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Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM Information Systems in Business: Organizations, Management and Networked Enterprise

Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

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Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM. Information Systems in Business: Organizations, Management and Networked Enterprise. Index – Information Systems in Business: Organizations, Management and the Networked Enterprise (1). - PowerPoint PPT Presentation

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Page 1: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

Term 20092010 Week 2 ITU Management FacultyManagement Information SystemsN YILDIRIM

Information Systems in BusinessOrganizations Management andNetworked Enterprise

ITU Management Faculty ndash MIS

Index ndash Information Systems in Business Organizations Management and the Networked Enterprise (1)INTRODUCTION TO INFORMATION SYSTEMS

1 Terminology for Information2 Data3 Valuable Information4 Information System5 Manegement Information Systems6 Role of Information Systems in Change

1 MANAGEMENT INFORMATION SYSTEMS

I) Information Systems in (Global) Business Today 1 Dimensions of and Influences on information systems2 Content of Information Systems3 Interrelations between BIS and Organisation

1 How Businesses Use Information Systems1 Digital Economy Digital Business and Business Models

2 Strategic business objectives of Information systems 2 Information Systems in Organizations and Strategy Making

1 IS Classifications by Functions and Organizational Structures of the Enterprise2 Terminology for Information Systems

3 Information Systems in Social Concept1 Contemporary Approaches2 Information Society3 Trends

ITU Management Faculty ndash MIS

Working with Systems Systems development

The activity of creating or modifying an existing business system

Systems investigation and analysis Defines the problems and opportunities of an existing

system Systems design

Determine how a new system will work to meet business needs

Systems implementation Creating and acquiring system components defined in the

design Systems maintenance and review

Checks and modifies the system so that it continues to meet changing business needs

ITU Management Faculty ndash MIS

System Development LoopSystems

development

Systems

analysis

Systems

design

Systems

implementation

Systems

maintenance

and improvement

Systems

Review And Audit

DEFINING THE PROBLEM Understanding the current system or need for the system ndash Requirements List ldquoContractrdquo What is the Gap

FINDING THE SOLUTION DesigningDefining the ldquoneededrequiredrdquo systemndash Specifications ldquoHow it should berdquo

IMPLEMENTING THE SOLUTION Building Project Hands-on work ldquoClosing the Gaprdquo

PERFORMANCE EVALUATION Control Check ldquoMeasuring the Gaprdquo

Corrective

Actions

Preven

tive Actions

Revisio

nsM

odifications

DocumentationTrainingStructural Change(+Revision)

ITU Management Faculty ndash MIS

System Development ProjectPROJENİN YOumlNTEMİPROJENİN YOumlNTEMİ

İhtiyaccedillarınBelirlenmesi

Tuumlm İlgililerP r o j e İ s t e r l e r

L i s t e s i n i nh a z ı r l a n m a s ı

İhale v e FirmaSeccedilimi

Proje Grubu

G e r e k l iS i s t e m l e r i nK u r u l m a s ı

SistemlerinKurulması

P r o g r a m l a r ı nG e l i ş t i r i l m e s i

A L A R K O d a k ii l g i l i l e r i n

E ğ i t i l m e s i

Firma

İsteklerin Firmayaaccedilıklanması

ProgramlarınKontroluuml testiRaporlanması

Programların veSistemlerin Kontroluuml

ve Son Kabuluuml 1 Y ı l l ı k B a k ı mA n l a ş m a s ı n a

g ouml r e v e r i l e c e kh i z m e t l e r

Pro

je

Oumlnce

siPro

je

Suumlre

ciPro

je

Sonra

Sis

tem

Analizi

Sis

tem

Tasa

rım

ıSis

tem

U

ygula

ma

Sis

tem

K

ontr

ol

Sis

tem

Bakım

ITU Management Faculty ndash MIS

Terminology Data

Streams of raw facts Distinct pieces of information usually formatted in a special way Elementary description of things events activities and transactions that are

recorded classified and stored but not organized to convey any specific meeting

Information Data that has been processed organized and shaped so that they have

meaning use and value to the recipient A collection of facts organized in such a way that they have additional value

beyond the value of the facts themselves Knowledge

Information that has been organized and processed to convey understanding experience and expertise as they apply to a current problem or activity

An awareness and understanding of a set of information and how that information can be made useful to support a specific task

concepts experience and insight that provide a framework for creating evaluating and using information

Knowledge base The collection of data rules procedures and relationships that must be followed

to achieve value or the proper outcome Wisdom

the collective and individual experience of applying knowledge to the solution of problems

ITU Management Faculty ndash MIS

System Development Project

PROBLEMMeasurement

Data

Analysis Knowledge

Decision

Action

First Outcomes

Follow up

Information

Processing

ITU Management Faculty ndash MIS

System Development ProjectPopulation

Census of Population

Each citizen

Calculation of Population GrowthComparing with objectives

High Population Growth

PopPlanning

Public Training

Minor Decrease in Pop

Population RecordsNr Of new TC Ids

PopulationComputing

ITU Management Faculty ndash MIS

Terminology

Process A set of logically related tasks performed to

achieve a defined outcome Process

(n) An executing program The term is used loosely as a synonym of task

(v) To perform some useful operations on data

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 2: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Index ndash Information Systems in Business Organizations Management and the Networked Enterprise (1)INTRODUCTION TO INFORMATION SYSTEMS

1 Terminology for Information2 Data3 Valuable Information4 Information System5 Manegement Information Systems6 Role of Information Systems in Change

