customer Intimacy: Enterprise
Applications
Chapter 10: E-commerce: Digital Markets, Digital Goods
Chapter 11: Managing Knowledge and Artificial Intelligence
Chapter 12: Enhancing Decision Making
PART V Building and Managing Systems
Chapter 13: Building Information Systems
Chapter 14: Managing Projects
Chapter 15: Managing Global Systems
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EVALUATION
Written exam
2 hours
Quiz, exercises and theory questions
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Chapter 1
INFORMATION SYSTEMS IN GLOBAL
BUSINESS TODAY
LEARING OBJECTIVES
1.1 How are information systems transforming business, and why are they
so essential for running and managing a business today?
1.2 What is an information system? How does it work? What are its
management, organization, and technology components? Why are
complementary assets essential for ensuring that information systems
provide genuine value for organizations?
1.3 What academic disciplines are used to study information systems, and
how does each contribute to an understanding of information systems?
What is a sociotechnical systems perspective?
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VIDEO CASES
The book refers:
Business in the Cloud: Facebook and Google Data Centers
UPS Global Operations with the DIAD and Worldport
Much better insight:
Exclusive Insight: Visiting one of the Most Advanced Datacenters in the World
https://www.youtube.com/watch?v=bpTNcbnZjvY
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SMART STORES REINVENT THE RETAIL SPACE
◼
Smart stores with object-recognition cameras
❑
◼
Smart shelves with proximity sensors, 3D cameras, microphones,
RFID readers, weight sensors
❑
❑
❑
◼
Used for product stocking, on-shelf marketing to customers
AMW frictionless – walk-in/walk-out solution
❑
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Customers can interact with shelves
Customers can locate products via their mobile apps
Highly personalized shopping experience
◼ Advertisements; guiding the customer to other products
◼ Analyzing customer behavior – the shop can offer a discount.
Shelves shipped with wide cameras for retailers to view and track
their products in real time.
❑
◼
Products as objects, customers as objects
Works with mobile apps and facial recognition scans
HOW INFORMATION SYSTEMS ARE TRANSFORMING BUSINESS
In 2021, over 4.26 billion people were using
social media worldwide, a number projected
to increase to almost 6 billion in 2027.
Smart phone users:
◼ Social networking tools becoming more
critical for businesses to connect
employees, customers, and managers
◼ Internet advertising continues to grow at
more than 20% per year (some say 24.7%)
◼ New laws require businesses to store more
data for longer periods
◼ Pandemic has changed the business and
ways of working. Changes in business,
changes in jobs and careers
Source: Statista 2022
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Information technology (IT) worldwide spending from 2005 to 2023
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WHAT’S NEW IN MANAGEMENT INFORMATION
SYSTEMS (1 OF 3)
IT Innovations / trends
❑
Cloud computing
❑
Big data
❑
Internet of Things
❑
Mobile digital platform
❑
AI and machine learning
❑
Robotic Process Automation (RPA)
❑
Virtual Reality and Augmented Reality
New Business Models
❑
The servitisation (subscription) businesses
❑
Online streaming music and video
Platform-based business
❑
❑
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On-demand services
WHAT’S NEW IN MANAGEMENT INFORMATION SYSTEMS (2 OF 3)
◼
E-commerce expansion
❑
Retail e-commerce
❑ In 2021, retail e-commerce sales amounted
to $ 5.2 trillion worldwide.
❑ Expected to increase 56% in each coming
year.
❑
More than half of e-commerce sales were made
through mobile devices in 2021
❑
E-commerce is led by big players:
◼ For instance, Amazon accounts for 47 % of all
US e-commerce sales in 2020
Subscription model e-commerce
◼ Netflix (221 million subscribers), HBO, Apple,
etc.
