Chapter 1 Transforming Business And Management
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Chapter
1
The Information Systems Revolution: Transforming Business and Management
Chapter 1 OBJECTIVES
• What is the role of information systems in today’s competitive business environment? • What exactly is an information system? What do managers need to know about information systems? • How are information systems transforming organizations and management?
Chapter 1 OBJECTIVES
• How has the Internet and Internet technology transformed business? • What are the major management challenges to building and using information systems?
Chapter 1 MANAGEMENT CHALLENGES
1. Design competitive and effective systems 2. Understand system requirements of global business environment 3. Create information architecture that supports organization’s goal
Chapter 1 MANAGEMENT CHALLENGES
4. Determine business value of information systems 5. Design systems people can control, understand and use in a socially, ethically responsible manner
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Four powerful worldwide changes that have altered the business environment: 3. 4. 5. 6.
Emergence of the Global Economy Transformation of Industrial Economies Transformation of the Business Enterprise The Emerging Digital Firm
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Emergence of the Global Economy (1) • • •
Many countries in Asia and Europe are depends on imports and exports Success of a firm is depends on their ability to operate globally Globalization of the world’s industrial economies enhances the value of information to firm, therefore they required a powerful IS like Internet – Values of communications: to control trade with distributors and suppliers, control global corporation, operate 24 hours a day worldwide
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Emergence of the Global Economy (2) •
Globalization has cause a stiff competition for local business. –
Customer has more choices and ways to buy products, can shop 24 hours a day, information is more available at anytime
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Transformation of Industrial Economies • Transform to knowledge- and informationbased economies lead to knowledge- and information-intense products – •
•
Products that requires a great deals of learning and knowledge to produce, i.e. computer games Information technology has contribute to increase productivity (computerised factory machines), new products and services (credit card, faster delivery, worldwide reservation system) IS is needed to smoothen the flow of information to maximize the used of company resources
Chapter 1 WHY INFORMATION SYSTEMS?
Labor Force Composition 1900-1997
Figure 1-1
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Transformation of the Business Enterprise • • • • • • •
Flattening Decentralization Flexibility Location independence Low transaction and coordination costs Empowerment Collaborative work and teamwork
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Emergence of the Digital Firm • • • • •
Digitally-enabled relationships with customers, suppliers, and employees Core business processes accomplished via digital networks Digital management of key corporate assets Rapid sensing and responding to environmental changes For example, Amazon-E-commerce company, banks - E-banking, AirAsia – E-ticking system, Egenting for room booking, etc.
System Concepts • System – Set of elements or components that interact to accomplish goals
• Components of a system – Inputs – Processing mechanisms – Outputs – Feedback
13
System Concepts (continued)
14
What is a System? (continued)
15
What is an Information System?
16
Input, Processing, Output, Feedback • Input – Activity of gathering and capturing raw data • Processing – Converting data into useful outputs • Output – Production of useful information, usually in the form of documents and reports • Feedback – Information from the system that is used to make changes to input or processing activities
17
Why Learn About Information Systems?
• Information systems used in most professions – Sales representatives – Managers – Financial planners • Information technology can help business in improving business processes, managerial decision making and workgroup collaborations. 18
What Is an Information System?
A set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization
Information Concepts
• Information – One of an organization’s most valuable resources – Often confused with the term data
20
What Is an Information System?
• Data: Streams of raw facts representing events such as business transactions
• Information: Clusters of facts that are meaningful and useful to human beings in the processes such as making decisions
What Is an Information System?
Data and Information Figure 1-2
Activities in an Information System
INPUT
PROCESS
FEEDBACK
OUTPUT
Activities in Information System • Input: collect and introduce data to system – Transaction: a business event, usually entered as input – Transaction processing system (TPS): a system that records transactions – Input devices include keyboards, bar code readers, voice recognition systems, touch screens • Data processing: perform calculations on input 24
Activities in Information System • Output: what is produced by the information system – Output devices include printers and speakers
• Storage: maintaining vast amounts of data – Storage devices include optical discs
25
Information Systems in Organizations • Trends that have made information systems important in business: – Growing power and decreasing cost of computers – Growing capacity and decreasing costs of data storage devices – Increasing variety and ingenuity of computer programs – Available, reliable, affordable, and fast communications links to the Internet – Growth of the Internet – Increasing computer literacy of the workforce 26
Information Systems in Organizations (continued)
Management Information Systems, Sixth Edition
27
Computer-Based Information System (CBIS) • Single set of hardware, software, databases, telecommunications, people, and procedures – That are configured to collect, manipulate, store, and process data into information • Technology infrastructure – Includes all hardware, software, databases, telecommunications, people, and procedures • Configured to collect, manipulate, store, and process data into information
A Business Perspective on Information Systems
• Information systems literacy: Broadbased understanding of information systems that includes behavioral knowledge about organizations and individuals using information systems as well as technical knowledge about computers.