1 MANAGEMENT INFORMATION SYSTEMS

I) Information Systems in (Global) Business Today 1 Dimensions of and Influences on information systems2 Content of Information Systems3 Interrelations between BIS and Organisation

1 How Businesses Use Information Systems1 Digital Economy Digital Business and Business Models

2 Strategic business objectives of Information systems 2 Information Systems in Organizations and Strategy Making

1 IS Classifications by Functions and Organizational Structures of the Enterprise2 Terminology for Information Systems

3 Information Systems in Social Concept1 Contemporary Approaches2 Information Society3 Trends

ITU Management Faculty ndash MIS

Working with Systems Systems development

The activity of creating or modifying an existing business system

Systems investigation and analysis Defines the problems and opportunities of an existing

system Systems design

Determine how a new system will work to meet business needs

Systems implementation Creating and acquiring system components defined in the

design Systems maintenance and review

Checks and modifies the system so that it continues to meet changing business needs

ITU Management Faculty ndash MIS

System Development LoopSystems

development

Systems

analysis

Systems

design

Systems

implementation

Systems

maintenance

and improvement

Systems

Review And Audit

DEFINING THE PROBLEM Understanding the current system or need for the system ndash Requirements List ldquoContractrdquo What is the Gap

FINDING THE SOLUTION DesigningDefining the ldquoneededrequiredrdquo systemndash Specifications ldquoHow it should berdquo

IMPLEMENTING THE SOLUTION Building Project Hands-on work ldquoClosing the Gaprdquo

PERFORMANCE EVALUATION Control Check ldquoMeasuring the Gaprdquo

Corrective

Actions

Preven

tive Actions

Revisio

nsM

odifications

DocumentationTrainingStructural Change(+Revision)

ITU Management Faculty ndash MIS

System Development ProjectPROJENİN YOumlNTEMİPROJENİN YOumlNTEMİ

İhtiyaccedillarınBelirlenmesi

Tuumlm İlgililerP r o j e İ s t e r l e r

L i s t e s i n i nh a z ı r l a n m a s ı

İhale v e FirmaSeccedilimi

Proje Grubu

G e r e k l iS i s t e m l e r i nK u r u l m a s ı

SistemlerinKurulması

P r o g r a m l a r ı nG e l i ş t i r i l m e s i

A L A R K O d a k ii l g i l i l e r i n

E ğ i t i l m e s i

Firma

İsteklerin Firmayaaccedilıklanması

ProgramlarınKontroluuml testiRaporlanması

Programların veSistemlerin Kontroluuml

ve Son Kabuluuml 1 Y ı l l ı k B a k ı mA n l a ş m a s ı n a

g ouml r e v e r i l e c e kh i z m e t l e r

Pro

je

Oumlnce

siPro

je

Suumlre

ciPro

je

Sonra

Sis

tem

Analizi

Sis

tem

Tasa

rım

ıSis

tem

U

ygula

ma

Sis

tem

K

ontr

ol

Sis

tem

Bakım

ITU Management Faculty ndash MIS

Terminology Data

Streams of raw facts Distinct pieces of information usually formatted in a special way Elementary description of things events activities and transactions that are

recorded classified and stored but not organized to convey any specific meeting

Information Data that has been processed organized and shaped so that they have

meaning use and value to the recipient A collection of facts organized in such a way that they have additional value

beyond the value of the facts themselves Knowledge

Information that has been organized and processed to convey understanding experience and expertise as they apply to a current problem or activity

An awareness and understanding of a set of information and how that information can be made useful to support a specific task

concepts experience and insight that provide a framework for creating evaluating and using information

Knowledge base The collection of data rules procedures and relationships that must be followed

to achieve value or the proper outcome Wisdom

the collective and individual experience of applying knowledge to the solution of problems

ITU Management Faculty ndash MIS

System Development Project

PROBLEMMeasurement

Data

Analysis Knowledge

Decision

Action

First Outcomes

Follow up

Information

Processing

ITU Management Faculty ndash MIS

System Development ProjectPopulation

Census of Population

Each citizen

Calculation of Population GrowthComparing with objectives

High Population Growth

PopPlanning

Public Training

Minor Decrease in Pop

Population RecordsNr Of new TC Ids

PopulationComputing

ITU Management Faculty ndash MIS

Terminology

Process A set of logically related tasks performed to

achieve a defined outcome Process

(n) An executing program The term is used loosely as a synonym of task

(v) To perform some useful operations on data

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 3: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Working with Systems Systems development

The activity of creating or modifying an existing business system

Systems investigation and analysis Defines the problems and opportunities of an existing

system Systems design

Determine how a new system will work to meet business needs

Systems implementation Creating and acquiring system components defined in the

design Systems maintenance and review

Checks and modifies the system so that it continues to meet changing business needs

ITU Management Faculty ndash MIS

System Development LoopSystems

development

Systems

analysis

Systems

design

Systems

implementation

Systems

maintenance

and improvement

Systems

Review And Audit

DEFINING THE PROBLEM Understanding the current system or need for the system ndash Requirements List ldquoContractrdquo What is the Gap

FINDING THE SOLUTION DesigningDefining the ldquoneededrequiredrdquo systemndash Specifications ldquoHow it should berdquo

IMPLEMENTING THE SOLUTION Building Project Hands-on work ldquoClosing the Gaprdquo

