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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
Citation preview
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
sı
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
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
sı
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
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
sı
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
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
sı
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
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
sı
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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