• Computer literacy: Knowledge about information technology, focusing on understanding how computer-based technologies work
A Business Perspective on Information Systems
Using information systems
ORGANIZATIONS
TECHNOLOGY
Effectively requires an Understanding of the
INFORMATION
Organization, management
SYSTEMS
And information technology Shaping the system.
MANAGEMENT
Figure 1-4
A Business Perspective on Information Systems - Organization • Information systems are a part of organizations. • key elements of an organizations are its – – – – –
People Structure Operating procedures, Policies Culture
• An organization coordinates work through a structured hierarchy and formal, standard procedures
A Business Perspective on Information Systems - Management
Managerial roles and decisions are different at different levels: • Senior managers: make long-range
strategic decisions about products and services
• Middle managers: Carry out the programs and plans of senior management
• Operational managers: monitor the firm’s daily activities
A Business Perspective on Information Systems - Technology
Tools managers use to cope with change • Hardware: Physical equipment • Software: Detailed preprogrammed instructions Storage: Physical media for storing data and the software
A Business Perspective on Information Systems - Technology
• Communications Technology: transfers data from one physical location to another
• Networks: link computers to share data or resources
Business Information Systems
35
Business Information Systems (continued)
36
Chapter 1 THE NETWORK REVOLUTION AND THE INTERNET
The Widening Scope of Information Systems
• 1950s: Technical changes • 60s-70s: Managerial controls • 80s-90s: Institutional core activities
Growing Importance
Chapter 1 THE NETWORK REVOLUTION AND THE INTERNET
The Widening Scope of Information Systems
Figure 1-8
Chapter 1 THE NETWORK REVOLUTION AND THE INTERNET
The Widening Scope of Information Systems
• Over time, IS have play a major role in an organization. • From it affect the changes in technical to managerial control and behavior, and then now towards influenced ‘core’ activities in products, markets, suppliers and customers.
New Options for Organizational Design • Flattening organizations
– - to remove the layer of management and work as peer and team.
• Separating work from location
– thru email, Internet and video conferencing
• Reorganizing work-flows
– Computerized information system has slowly replacing manual system where it able the staff to complete the work more efficient and effectively.
• Increasing flexibility
– Companies can use communications technology to organize in more flexible ways
• Redefining organizational boundaries – to have a networked information systems • The changing management process - from manual system to computerized process
Chapter 1 TOWARD THE DIGITAL FIRM
Flattening Organizations Information Systems
Figure 1-9
Chapter 1 TOWARD THE DIGITAL FIRM
How Information Technology Increases organizational Flexibility
Small companies • Desktop machines, inexpensive computer-aided design (CAD) software, and computer-controlled machine tools provide the precision, speed and quality of giant manufacturers. • Information immediately accessed by the telephone and communications links eliminate the need for research staff and business libraries.
Large companies • Custom manufacturing system offer customized products • Massive databases of customer records to analyze the customer preferences • Information can help lower level employees to solve problem more easily
Chapter 1 TOWARD THE DIGITAL FIRM
Redesigned Work Flow For Insurance Underwriting
An application requiring 33 days in a paper system would only take 5 days using computers, networks and a streamlined work flow.