PERFORMANCE EVALUATION Control Check ldquoMeasuring the Gaprdquo

Corrective

Actions

Preven

tive Actions

Revisio

nsM

odifications

DocumentationTrainingStructural Change(+Revision)

ITU Management Faculty ndash MIS

System Development ProjectPROJENİN YOumlNTEMİPROJENİN YOumlNTEMİ

İhtiyaccedillarınBelirlenmesi

Tuumlm İlgililerP r o j e İ s t e r l e r

L i s t e s i n i nh a z ı r l a n m a s ı

İhale v e FirmaSeccedilimi

Proje Grubu

G e r e k l iS i s t e m l e r i nK u r u l m a s ı

SistemlerinKurulması

P r o g r a m l a r ı nG e l i ş t i r i l m e s i

A L A R K O d a k ii l g i l i l e r i n

E ğ i t i l m e s i

Firma

İsteklerin Firmayaaccedilıklanması

ProgramlarınKontroluuml testiRaporlanması

Programların veSistemlerin Kontroluuml

ve Son Kabuluuml 1 Y ı l l ı k B a k ı mA n l a ş m a s ı n a

g ouml r e v e r i l e c e kh i z m e t l e r

Pro

je

Oumlnce

siPro

je

Suumlre

ciPro

je

Sonra

Sis

tem

Analizi

Sis

tem

Tasa

rım

ıSis

tem

U

ygula

ma

Sis

tem

K

ontr

ol

Sis

tem

Bakım

ITU Management Faculty ndash MIS

Terminology Data

Streams of raw facts Distinct pieces of information usually formatted in a special way Elementary description of things events activities and transactions that are

recorded classified and stored but not organized to convey any specific meeting

Information Data that has been processed organized and shaped so that they have

meaning use and value to the recipient A collection of facts organized in such a way that they have additional value

beyond the value of the facts themselves Knowledge

Information that has been organized and processed to convey understanding experience and expertise as they apply to a current problem or activity

An awareness and understanding of a set of information and how that information can be made useful to support a specific task

concepts experience and insight that provide a framework for creating evaluating and using information

Knowledge base The collection of data rules procedures and relationships that must be followed

to achieve value or the proper outcome Wisdom

the collective and individual experience of applying knowledge to the solution of problems

ITU Management Faculty ndash MIS

System Development Project

PROBLEMMeasurement

Data

Analysis Knowledge

Decision

Action

First Outcomes

Follow up

Information

Processing

ITU Management Faculty ndash MIS

System Development ProjectPopulation

Census of Population

Each citizen

Calculation of Population GrowthComparing with objectives

High Population Growth

PopPlanning

Public Training

Minor Decrease in Pop

Population RecordsNr Of new TC Ids

PopulationComputing

ITU Management Faculty ndash MIS

Terminology

Process A set of logically related tasks performed to

achieve a defined outcome Process

(n) An executing program The term is used loosely as a synonym of task

(v) To perform some useful operations on data

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 4: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

System Development LoopSystems

development

Systems

analysis

Systems

design

Systems

implementation

Systems

maintenance

and improvement

Systems

Review And Audit

DEFINING THE PROBLEM Understanding the current system or need for the system ndash Requirements List ldquoContractrdquo What is the Gap

FINDING THE SOLUTION DesigningDefining the ldquoneededrequiredrdquo systemndash Specifications ldquoHow it should berdquo

IMPLEMENTING THE SOLUTION Building Project Hands-on work ldquoClosing the Gaprdquo

PERFORMANCE EVALUATION Control Check ldquoMeasuring the Gaprdquo

Corrective

Actions

Preven

tive Actions

Revisio

nsM

odifications

DocumentationTrainingStructural Change(+Revision)

ITU Management Faculty ndash MIS

System Development ProjectPROJENİN YOumlNTEMİPROJENİN YOumlNTEMİ

İhtiyaccedillarınBelirlenmesi

Tuumlm İlgililerP r o j e İ s t e r l e r

L i s t e s i n i nh a z ı r l a n m a s ı

İhale v e FirmaSeccedilimi

Proje Grubu

G e r e k l iS i s t e m l e r i nK u r u l m a s ı

SistemlerinKurulması

P r o g r a m l a r ı nG e l i ş t i r i l m e s i

A L A R K O d a k ii l g i l i l e r i n

E ğ i t i l m e s i

Firma

İsteklerin Firmayaaccedilıklanması

ProgramlarınKontroluuml testiRaporlanması

Programların veSistemlerin Kontroluuml

ve Son Kabuluuml 1 Y ı l l ı k B a k ı mA n l a ş m a s ı n a

g ouml r e v e r i l e c e kh i z m e t l e r

Pro

je

Oumlnce

siPro

je

Suumlre

ciPro

je

Sonra

Sis

tem

Analizi

Sis

tem

Tasa

rım

ıSis

tem

U

ygula

ma

Sis

tem

K

ontr

ol

Sis

tem

Bakım

ITU Management Faculty ndash MIS

Terminology Data

Streams of raw facts Distinct pieces of information usually formatted in a special way Elementary description of things events activities and transactions that are

recorded classified and stored but not organized to convey any specific meeting

Information Data that has been processed organized and shaped so that they have

meaning use and value to the recipient A collection of facts organized in such a way that they have additional value

beyond the value of the facts themselves Knowledge

Information that has been organized and processed to convey understanding experience and expertise as they apply to a current problem or activity

