Chapter 1 1.0 Introduction to Information Systems - - - Information is most important resource to companies. 1980’s: most job losses were in blue collar VS now: most losses are white collar management jobs Global spending on IT: 3.8 trillion in 2019 VS spending on management consulting services: 160 billion Communication is increasingly carried out through: email, online conferencing, international teleconferencing. o Internet technologies have become essential tools. IT innovations: cloud computing, mobile digital platforms, AI, machine learning, robotics New business models are new ways for creating value for customers and making revenue. o E.g., Netflix offered a new business model in entertainment + streaming. o E.g., Uber, Airbnb E-commerce expansion: COVID-19, mobile technology development has helped ecommerce (EC) to expand faster than ever before. Management changes: management is using social media, business intelligence, and analytics to improve relations with customers, suppliers, and employers, Firms + organization changes: organizations are more flattened than before; middle management levels are being eliminated because of the growth of decision support systems. Globalization: o (+) Provides companies with opportunities of outsourcing of resources for lower costs. o (-) Greater competition for jobs, markets, resources, ideas. o (-) Growing interdependence on global economies. o (-) Requires new skill markets, opportunities. Emerging digital firms: significant business relationships are digitally enabled. o Core business processes are accomplished through digital networks. o Key corporate assets are managed digitally. o Offer greater flexibility in organization + management. o Time-shifting + space-shifting allow businesses to be conducted at any time/place. o Ideally suited for global operations which take place in remote locations, different time zones 1.1 IT & Business Strategies - Organizations + IT interdependence: mutual relationship between IT strategy + business strategy. - - o In contemporary systems, there is a growing interdependence between firm’s IS + business capabilities. Changes in strategy, rules, business processes increasingly require changes in hardware, software, databases, telecommunications. o What the organization would like to do depends on what its system will permit. Businesses need to invest in IT to do what they would like to do. Having significant IT platform can impact business strategies. Strategic business objectives: o Operational excellence: IS are most important tools for managers to achieve higher levels of efficiency + productivity in business operations. E.g., Walmart stores are linked to suppliers for efficient inventory, procurement processes through a network. o New products, services, business models o Customer + supplier intimacy: when businesses know their customers well + respond accordingly, customers respond by purchasing more. Similarly, when business engage suppliers, the better the suppliers can provide vital inputs. E.g., JC Penny’s IS digitally link the suppliers to each of its stores o Improved decision making: IS allows managers to use real-time data. o Competitive advantage: IS helps companies to perform better than competitors, charge less for superior products, respond to customers/suppliers in real time. E.g., Toyota, Walmart o Survival: IS have become necessities E.g., Citibank was the first bank to offer ATM services; other banks had to follow E-commerce: limited to buying/selling goods + services on networks. E-business: includes e-commerce + broad range of tasks (e.g., coordinating customer training seminars) 1.2 Introduction to Supply Chain - Supply chain (SC): involves everybody from customer to last supplier. o Key flows: information, product, cash o Management of flows is key to success. Original equipment manufacturer: company that supplies components that are used in the production of goods by other manufacturers. Pull (make-to-order) SC model: execution is initiated in response to a customer order, reactive. Push SC model: execution is initiated in anticipated (i.e., forecasting) of customer orders, speculative. Supply chain macro-processes o Supplier relationship management (SRM): source, negotiate, buy, design collaboration, buy, design collaboration, supply collaboration o Integrated supply chain management (ISCM): strategic planning, demand planning, supply panning, fulfillment, field service o Customer relationship management (CRM): market, price, sell, call center, order management. - Supply chain objectives: final objective is maximizing net value generated by SC. o This can be achieved through optimization of transportation, inventory levels, utilization of resources using engineering methods. Supply chain decisions: information flow, products, inventories, supplier selections, funds o Decisions may be categorized as: design, planning, operational Chapter 2 2.0 Global E-Business + Collaboration - - - - - Organization of IS: o Four types: executive support systems (ESS), decision support systems (DSS), management information systems (MIS), transaction processing systems (TPS) o Three organizational levels: strategic, management, operational Transaction processing system (TPS): basic business system that serves organizations’ operational levels. o Input: any transaction or event o Processing: sorting, listing, merging, updating o Output: detailed lists, reports, summaries Management information system (MIS): o Input: summary transaction data, high volume data, simple models (e.g., rations, visualizations) o Processing: simple models, low-level analysis o Output: summaries, graphical outputs Decision support Systems (DSS): serve management level data analysis for making decisions. o Used by middle managers for: supplier selection, aggregate planning, maintenance prediction, etc. o Input: MIS + TPS data (could be low or massive amount of data) o Processing: sensitivity analysis, simulations o Output: special reports, decision analyses, query responses Executive support systems (ESS): rely on accurate inputs from MIS, DSS, TPS o Input: internal MIS, DSS, TPS data + external data of customers, market, suppliers, etc. o Output: projections, query responses o Digital dashboards with real-time view of financial performance are a critical feature. 2.1 Business Processes - E.g., checking product for quality in manufacturing + production, selling product in sales + marketing, paying creditors in finance + accounting, evaluating job performance in human resources Order fulfillment: - - - - o Three levels: sales, accounting, manufacturing + production Sales: generate order, submit order Accounting: check credit, approve credit, generate invoice Manufacturing + production: assemble product, ship product Enterprise application: IS that serves business processes. o Used to coordinate + integrate information used in TPS, DSS, MIS, ESS o Pull information from many parts of the firm at different organizational levels + suppliers, customers. o Four types: enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM), knowledge management systems (KMS) Enterprise resource planning (ERP): optimize utilization of resources of business firms through an integrated, consolidated system. Supply chain management system (SCM): automate flow of information between firms, suppliers to optimize production + delivery. o Goal: move products as efficiently as possible. Optimize SC resources. Manage relationships. Manage shared information. Automate flow of information across organizational boundaries. o Inter-organizational systems o SCMS must be designed with business processes of potential partners + businesses in mind. Customer relationship management systems (CRMS): important for sales, marketing, customer service. o Goals: improve customer satisfaction, increase customer retention, identify + retain most profitable customers, increase sales, optimize revenue Knowledge management systems (KMS): useful for helping firms’ employees to understand how to perform certain business processes or how to solve problems. o Knowledge management cycle: process of transforming information into knowledge within an organization which explains how knowledge is captured, processed, and distributed. Link internal to external sources of knowledge. Manage processes for capturing + applying knowledge + expertise. Collect + make knowledge available to improve business processes + decisions. 2.2 Information Systems for Global Collaboration - Intranet + extranet: use internet to communicate internally to employees. o Extranet: public facing parts o Intranet: accessed only by employees E-business: use of digital technology + intranet to drive major business processes. E-commerce: buying + selling goods + services using the internet. Collaboration: o Defined: - - - Changing nature of work Growth of professional work “interaction jobs” Changing organization of the firm Changing scope of the firm Emphasis on innovation Changing culture of work o Benefits: Sales, marketing, research + development rewards Increased productivity Increased quality Innovation Improved customer service Better financial performance o Requirements: Two primary ingredients: 1) open culture, decentralized framework (how much collaboration is possible), 2) collaboration technology + means o Tools: email, wikis, blogs, virtual worlds Social business: using social media platforms for business related purposes. Collaboration benefits: o Sales, marketing, research + development rewards o Increased productivity o Increased quality o Innovation o Improved customer service o Better financial performance IS department: o Chief Information Officer (CIO) – head o Chief Security Officer (CSO) o Chief Knowledge Officer (CKO) o Chief Privacy Officer (CPO) o Chief Data Officer (CDO) o Programmers o System analysts o IS managers o End users IT management system organization: o Standards: ISO20000, COIBT, ITIL o Centralized IT management departments: Benefits: standardized services, cost saving o Decentralized IT management departments: Benefits: fast response, customization