Figure 1-10
TOWARD THE DIGITAL FIRM • Electronic commerce: The buying and selling, marketing and servicing and delivery and payment of products/services and information over the Internet. • Electronic business : The use of Internet technologies to internetwork and empower business processes, electronic commerce and enterprise communication and collaboration within a company. • Electronic market: Information systems links, buyers and sellers to exchange information, products, services, payments
TOWARD THE DIGITAL FIRM
Figure 1-11
Electronic Commerce • Internet links buyers, sellers • Lower transaction costs • Goods and services advertised, bought, exchanged worldwide • Business-to-business transactions increasing
Electronic Business • Internet: Business builds private, secure network
• E-mail, Web documents, group software: Extends effective communication and control
• Extranet: Extension of intranet to authorized external users
5 key IS challenges confronting managers: 1. The Strategic Business Challenge
How can business use IT to design org that are competitive and effective? The power of computer hardware and software has grown much more rapidly than the ability of org to apply and use this technology To stay competitive, many org needs to redesigned by making fundamental changes in organizational behavior, develop new business models, design, produce, deliver and maintain goods and services Such as using Internet to have e-commerce, e-business, Intranet or Extranet
5 key IS challenges confronting managers: 2. The Globalization Challenge How can firms understand the business and system requirements of a global economic environment? To develop integrated, multinational IS, businesses must develop global hardware, software and communication standards and create cross-cultural accounting and reporting structures It is to cater selling goods in different countries.
5 key IS challenges confronting managers: 3. The Information Architecture and Infrastructure Challenge How can org develop an info architecture and IT infrastructure that supports their business goals ? Creation of a new system involve installation of new machine which requires redesigning the org and building a new information architecture and information technology (IT) infrastructure
INFORMATION ARCHITECTURE OF THE ORGANIZATION Today’s managers must know how to arrange and coordinate the various computer technologies and business system applications to meet the information needs of each level of their organization, and the needs of the organization as a whole.
5 key IS challenges confronting managers: 4. The Information System Investment Challenge How can organizations determine the business value of information systems? Tangible benefits : sales increase Intangible benefits: customer satisfaction or even staff is more motivated in doing the works
5 key IS challenges confronting managers: 5. The Responsibility and Control Challenge How can org ensure that their information systems are used in an ethically and socially responsible manner? IS must be designed so that they functions as intended produce accurate and reliable information and human can control the process New problems and challenges of which managers are award such as privacy, eliminate jobs performed by employees, injuries such as repetitive stress injury
THE END. ANY QUESTIONS???
1
The Information Systems Revolution: Transforming Business and Management
Chapter 1 OBJECTIVES
• What is the role of information systems in today’s competitive business environment? • What exactly is an information system? What do managers need to know about information systems? • How are information systems transforming organizations and management?
Chapter 1 OBJECTIVES
• How has the Internet and Internet technology transformed business? • What are the major management challenges to building and using information systems?
Chapter 1 MANAGEMENT CHALLENGES
1. Design competitive and effective systems 2. Understand system requirements of global business environment 3. Create information architecture that supports organization’s goal
Chapter 1 MANAGEMENT CHALLENGES
4. Determine business value of information systems 5. Design systems people can control, understand and use in a socially, ethically responsible manner
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Four powerful worldwide changes that have altered the business environment: 3. 4. 5. 6.
Emergence of the Global Economy Transformation of Industrial Economies Transformation of the Business Enterprise The Emerging Digital Firm
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Emergence of the Global Economy (1) • • •
Many countries in Asia and Europe are depends on imports and exports Success of a firm is depends on their ability to operate globally Globalization of the world’s industrial economies enhances the value of information to firm, therefore they required a powerful IS like Internet – Values of communications: to control trade with distributors and suppliers, control global corporation, operate 24 hours a day worldwide
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Emergence of the Global Economy (2) •
Globalization has cause a stiff competition for local business. –
Customer has more choices and ways to buy products, can shop 24 hours a day, information is more available at anytime
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Transformation of Industrial Economies • Transform to knowledge- and informationbased economies lead to knowledge- and information-intense products – •
•
Products that requires a great deals of learning and knowledge to produce, i.e. computer games Information technology has contribute to increase productivity (computerised factory machines), new products and services (credit card, faster delivery, worldwide reservation system) IS is needed to smoothen the flow of information to maximize the used of company resources
Chapter 1 WHY INFORMATION SYSTEMS?
Labor Force Composition 1900-1997
Figure 1-1
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Transformation of the Business Enterprise • • • • • • •
Flattening Decentralization Flexibility Location independence Low transaction and coordination costs Empowerment Collaborative work and teamwork
Chapter 1 WHY INFORMATION SYSTEMS?