An awareness and understanding of a set of information and how that information can be made useful to support a specific task

concepts experience and insight that provide a framework for creating evaluating and using information

Knowledge base The collection of data rules procedures and relationships that must be followed

to achieve value or the proper outcome Wisdom

the collective and individual experience of applying knowledge to the solution of problems

ITU Management Faculty ndash MIS

System Development Project

PROBLEMMeasurement

Data

Analysis Knowledge

Decision

Action

First Outcomes

Follow up

Information

Processing

ITU Management Faculty ndash MIS

System Development ProjectPopulation

Census of Population

Each citizen

Calculation of Population GrowthComparing with objectives

High Population Growth

PopPlanning

Public Training

Minor Decrease in Pop

Population RecordsNr Of new TC Ids

PopulationComputing

ITU Management Faculty ndash MIS

Terminology

Process A set of logically related tasks performed to

achieve a defined outcome Process

(n) An executing program The term is used loosely as a synonym of task

(v) To perform some useful operations on data

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 5: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

System Development ProjectPROJENİN YOumlNTEMİPROJENİN YOumlNTEMİ

İhtiyaccedillarınBelirlenmesi

Tuumlm İlgililerP r o j e İ s t e r l e r

L i s t e s i n i nh a z ı r l a n m a s ı

İhale v e FirmaSeccedilimi

Proje Grubu

G e r e k l iS i s t e m l e r i nK u r u l m a s ı

SistemlerinKurulması

P r o g r a m l a r ı nG e l i ş t i r i l m e s i

A L A R K O d a k ii l g i l i l e r i n

E ğ i t i l m e s i

Firma

İsteklerin Firmayaaccedilıklanması

ProgramlarınKontroluuml testiRaporlanması

Programların veSistemlerin Kontroluuml

ve Son Kabuluuml 1 Y ı l l ı k B a k ı mA n l a ş m a s ı n a

g ouml r e v e r i l e c e kh i z m e t l e r

Pro

je

Oumlnce

siPro

je

Suumlre

ciPro

je

Sonra

Sis

tem

Analizi

Sis

tem

Tasa

rım

ıSis

tem

U

ygula

ma

Sis

tem

K

ontr

ol

Sis

tem

Bakım

ITU Management Faculty ndash MIS

Terminology Data

Streams of raw facts Distinct pieces of information usually formatted in a special way Elementary description of things events activities and transactions that are

recorded classified and stored but not organized to convey any specific meeting

Information Data that has been processed organized and shaped so that they have

meaning use and value to the recipient A collection of facts organized in such a way that they have additional value

beyond the value of the facts themselves Knowledge

Information that has been organized and processed to convey understanding experience and expertise as they apply to a current problem or activity

An awareness and understanding of a set of information and how that information can be made useful to support a specific task

concepts experience and insight that provide a framework for creating evaluating and using information

Knowledge base The collection of data rules procedures and relationships that must be followed

to achieve value or the proper outcome Wisdom

the collective and individual experience of applying knowledge to the solution of problems

ITU Management Faculty ndash MIS

System Development Project

PROBLEMMeasurement

Data

Analysis Knowledge

Decision

Action

First Outcomes

Follow up

Information

Processing

ITU Management Faculty ndash MIS

System Development ProjectPopulation

Census of Population

Each citizen

Calculation of Population GrowthComparing with objectives

High Population Growth

PopPlanning

Public Training

Minor Decrease in Pop

Population RecordsNr Of new TC Ids

PopulationComputing

ITU Management Faculty ndash MIS

Terminology

Process A set of logically related tasks performed to

achieve a defined outcome Process

(n) An executing program The term is used loosely as a synonym of task

(v) To perform some useful operations on data

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 6: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Terminology Data

Streams of raw facts Distinct pieces of information usually formatted in a special way Elementary description of things events activities and transactions that are

recorded classified and stored but not organized to convey any specific meeting

Information Data that has been processed organized and shaped so that they have

meaning use and value to the recipient A collection of facts organized in such a way that they have additional value

beyond the value of the facts themselves Knowledge

Information that has been organized and processed to convey understanding experience and expertise as they apply to a current problem or activity

An awareness and understanding of a set of information and how that information can be made useful to support a specific task

concepts experience and insight that provide a framework for creating evaluating and using information

Knowledge base The collection of data rules procedures and relationships that must be followed

to achieve value or the proper outcome Wisdom

the collective and individual experience of applying knowledge to the solution of problems

ITU Management Faculty ndash MIS

System Development Project

PROBLEMMeasurement

Data

Analysis Knowledge

Decision

Action

First Outcomes

Follow up

Information

Processing

ITU Management Faculty ndash MIS

System Development ProjectPopulation

Census of Population

Each citizen

Calculation of Population GrowthComparing with objectives

High Population Growth

PopPlanning

Public Training

Minor Decrease in Pop

Population RecordsNr Of new TC Ids

PopulationComputing

ITU Management Faculty ndash MIS

Terminology

Process A set of logically related tasks performed to

achieve a defined outcome Process

(n) An executing program The term is used loosely as a synonym of task

(v) To perform some useful operations on data

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 7: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

System Development Project

PROBLEMMeasurement

Data

Analysis Knowledge

Decision

Action

First Outcomes

Follow up

Information

Processing

ITU Management Faculty ndash MIS

System Development ProjectPopulation

Census of Population

Each citizen

Calculation of Population GrowthComparing with objectives

High Population Growth

PopPlanning

Public Training

Minor Decrease in Pop

Population RecordsNr Of new TC Ids

PopulationComputing

ITU Management Faculty ndash MIS

Terminology

Process A set of logically related tasks performed to

achieve a defined outcome Process

(n) An executing program The term is used loosely as a synonym of task

(v) To perform some useful operations on data

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 8: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

