management information systems: chapter 1

Complementary assets:

-Assets required to derive value from a primary investment -Firms supporting technology investments with investment in complementary assets receive superior returns -E.g.: invest in technology and the people to make it work properly

Behavioral approach to information systems:

-Behavioral issues (strategic business integration, implementation, etc.) -Psychology, economics, sociology

Business perspective:

-Calls attention to organizational and managerial nature of information systems

Management Information Systems

Combines computer science, management science, operations research and practical orientation with behavioral issues

Business model:

describes how company produces, delivers, and sells product or service to create wealth

new products, services, and business models are:

enabled by technology.

Technology dimension of information systems

-Computer hardware and software -Data management technology -Networking and telecommunications technology -Networks, the Internet, intranets and extranets, World Wide Web -IT infrastructure: provides platform that system is built on

Information vs. data

-Data are streams of raw facts -Information is data shaped into meaningful form

Competitive advantage

-Delivering better performance -Charging less for superior products -Responding to customers and suppliers in real time -Examples: Apple, Walmart, UPS

Technical approach to information systems:

-Emphasizes mathematically based models -Computer science, management science, operations research

Organizational dimension of information systems

-Hierarchy of authority, responsibility 1.Senior management 2.Middle management 3.Operational management 4.Knowledge workers 5.Data workers 6.Production or service workers

Operational excellence:

-Improvement of efficiency to attain higher profitability -Information systems, technology an important tool in achieving greater efficiency and productivity -Walmart's RetailLink system links suppliers to stores for superior replenishment system

How information systems are transforming business:

-Increase in wireless technology use, Web sites -Increased business use of Web 2.0 technologies -Cloud computing, mobile digital platform allow more distributed work, decision-making, and collaboration

Business perspective on information systems:

-Information system is instrument for creating value -Investments in information technology will result in superior returns: -Productivity increases -Revenue increases -Superior long-term strategic positioning

Survival

-Information technologies as necessity of business -May be: -Industry-level changes, e.g. Citibank's introduction of ATMs -Governmental regulations requiring record-keeping -Examples: Toxic Substances Control Act, Sarbanes-Oxley Act

Globalization opportunities:

-Internet has drastically reduced costs of operating on global scale -Presents both challenges and opportunities

Perspectives on information systems:

-Investing in information technology does not guarantee good returns -Considerable variation in the returns firms receive from systems investments Factors: -Adopting the right business model -Investing in complementary assets (organizational and management capital)

management dimension of information systems

-Managers set organizational strategy for responding to business challenges -In addition, managers must act creatively: -Creation of new products and services -Occasionally re-creating the organization

Sociotechnical view

-Optimal organizational performance achieved by jointly optimizing both social and technical systems used in production -Helps avoid purely technological approach

Dimensions of UPS tracking system

-Organizational: -Procedures for tracking packages and managing inventory and provide information -Management: -Monitor service levels and costs -Technology: -Handheld computers, bar-code scanners, networks, desktop computers, etc.

Business information value chain:

-Raw data acquired and transformed through stages that add value to that information -Value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits

organizational dimensions of information systems (cont.)

-Separation of business functions -Sales and marketing -Human resources -Finance and accounting -Manufacturing and production -Unique business processes -Unique business culture -Organizational politics

Customer and supplier intimacy:

-Serving customers raises revenues and profits -Better communication with suppliers lowers costs

Information system:

-Set of interrelated components -Collect, process, store, and distribute information -Support decision making, coordination, and control

In the emerging, fully digital firm:

-Significant business relationships are digitally enabled and mediated -Core business processes are accomplished through digital networks -Key corporate assets are managed digitally

four main actors of information systems:

-Suppliers of hardware and software -Business firms -Managers and employees -Firm's environment (legal, social, cultural context)

Customer and supplier intimacy can:

-lead to customers returning, which raises revenues and profits. -allow suppliers to provide vital inputs, which lower costs.

Without accurate information:

-managers must use forecasts, best guesses, and luck, which leads to overproduction, underproduction, misallocation of resources, and poor response times.

Three activities of information systems produce information organizations need:

1)Input: Captures raw data from organization or external environment 2)Processing: Converts raw data into meaningful form 3)Output: Transfers processed information to people or activities that use it

Business firms invest heavily in information systems to achieve six strategic business objectives:

1)Operational excellence 2)New products, services, and business models 3)Customer and supplier intimacy 4)Improved decision making 5)Competitive advantage 6)Survival

levels in a firm

1. senior management 2. middle management (scientists and knowledge workers) 3. operational management (production and service workers and data workers)

Improved decision making:

More accurate data leads to better decisions.

Complementary assets include:

Organizational assets, e.g. -Appropriate business model -Efficient business processes Managerial assets, e.g. -Incentives for management innovation -Teamwork and collaborative work environments Social assets, e.g. -The Internet and telecommunications infrastructure -Technology standards

Feedback:

Output returned to appropriate members of organization to help evaluate or correct input stage

Digital firms offer greater flexibility in organization and management in regards to:

Time shifting and space shifting

Operational excellence is:

improvement of efficiency to attain higher profitability.