Online mobile advertising now larger than desktop
❑
❑
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WHAT’S NEW IN MANAGEMENT INFORMATION
SYSTEMS (3 OF 3)
Management changes
❑
Remote workers
❑
Virtual meetings
❑
Workplace social networks, collaboration tools
❑
Data-based decision-making, business intelligence applications
accelerate
❑
Increasing use of analytics
Firms and organizations change
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❑
More collaborative, less emphasis on hierarchy and structure
❑
Greater emphasis on competencies and skills
❑
Higher-speed/more accurate decision making based on data
and analysis
❑
More willingness to interact with consumers (social media)
❑
Better understanding of the importance of IT
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
❑
Over half of the revenue of S&P 500 US firms is
generated off-shore
Growing interdependence of global economies
❑
◼ Requires new understandings of skills, markets,
opportunities
◼ Outsourcing low-wage online labour from Asia
◼ Effects of Covid on global sourcing – showing the fragility
of global commerce
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STRATEGIC BUSINESS OBJECTIVES OF INFORMATION
SYSTEMS
Growing interdependence between:
❑
Ability to use information technology
❑
Ability to implement corporate strategies and
achieve corporate goals
Firms invest heavily in information systems to achieve
six strategic business objectives:
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1.
Operational excellence (better term: operational
efficiency)
2.
New products, services, and business models
3.
Customer and supplier intimacy
4.
Improved decision making
5.
Competitive advantage
6.
Survival
Figure. The Interdependence Between
Organizations and Information Systems
OPERATIONAL EXCELLENCE
◼ Improved efficiency results in higher profits
◼ Information systems and technologies help improve
efficiency and productivity
◼ Example: Walmart
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❑
Power of combining information systems and best
business practices to achieve operational
❑
Most efficient retail store in world as result of digital
links between suppliers and stores
IMPROVED DECISION MAKING
◼ Without accurate information:
❑
Managers must use forecasts, best guesses, luck
Results in:
❑
❑
❑
Overproduction, underproduction
Misallocation of resources
Poor response times
◼ Poor outcomes raise costs, lose customers
◼ 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.
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Figure 1.7 The Business Information Value Chain
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IT ISN’T JUST TECHNOLOGY: A BUSINESS PERSPECTIVE
ON INFORMATION SYSTEMS
◼ Business perspective
❑
Calls attention to organizational and managerial nature of information systems
◼ Investing in information technology does not guarantee good returns (can even be the
opposite…)
◼ There is considerable variation in the returns firms receive from systems investments
◼ Factors
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❑
Adopting the right business model
❑
Investing in complementary assets (organizational, managerial, and social assets)
❑
Many other factors reported in empirical studies.
Figure 1.8 Variation in Returns on Information Technology
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THE EFFECT OF IT ON ORGANIZATIONS:
IT BUSINESS VALUE MODEL
<<<<<<
<<<<<
<<<<<<
<<<<<
The study by:
Melville, N., Kraemer, K. and Gurbaxani, V., 2004. Information
technology and organizational performance: An integrative model of IT
business value. MIS quarterly, 28(2), pp.283-322.
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EXAMPLE: IMPLEMENTATION OF INTEGRATED
MANUFACTURING
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Source: Brynjolfsson, Erik and Lorin M. Hitt. “Beyond Computation: Information Technology, Organizational Transformation, and Business
Performance.” Journal of Economic Perspectives 14, No. 4 (2000).
COMPLEMENTARY ASSETS: ORGANIZATIONAL CAPITAL
AND THE RIGHT BUSINESS MODEL
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:
Examples of organizational assets
Appropriate business model
Efficient business processes
Examples of managerial assets
Incentives for management innovation
Teamwork and collaborative work environments
Examples of social assets
The Internet and telecommunications infrastructure
Technology standards; Networks & collaborations
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CUSTOMER AND SUPPLIER INTIMACY
◼ Customers who are served well become repeat customers who
purchase more
❑
Example: Mandarin Oriental Hotel
❑
Uses IT to foster an intimate relationship with its customers,
keeping track of preferences, etc.
◼ Close relationships with suppliers result in lower costs
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❑
Examples: Mandarin Oriental Hotel and JC Penney (in text)
❑
JC Penney, UK retailer, uses IT to enhance relationship with
suppliers Asia – every time customer buys a product, the
record of this sale appears immediately in Hong Kong
supplier accounts
COMPETITIVE ADVANTAGE
SURVIVAL
◼ Often results from achieving previous
business objectives
◼ Businesses may need to invest in
information systems out of necessity;
simply the cost of doing business
◼ Advantages over competitors
◼ Charging less for superior products,
better performance, and better response
to suppliers and customers
◼ Your textbook suggests examples of
Apple, Walmart, UPS as industry leaders
because they know how to use
information systems for this purpose
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◼ Keeping up with competitors
❑ Citibank’s introduction of ATMs –
other banks rushed to follow
◼ Federal and state regulations and
reporting requirements
❑ Toxic Substances Control Act and
the Sarbanes-Oxley Act
FROM EFFICIENCY TO GROWTH:
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
Examples:
◼ Apple
❑
Transformed old model of music distribution
with iTunes
❑
Constant innovations—iPod, iPhone, iPad,
etc.