System Development ProjectPopulation

Census of Population

Each citizen

Calculation of Population GrowthComparing with objectives

High Population Growth

PopPlanning

Public Training

Minor Decrease in Pop

Population RecordsNr Of new TC Ids

PopulationComputing

ITU Management Faculty ndash MIS

Terminology

Process A set of logically related tasks performed to

achieve a defined outcome Process

(n) An executing program The term is used loosely as a synonym of task

(v) To perform some useful operations on data

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 9: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Terminology

Process A set of logically related tasks performed to

achieve a defined outcome Process

(n) An executing program The term is used loosely as a synonym of task

(v) To perform some useful operations on data

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 10: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information Technology

Definition the hardware and software a business

uses to achieve its objectives any machine technology that is controlled

by or uses information for operationExample a programmable industrial robot receiving instructions from a computer-based database

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 11: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information Systems Components Data

InformationSystems

InformationSystems

HardwareHardware TelecommunicationsTelecommunications

PeoplePeopleDataData

SoftwareSoftware

bull The raw inputs for entry into information systems

bull Organized processed and stored by an IS to support user information needs

bull Provides basis for qualitativequantitative analysis

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 12: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

ldquoDatardquo as an Information System Component

(1) Distinct pieces of information usually formatted in a special way All software is divided into two general categories data and programs Programs are collections of instructions for manipulating data

Data can exist in a variety of forms -- as numbers or text on pieces of paper as bits and bytes stored in electronic memory or as facts stored in a persons mind

Data is the plural of datum a single piece of information In practice however people use data as both the singular and plural form of the word

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 13: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information

Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data)

(3) In database management systems data files are the files that store the database information whereas other files such as index files and data dictionaries store administrative information known as metadata

ldquoDatardquo as an Information System Component

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 14: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Types of Data

Data Represented by

Alphanumeric data Numbers letters and other characters

Image data Graphic images or pictures

Audio data Sound noise tones

Video data Moving images or pictures

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 15: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

Raw Facts Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 16: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Characteristics of Valuable Information

Characteristics Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 17: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information System ndash Definition and Purpose

An information system consists of components that support decision making and control and help with analysis visualization and product creation

An information system (IS) collects processes stores analyzes and disseminates information for a specific purpose ldquoApplicationrdquo

Or Collects data processes it into information then converts information into knowledge for a specific purpose

A set of interrelated elements or components that collect (input) manipulate (process) and disseminate (output) data and information and provide a feedback mechanism to meet an objective

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 18: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information Systems

- A combination of technical components - Built and used by people to collect create and

distribute useful data - Used typically in organizational settings but are evolving

for personal use

Procedures

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 19: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

What is an Information System An information system (IS) collects processes stores analyzes and

disseminates information for a specific purpose Like any other system an information system includes inputs (data

instructions) and outputs (reports calculations) It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation

Input Processing Output

Feedback

Model of an information system

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 20: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information System Is A System

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 21: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Input Processing Output

Input The activity of gathering and capturing data Whatever goes into the computer

Processing Converting or transforming data into useful outputs

Output Useful information usually in the form of

documents andor reports Anything that comes out of a computer

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 22: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Input

(n) Whatever goes into the computer Input can take a variety of forms from commands you enter on a keyboard to data from another computer or device A device that feeds data into a computer such as a keyboard or mouse is called an input device

(v) The act of entering data into a computer

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 23: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Output

(n) Anything that comes out of a computer Output can be meaningful information or gibberish and it can appear in a variety of forms -- as binary numbers as characters as pictures and as printed pages Output devices include display screens loudspeakers and printers

(v) To give out For example display screens output images printers output print and loudspeakers output sounds

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 24: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Feedback

Feedback Output that is used to make changes to

input or processing activities Feedforward

A proactive approach to feedback Use for estimating future sales or inventory

needs

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 25: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Data Information

Data InformationTransformation

InformationSystem

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory

331 Coca Cola 1lt 145521 Lipton Ice Tea 1lt 120332 Rodeo Bar 40gr 040185 Vernel 3lt 525

Sales Region Atasehir Store BIMItem No Description Units Sold 331 Coca Cola 1lt 1

Raw Facts

Processed Shaped meaningful data

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 26: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Management Information Systems MIS is an organized collection of

People Processes Hardware - Devices Software DatabasesThat are used to provide ldquoinformationrdquo to decision makers in all levels

The vast majority of information systems are developed for and used by people in functional areas (eg manufacturing human resources accounting finance and marketing)

To develop information systems that address the needs of the organization MIS professionals must possess a solid mix of business and technical knowledge They must understand

organizational structures objectives operations (including processes and the flows of data between processes) and the financial implications related to these factors

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 27: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information Systems Turn Data into Information

bull Raw materialbull Unformatted informationbull Generally has no context

bull Processed materialbull Formatted informationbull Data given context

ORGANIZATION

ENVIRONMENTSuppliers Customers

FEEDBACK

Stockholders Competitors

Data

Information

ClassifyArrange Calculate

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 28: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Dimensions of information systems

Organizationsndash The key elements of an organization are its People Structure Business processes Politics Culture