The Competitive Business Environment and the Emerging Digital Firm
Emergence of the Digital Firm • • • • •
Digitally-enabled relationships with customers, suppliers, and employees Core business processes accomplished via digital networks Digital management of key corporate assets Rapid sensing and responding to environmental changes For example, Amazon-E-commerce company, banks - E-banking, AirAsia – E-ticking system, Egenting for room booking, etc.
System Concepts • System – Set of elements or components that interact to accomplish goals
• Components of a system – Inputs – Processing mechanisms – Outputs – Feedback
13
System Concepts (continued)
14
What is a System? (continued)
15
What is an Information System?
16
Input, Processing, Output, Feedback • Input – Activity of gathering and capturing raw data • Processing – Converting data into useful outputs • Output – Production of useful information, usually in the form of documents and reports • Feedback – Information from the system that is used to make changes to input or processing activities
17
Why Learn About Information Systems?
• Information systems used in most professions – Sales representatives – Managers – Financial planners • Information technology can help business in improving business processes, managerial decision making and workgroup collaborations. 18
What Is an Information System?
A set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization
Information Concepts
• Information – One of an organization’s most valuable resources – Often confused with the term data
20
What Is an Information System?
• Data: Streams of raw facts representing events such as business transactions
• Information: Clusters of facts that are meaningful and useful to human beings in the processes such as making decisions
What Is an Information System?
Data and Information Figure 1-2
Activities in an Information System
INPUT
PROCESS
FEEDBACK
OUTPUT
Activities in Information System • Input: collect and introduce data to system – Transaction: a business event, usually entered as input – Transaction processing system (TPS): a system that records transactions – Input devices include keyboards, bar code readers, voice recognition systems, touch screens • Data processing: perform calculations on input 24
Activities in Information System • Output: what is produced by the information system – Output devices include printers and speakers
• Storage: maintaining vast amounts of data – Storage devices include optical discs
25
Information Systems in Organizations • Trends that have made information systems important in business: – Growing power and decreasing cost of computers – Growing capacity and decreasing costs of data storage devices – Increasing variety and ingenuity of computer programs – Available, reliable, affordable, and fast communications links to the Internet – Growth of the Internet – Increasing computer literacy of the workforce 26
Information Systems in Organizations (continued)
Management Information Systems, Sixth Edition
27
Computer-Based Information System (CBIS) • Single set of hardware, software, databases, telecommunications, people, and procedures – That are configured to collect, manipulate, store, and process data into information • Technology infrastructure – Includes all hardware, software, databases, telecommunications, people, and procedures • Configured to collect, manipulate, store, and process data into information
A Business Perspective on Information Systems
• Information systems literacy: Broadbased understanding of information systems that includes behavioral knowledge about organizations and individuals using information systems as well as technical knowledge about computers.
• Computer literacy: Knowledge about information technology, focusing on understanding how computer-based technologies work
A Business Perspective on Information Systems
Using information systems
ORGANIZATIONS
TECHNOLOGY
Effectively requires an Understanding of the
INFORMATION
Organization, management
SYSTEMS
And information technology Shaping the system.
MANAGEMENT
Figure 1-4
A Business Perspective on Information Systems - Organization • Information systems are a part of organizations. • key elements of an organizations are its – – – – –
People Structure Operating procedures, Policies Culture
• An organization coordinates work through a structured hierarchy and formal, standard procedures
A Business Perspective on Information Systems - Management
Managerial roles and decisions are different at different levels: • Senior managers: make long-range
strategic decisions about products and services
• Middle managers: Carry out the programs and plans of senior management
• Operational managers: monitor the firm’s daily activities
A Business Perspective on Information Systems - Technology
Tools managers use to cope with change • Hardware: Physical equipment • Software: Detailed preprogrammed instructions Storage: Physical media for storing data and the software
A Business Perspective on Information Systems - Technology
• Communications Technology: transfers data from one physical location to another
• Networks: link computers to share data or resources
Business Information Systems
35
Business Information Systems (continued)
36
Chapter 1 THE NETWORK REVOLUTION AND THE INTERNET
The Widening Scope of Information Systems
• 1950s: Technical changes • 60s-70s: Managerial controls • 80s-90s: Institutional core activities
Growing Importance
Chapter 1 THE NETWORK REVOLUTION AND THE INTERNET
The Widening Scope of Information Systems
Figure 1-8
Chapter 1 THE NETWORK REVOLUTION AND THE INTERNET
The Widening Scope of Information Systems
• Over time, IS have play a major role in an organization. • From it affect the changes in technical to managerial control and behavior, and then now towards influenced ‘core’ activities in products, markets, suppliers and customers.