◼ Platform organizations and ecosystems
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Possible approaches that companies
choose:
Enhance products and services for a better
customer experience
Extend offerings for new revenue streams
Redefine core elements for a radically
reshaped customer value proposition
Create new digital capabilities.
Leverage information to manage across
the organization.
Integrate and optimize all digital and
physical elements.
DIGITALIZATION
FOR COST-CUTTING
(i.e. EFFICIENCY)
VERSUS
GROWTH
(1 of 2)
Björkdahl, J., 2020. Strategies for Digitalization
in Manufacturing Firms. California Management
Review
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DIGITALIZATION
FOR COST-CUTTING
(i.e. EFFICIENCY)
VERSUS
GROWTH
(2 of 2)
Björkdahl, J., 2020. Strategies for
Digitalization in Manufacturing
Firms. California Management Review
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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
❑
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Time shifting, space shifting
DIGITALIZATION – WHAT DOES IT INVOLVE?
◼
Digitalization has come to be seen as the fourth industrial revolution (after the steam
engine and mechanization, electricity and mass production, and computerization and
automation)
◼
“Digitalization involves the increased use of digital technologies and their integration and
cross-fertilization in the firm’s products and inbound and outbound activities.”
◼
In simple terms, digitalization can be seen as
❑ “increased generation, analysis, and use of data to increase the firm’s internal
efficiency, and on the other hand to grow the firm by adding value for customers
through the change from analog to digital formats.” (Björkdahl., 2020).
◼
So, it is seen as the ability to
❑
❑
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generate new data and ability to make use of it,
improve business processes by replace time-consuming procedures by digital processes
and/or connecting different tasks and processes in novel ways.
DIGITALIZATION IN
MANUFACTURING FIRMS
Björkdahl, J., 2020. Strategies for
Digitalization in Manufacturing
Firms. California Management Review
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DIGITALIZATION BY INDUSTRIES
Studies show managers find the organization
of and responsibility for digitalization quite
difficult.
Difficult to change business processes,
Successful efforts require re-optimization,
business process re-engineering
Several government programs to support
digitalization in manufacturing firms (in
Germany, France, US, the Netherlands, etc.)
How do they handle?
❑
Using consultants in business process reengineering, hiring CDOs, data scientists,
digitalization champions, ecosystem
strategies…
*CDO- chief data officer
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Image source: Montoriol-Caixa, 2015, Bank Research, Economics & Markets
Figure 1.3 Data and Information
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DIMENSIONS OF INFORMATION SYSTEMS: ORGANIZATION
Hierarchy of authority, responsibility
❑
Senior management
❑
Middle management
❑
Operational management
❑
Knowledge workers
❑
Data workers
❑
Production or service workers
Separation of business functions
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❑
Sales and marketing
❑
Human resources
❑
Purchasing
❑
Finance and accounting
❑
Manufacturing and production
❑
Logistics and warehousing
Figure 1.6 Levels in a Firm
GENERAL APPROACH OF YOUR TEXTBOOK: SOCIOTECHNICAL SYSTEMS
◼ A clear distinction between computer or computer program versus information
system
◼ Information technology: the hardware and software a business uses to achieve
objectives
◼ Information system is a set of interrelated components that collect (or retrieve),
process, store, and distribute information to support decision-making and control in
an organization.
◼ Management information systems:
❑
Combine computer science, management science, operations research, and
practical orientation with behavioral issues
◼ Sociotechnical view
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❑
Optimal organizational performance achieved by jointly optimizing both social
and technical systems used in production
❑
Helps avoid purely technological approach
Figure 1.10 A Sociotechnical Perspective on Information
Systems
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ANOTHER WAY OF SEEING SOCIOTECHNICAL SYSTEMS
Processes
(Organisation)
People
Information
Technology
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Figure 1.9 Contemporary Approaches to Information Systems
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End of unit 1
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