1048707 Management 1048707 Technology

It isnrsquot just a technology A Business perspective on information systems

Complementary assets Organizational capital and the right business

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 29: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Computer Based Information System

Hardware Software DataBases NetworkTelecom Procedures People

Hardware

Software

PeopleDataApplicationApplication

More than hardware and software More than hardware and software Together they are configured to collect manipulate store and process data into information

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 30: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

Using information systems effectively requires an understanding of the organization management and information technology shaping the systems

An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 31: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Influences on Information System IS on the core ndash Building the Links

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 32: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Content of Information System Widening Scope and Evolution of Information

Systems

There is a growing interdependence between a firmrsquos 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

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 33: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Content of Information Systems A Business Perspective on Information

Systems ndash The business Information Value Chain

Supply Chain Management

Enterprise Management

CustomerManagement

KnowledgeManagement

Business Processes

Management ActivitiesInformation Processing Activities

DisseminationTransformationInto Business

Systems

Data Collection and Storage

Planning Coordinating Controlling Modelling and Decision Making

Business Value

Firm Profitability

And StrategicPosition

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 34: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Content of Information Systems ndash Extended Enterprise As IT continue to deploy multiple complex mobile and

distributed systems the processing and managing of information in enterprises becomes costly and complicated

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 35: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Business Information Systems The interactive relationships between the information

systems and organizations both technically and socially and the business opportunities and challenges brought about by the BIS

This describes information systems used to support the functional areas of business

ldquo Since the advent of the mainframe in the 1950s companies have dreamed of ldquousing computers to manage their businessesrdquo But early efforts came up short with technology that was too costly or too clunky Now thanks to the Net and dashboards those dreams are starting to come true Forrester Research Inc estimates that 40 of the 2000 largest companies use the technologyrdquo

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 36: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

Impact of Information Systems on Organizations

Economic impacts

Organizational and behavioral impacts

IT flattens organizations Postindustrial organizations Understanding organizational

resistance to change

The Internet and organizations

Implications for the design and understanding of information systems

Mediating FactorsMediating FactorsEnvironment

CultureStructure

Business ProcessesPolitics

MANAGEMENT DECISIONS

This complex two-way relationship is mediated by many factors

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 37: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Interrelations between BIS and Organisation

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASDATABASEE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 38: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Digital Economy ndash ldquoNewrdquo Economy

E-Business The use of electronic technologies to transact business

Collaboration People and Organizations interact communicate collaborate and search for information

Information Exchange Storing processing and transmission of information

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 39: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Digital Business

Your DomainURL

Internet

POS

Appliance ServerStore 3

PCThin Client

Appliance

On-line Multi-station Store

Net Appliance

Store 1

On-lineSingle-station Store

On-line CustomersConsumer amp Business

Commercial

E-commerce

Hub

AccountingPhone OrdersMail Orders

Order Fulfillment

STARS

Thin ClientThin Client

In-house operations

PCPC

PC

Purchasing

On-line Salesperson

Linux Credit Card Approval

Apache Server

Cold Fusion

Sybase ASE Database

Linux SSL

Apache Server

Beacon Hills Stars

Tarentella

SCO UnixLinuxUnix

Business to BusinessServer

E-Commerce Server

Windows 2000

Offi ce Suite Video Conferencing

Server

IP Address 1

IP Address 2

IP Address 3

STARS

Networks

Internet

Telecommunications

Consumer

In-office

Field Sales

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 40: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

The Old Economy ndash Taking Photorsquos

1 Buy film in a store

2 Load your camera

3 Take pictures

4 Take roll of film to store for processing

5 Pickup the film when ready

6 Select specific photos for enlargement

7 Mail to family and friends

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 41: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

The New Economy ndash Taking Photorsquos

1st Generation Digital Photography Old economy except 6 and 7 were replaced by

using a scanner and emailing

2nd Generation Digital Photography Use a Digital Camera no film no processing

3rd Generation Digital Photography Your Digital Camera is now your mobile phone in

your binoculars or a palmtop computer

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 42: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself The model spells out how the company adds value to create a product or service (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting Its survival depends

on a complex model involving advertisers and content providers

Internet portals such as Yahoo also use a complex business model

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 43: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Digital Age Business Models

Name-Your-Own Price

Reverse Auctions

Affiliate Marketing

E-Marketplaces and Exchanges

Electronic aggregation (buying groups)

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 44: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Drivers Forcing Changes In Business Models

Environmental organizational and technological factors are creating a highly competitive business environment these factors or forces can change quickly sometimes in an unpredictable manner

Therefore companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence an initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions

Business Pressures

Business Critical Response Activities

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 45: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Business Pressures on an Organization that force change

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 46: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

IT ndash enabled Organizational Responses to Business Pressures

Strategic Management amp Systems Continuous Improvement ndash

Operational Efficiency Restructuring business processes Manufacturer to order Mass-

Customization Customer Focus Strategy Electronic business Business Alliances

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 47: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Operational excellence Achieve operational excellence through higher levels of efficiency and productivityNew products services and business models Create new products services and business models Customer and supplier intimacy Raise revenue and profits while lowering costs by increasing customer and supplier intimacyImproved decision making Improve decision making for managers and employees Competitive advantage Increase competitive advantages Survival Insure survival caused by business environment changes

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 48: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Operational excellence

Achieve operational excellence through higher levels of efficiency and productivity

Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity

Case Study Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiencymdashand $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 49: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives of information systemsOperational excellence Case Study Wal-Mart

