Chapter 1: Information Systems in
Global Business Today
1.1
The Role of Information Systems in Business Today
In the technology area, there are 3 interrelated changes:
(1) Emerging mobile digital platform (e.g. smartphones that allow social networking & collaboration)
(2) Growth of online software as a service
(3) Growth in “cloud computing” where more and more business software runs over the Internet
What is new in MIS?
Technology

Cloud computing
o
Flexible collection of computers on the Internet begins to perform tasks traditionally
performed on corporate computers

More powerful, energy-efficient computer processing and storage devices

Software as a service (SaaS)
o
Major business applications are now delivered online as an Internet service rather than as
boxed software or custom systems

Netbooks
o

Small, lightweight, low-cost, energy efficient, net-centric sub-notebooks
A mobile digital platform emerges to compete with the PC as a business system
Management

Managers adopt online collaboration and social networking tools to improve coordination,
collaboration and knowledge sharing

Business intelligence applications

Managers adopt millions of mobile tools such as smartphones and mobile Internet devices to
accelerate decision making and improve performance

Virtual meetings
Organizations

Widespread adoption of Web 2.0 applications

Telework (wireless)

Outsourcing production

Co-creation of business value with suppliers & customers
Globalization: Challenges and Opportunities

Growing percentage of economies in North America, Europe and Asia depends on imports and
exports

Local jobs lost to offshore, low-wage producers

Fast communication with overseas suppliers and distributors

MISs have reduced the costs of operating and transacting on a global scale
The Emerging Digital Firm

Digital firm: firm in which nearly all of the organization’s significant business relationships with
customers, suppliers and employees are digitally enabled and mediated

Business processes: set of logically related tasks and behaviours that organizations develop over
time to produce specific results and the unique manner in which these activities are organized
and coordinated
o

E.g. new product development, hiring an employee, etc.
Key corporate assets are managed through digital means, so any piece of information is available
at anytime and anywhere in the firm
o
Intellectual property
o
Human capital
o
Capital assets

Faster response time to environment = flexibility

Time shifting and space shifting are the norm
o
Time shifting – business conducted 24/7
o
Space shifting – work is accomplished physically wherever in the world it is best
accomplished
WINDOW ON MANAGEMENT
Virtual Meetings: Smart Management

Difference between videoconferencing and telepresence is that the latter makes users feel like
they are actually in a different location

Videoconferencing saves time & money spent on travelling and makes it possible to meet
contacts that you would otherwise not be able to meet at all
Strategic Business Objectives of Information Systems


Operational excellence
o
High levels of efficiency and productivity in business operations
o
E.g. Walmart & inventory management
New products, services and business models
o
Business model: describes how a company produces, delivers, and sells a product or
service to create wealth
o


E.g. iTunes
Customer and supplier intimacy
o
Good customer service = returning customers = more revenue and profits
o
Supplier intimacy = vital inputs = lower costs
Improved decision making
o


Competitive advantage
o
If previous 4 are achieved, likely will have competitive advantage
o
E.g. Toyota
Survival
o
1.2

Provide timely information from the marketplace
Necessary b/c of industry-level changes
Perspectives on Information Systems
Information technology (IT): all the hardware and software that the firm needs to use in order
to achieve its business objectives
o
Data(base)
o
Hardware
o
Software
o
Telecommunications
What is an Information System?

Information system (IS): set of interrelated components that collect, retrieve, process, store and
distribute information to support decision making and control in an organization

Information: data that have been shaped into a form that is meaningful and useful to humans
o
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 and use

Data  Information system  Information

Four activities in an IS produce the information that organizations need:
o
Input: collection of raw data from within the organization or from its external
environment
o
Processing: conversion of raw input into a meaningful form
o
Output: transfer of processed information to the people who will use it or the activities
for which it will be used
o
Feedback: output that is returned to appropriate members of the organization to help
them evaluate or correct the input and processing stages

Difference between computers/computer programs and information systems
o
Computers provide the equipment, computer programs control computer processing
o
Computers and computer programs provide the technical foundation, tools and materials
of modern information systems
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: knowledge of information technology (different!)
Organizations


Business organizations are hierarchies consisting of 3 principal levels who all need ISs
o
Senior management
o
Middle management
o
Operational management
Scientists and knowledge workers often work with middle management
Management

Responsibility for creative work driven by new knowledge and information
Information Technology

Computer hardware: physical equipment used for input, processing and output activities in an IS

Computer software: detailed, pre-programmed instructions that control and coordinate the
computer hardware components in an IS

Data management technology: software governing the organization of data on physical storage
media

Networking and communications technology: both physical devices and software linking the
various pieces of hardware and transfers the data from one physical location to another

Network: links 2 or more computers to share data or resources

Internet: global “network of “networks” that uses universal standards to connect millions of
o
E.g. printer
different networks to users around the world

Intranets: internal corporate networks based on Internet technology

Extranets: private intranets extended to authorized users outside the organization

World Wide Web: service provided by the Internet that uses universally accepted standards for
storing, retrieving, formatting and displaying information in a page format on the Internet
It Is Not Just Technology: A Business Perspective on Information Systems

IS is an important instrument for creating value for the firm

Investments in IT will result in superior returns

o
Increase productivity
o
Increase revenue
o
Superior long-term strategic positioning
Acquire, transform & distribute information so managers can improve decision making, enhance
organizational performance and increase profitability
1.3

Complementary Assets: Organizational Capital and the Right
Business Model
IT cannot make organizations and managers more effective unless they are accompanied by
support values, structures and behaviour patterns in the organization

Complementary assets: assets required to derive value from a primary investment
o
For IT: business models & processes, management behaviour, culture, training, incentive
systems, etc.
1.4
Contemporary Approaches to Information Systems
Sociotechnical Systems

Sociotechnical view: optimal organizational performance is achieved by jointly optimizing both
the social and technical systems used in production (behaviour & technical)
o
Require substantial social, organizational & intellectual investments to make them work
properly

Three primary uses of information systems:
o
Automation
o
Organizational learning  knowledge
o
Achieving strategy  competitive advantage