New Options for Organizational Design • Flattening organizations
– - to remove the layer of management and work as peer and team.
• Separating work from location
– thru email, Internet and video conferencing
• Reorganizing work-flows
– Computerized information system has slowly replacing manual system where it able the staff to complete the work more efficient and effectively.
• Increasing flexibility
– Companies can use communications technology to organize in more flexible ways
• Redefining organizational boundaries – to have a networked information systems • The changing management process - from manual system to computerized process
Chapter 1 TOWARD THE DIGITAL FIRM
Flattening Organizations Information Systems
Figure 1-9
Chapter 1 TOWARD THE DIGITAL FIRM
How Information Technology Increases organizational Flexibility
Small companies • Desktop machines, inexpensive computer-aided design (CAD) software, and computer-controlled machine tools provide the precision, speed and quality of giant manufacturers. • Information immediately accessed by the telephone and communications links eliminate the need for research staff and business libraries.
Large companies • Custom manufacturing system offer customized products • Massive databases of customer records to analyze the customer preferences • Information can help lower level employees to solve problem more easily
Chapter 1 TOWARD THE DIGITAL FIRM
Redesigned Work Flow For Insurance Underwriting
An application requiring 33 days in a paper system would only take 5 days using computers, networks and a streamlined work flow.
Figure 1-10
TOWARD THE DIGITAL FIRM • Electronic commerce: The buying and selling, marketing and servicing and delivery and payment of products/services and information over the Internet. • Electronic business : The use of Internet technologies to internetwork and empower business processes, electronic commerce and enterprise communication and collaboration within a company. • Electronic market: Information systems links, buyers and sellers to exchange information, products, services, payments
TOWARD THE DIGITAL FIRM
Figure 1-11
Electronic Commerce • Internet links buyers, sellers • Lower transaction costs • Goods and services advertised, bought, exchanged worldwide • Business-to-business transactions increasing
Electronic Business • Internet: Business builds private, secure network
• E-mail, Web documents, group software: Extends effective communication and control
• Extranet: Extension of intranet to authorized external users
5 key IS challenges confronting managers: 1. The Strategic Business Challenge
How can business use IT to design org that are competitive and effective? The power of computer hardware and software has grown much more rapidly than the ability of org to apply and use this technology To stay competitive, many org needs to redesigned by making fundamental changes in organizational behavior, develop new business models, design, produce, deliver and maintain goods and services Such as using Internet to have e-commerce, e-business, Intranet or Extranet
5 key IS challenges confronting managers: 2. The Globalization Challenge How can firms understand the business and system requirements of a global economic environment? To develop integrated, multinational IS, businesses must develop global hardware, software and communication standards and create cross-cultural accounting and reporting structures It is to cater selling goods in different countries.
5 key IS challenges confronting managers: 3. The Information Architecture and Infrastructure Challenge How can org develop an info architecture and IT infrastructure that supports their business goals ? Creation of a new system involve installation of new machine which requires redesigning the org and building a new information architecture and information technology (IT) infrastructure
INFORMATION ARCHITECTURE OF THE ORGANIZATION Today’s managers must know how to arrange and coordinate the various computer technologies and business system applications to meet the information needs of each level of their organization, and the needs of the organization as a whole.
5 key IS challenges confronting managers: 4. The Information System Investment Challenge How can organizations determine the business value of information systems? Tangible benefits : sales increase Intangible benefits: customer satisfaction or even staff is more motivated in doing the works
5 key IS challenges confronting managers: 5. The Responsibility and Control Challenge How can org ensure that their information systems are used in an ethically and socially responsible manner? IS must be designed so that they functions as intended produce accurate and reliable information and human can control the process New problems and challenges of which managers are award such as privacy, eliminate jobs performed by employees, injuries such as repetitive stress injury
THE END. ANY QUESTIONS???
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