It is all-purpose chain store all around America They sell many products such as electronics movies music books toys jewelry sporting goods home appliances garden and patio accessories video games apparel gifts pharmacy and home craftfurniture uses on time shipments They donrsquot keep high inventory in their back rooms saving on storage When inventory in the store starts running out the system notifies them to order more stock Another business process that they use is sales They save money with their inventory faster customer service using self check and eliminating baggers saves on labor cost Technology also helps the cashiering with better computer systems there will be fewer errors

The Information Systems Division (ISD) supports the worldrsquos largest non-governmental database

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 50: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

New products services and business models

Create new products services and business models

Information systems and technologies enable firms to create new products services and business models A business model includes how a company produces delivers and sells its products and services

Case Studies The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 51: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

New products services and business models Case Study - Apple

Apple has been very successful at introducing new products and adopting a new business model Strong presence of networks Launched its online store on 2003 Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content by Apple providing the hardware to use the content as well as the content itselfApple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 52: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy

Raise revenue and profits while lowering costs by increasing customer and supplier intimacy

Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs

Case Studies The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 53: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Customer and supplier intimacy- Case Study The Mandarin Oriental in Manhattandeployed Hotel Service Optimization System (HotSOS) to automate workflow and communications wirelessly connect service staff to each other guests groups and meeting planners for unmatched personalized prompt service HotSOS is helping the hotel keep everyone in the loop in real time so service levels consistently can exceed the expectations of guests

ldquo Before HotSOS when our occupancies were high say 90-percent-plus it would take us more than six minutes to respond to a guest request and deliver on their needs With HotSOS a bellman or front desk staff can instantly easily submit a service request to a department and all related managers based on customized business rules and within minutes we have the guest request and notify all in the loop Number of requests taking more than six minutes to fulfill has dropped 75 This means more-loyal customers more of their precious repeat business and referrals

Reading wwwhillsidecomtr

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 54: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

Improved decision making

Improve decision making for managers and employees

A companyrsquos bottom line can be hurt by managers being swamped with data that are neither timely nor helpful forcing them to use guesswork Real-time data have improved the ability of managers to make decisions

Case Studies Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints network performance and line outages

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 55: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives of information systems Improved decision making Case Study- Verizon one of the worldrsquos leading providers of communications services Verizonrsquos domestic wireline telecommunications business provides local telephone services including broadband in 28 states and nationwide long-distance and other communications products and services Verizon Wireless provides wireless voice and data products and services across USA Information Services operates directory publishing and electronic commerce services Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance It also offers a Web-based service allowing customers to decide which calls are routed to specific phones

Reading httpwwwbusinessweekcommagazinecontent06_07b3971083htm

The dashboard puts me and more and more of our

executives in real-time touch with the business The

more eyes that see the results were obtaining every day

the higher the quality of the decisions we can make Ivan Seidenberg _ Verizon CEO

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 56: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Competitive advantage

Increase competitive advantages

Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products better performance and better response to suppliers and customers

Case Studies Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 57: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

Survival

Insure survival caused by business environment changes

Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations

Case Studies Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 58: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives ofinformation systems

TOYOTA CASE

Problem Tough competition and demanding customers

Solutions bull Redesigned order and production processes reduce costs increase revenue and improve customer service

bullE-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately

bull Demonstrates ITrsquos role in analyzing market trends and monitoring quality efficiency and costs

bull Illustrates the emerging digital firm landscape wherebusinesses can use tools to analyze critical data

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 59: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

Reading An Evaluation of Toyota Motor Company (TMC) Information Systems Ryan Morris

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 60: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Strategic business objectives of information systems

TOYOTA CASE

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 61: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information Technology Capital Investment

Between 1980 and 2004 IT investment (hardware inv+ software inv+ communications equipment inv) grew from 34 to 50 in USAIn 2008 ---------- (Explore And Analyze)

Source Based on data in US Department of Commerce Bureau of Economic Analysis National Income and Product Accounts 2006

34

50

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 62: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

The emerging digital firmELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers - suppliers - employees are enabled and key corporate assets are managed digitally

bull Information system links all parties to exchange information products services payments

bull Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations

bull Key corporate assets mdash intellectual property core competencies and financial and human assets mdash are managed through digital means

bull Internal and external environments are quickly recognized and dealt with

bull Information technology is the ldquocore of the businessrdquo and ldquothe primary management toolrdquo

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 63: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information System ndash Classification By Organizational Structure

Departmental IS Enterprise-Wide IS Inter-Organizational IS

An information system (IS) can span departments business units and corporations

Information systems are usually connected by means of electronic networks

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 64: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information System Classification By Organizational

Structure

The various types of systems in the organization have interdependencies

TPS are major producers of information that is required by many other systems in the firm which in turn produce information for other systems These different types of systems are loosely coupled in most business firms but increasingly firms are using new technologies to integrate information that resides in many different systems

BUSINESSINTELLIGENCE

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 65: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 66: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

An information system (IS) support each department in a corporation

Information System - Classification By Function (Department)

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 67: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

MarketingMarketingbull Identify customersbull Determine what they

wantbull Planning productsbull Advertising and

promoting productsbull Determine prices for

products

Information System - Classification By Functional Perspectives

Salesbull Contact customersbull Sell the productbull Take the orderbull Follow-up on the salebull 5 year sales forecast

Manufacturingbull Control Equipment and machinerybull Design new productsbull When and quantity of products to

producebull New production facilitiesbull Generate the work order

Purchasingbull Which vendorsbull Quantity to purchasebull Coop rebate trackingbull Handle delivery

discrepanciesbull Generate the

purchase order

Accountingbull Accounts Receivablebull Disbursementsbull Payrollbull Depreciationbull Earned Coop and

Rebates

Financebull Financial Assetsbull Investment

managementbull Bankingbull Long term budgets

Human Resourcesbull Employee wages

salaries amp benefitsbull Long term labor

requirementsbull Tracking vacation

sick bull Track employee skillsbull Interview and review

employees

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 68: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information System -

Classification By Support Function

Operational Managers

Data Workers

Middle Managers

Senior MgrExecutive Support SystemExecutive Support System

Management Information SystemManagement Information System

Decision Support SystemDecision Support System

Intelligent Support SystemsIntelligent Support Systems

Knowledge Management SystemKnowledge Management System

Office Automation SystemOffice Automation System

Transaction Processing SystemTransaction Processing System

bull5-year sales trendbullProfit Planningbull5-year budget forecastingbullProduct development

bullSales ManagementbullInventory ControlbullAnnual budgetbullProduction SchedulingbullCost AnalysisbullPricing Analysis

bullSimulationbullPgm codingbullSystem supportbullWord ProcessingbullDesktop Publishing

bullOrder ProcessingbullFulfillmentbullMaterial MovementbullAR AP GLbullPayrollbullPOS

Strategic Level

Management Level

Knowledge Level

Operational Level

W o r k e r s

Bu

sin

ess

Inte

llig

ence

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 69: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information System - Classification By Function (Department)

Operations Accounting Finance Marketing Human resources

An information system (IS) support each department in a corporation

Transaction Processing Systems (TPS) Automates routine and repetitive tasks that are critical to the operation of the organization

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 70: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

From Information Technology to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 71: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 72: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Contemporary Approaches to Information Systems

Sociotechnical systems Information systems and the use of technology

belong to everyone in an organization

This concept is best carried out through a sociotechnical approach to viewing information systems which allows both the technical and behavioral approaches to be combined for the good of the organization

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 73: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

Knowledge Society (Drucker - 1959)bull Term invented to describe the next evolution of societybull This evolution would be a result of the rise in the numbers

and importance of knowledge workers in societybull Education was described as the cornerstone of the

knowledge society as it is core to the knowledge workerbull Drucker was right again

1960 2000Information Society

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 74: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

IS Role in Change Trends and Terms Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Downsizing (Sometimes called Rightsizing)bull Reducing organizational headcount to meet the financial goals of the organization

bull IT is viewed as the lever to provide the systems necessary to increase productivity

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

Outsourcingbull Transferring business functions outside the organization to increase service levels andor reduce operating cost

bull IT is not immune to this trend Certain commodity IT technical jobs will be increasingly transferred overseas

bull IT must find better methods to manage offshore work

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 75: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information Society Evolution Periods of Change

Agricultural Industrial

(Prior to 1890rsquos) (1890rsquos to 1960rsquos)

Informational

(1960rsquos to Present)

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 76: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

Knowledge Worker (Peter Drucker 1959)bull A term invented to describe a future trend in the workforcebull These will be professionals that create modify andor

synthesize information as a fundamental part of their job bull They will require higher education levels and received higher

compensation than workers in agriculture or manufacturingbull The term is still generally accepted today (Drucker was right)

1960 2000Information Society

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 77: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Information Society Evolution Terms and Issues

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

New Economy (Wired Magazine - Late 1990s)bull Similar to ldquoknowledge societyrdquo but more descriptivebull Describes a society where people use their brains more

than their hands in their work and personal lives bull Where communications technology and other IT systems

will create global competition for all products and servicesbull Other names Digital Economy Network Era Internet Era

1960 2000

Information Society

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 78: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

The New Economy (NE) Social Perspectives

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 1 Sims ndashTaylorbull The new economy creates risks for Knowledge Workersbull Knowledge workers will be the first to be replaced by

automation with information technology

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 2 Rikfinbull The overreliance on information technology has

caused society to act hastily (excess rapidity)bull The result has been a loss of perspective

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

Perspective 3 THE DIGITAL DIVIDEbull Those with access to information technology have

great advantages over those that donrsquotbull IT access will further polarize society

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 79: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Trends in Technology Cost-performance ratio of chips keeps improving Moorersquos

Law his prediction was that the processing power of silicon chips would double every 18 months

Several new devices and methods to increase storage capacity price performance

Object-oriented programming technology enables the development of self-contained units of software that can be shared

Networked and distributed computing is emerging rapidly (Metcalfersquos Law)

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 80: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Trends in Technology

Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 81: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Trends in Technology

The Network Computer Optical Networks Storage Area Networks Intranets amp Extranets The Internet

The Networked EnterpriseThe Networked Enterprise

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip

Page 82: Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

ITU Management Faculty ndash MIS

Article Readings and Case Studies

An Evaluation of Toyota Motor Company IS Politics of the Future ndash How the Internet is changing and will

change politics forever How Obamarsquos Internet Campaign changed Politics (NY

Times) (httpwwwbarackobamacom Obama Everywhere) How Information Technology is Revolutionizing the Field of

Medicine Nestle Struggles with Enterprise Systems

Please read and comment on ldquoanyrdquo of these cases To be discussed in Week 3 opening sessionhellip