1. CHAPTER 1 INTRODUCTION : BUSINESS AND INFORMATION TECHNOLOGY

2. Learning Objectives
Discuss business pressures and responses in today’s Information Age
Differentiate between data and information, and describe the characteristics of high-quality data.
Name and describe the components of an information system.
Describe the capabilities expected of information systems in modern organizations.
Describe opportunities for strategic use of information systems.

3. Case : Blades Board & Skate rapid growth
The Business Problem
retailer of ice and inline skates and snowboards
the business needed a computer system that could instantly track sales and inventory at all of its stores
The Solution
point-of-sales (POS) systems
computerized cash registers that use specialized software to record transaction data such as the stock numbers of items sold, cost , time of sale, and information on the customer, such as name
help retailers cut costs, increase profits, and serve customers better by making the most of sales information

4. Case (continued…) The Results
Quicker, more accurate, and more detailed picture of sales and inventory
Tied into the firm’s accounting software
Order products from vendors only when needed, decreasing the amount of warehouse space

5. Case (continued…) What have we learned from this case??
Information Technologies are woven into complex systems
interrelating with other systems
permeating every business process
enabling tremendous gains in knowledge, productivity, and profitability
A great variety of information can now be gathered at each part of each business process, and information can be distributed throughout the organization, giving knowledge and insight for competitive decision making and strategic advantage.

6. Business in the Information Age: Pressures
Global Competition for Market and for Labor
Need for Real-time Operations
Changing Work Force
Customer-Oriented Operations
Technological Innovation and Obsolescence
Information Overload
Social Responsibility of Organizations
Government Regulation and Deregulation
Ethical Issues
Organizational Responses to Business Pressures in the Information Age

7. Business in the Information Age: Responses
Strategic Systems
Customer Focus and Customer Service
mass customization
Continuous Improvement Efforts
just-in-time (JIT)  total quality management (TQM)
Business Process Reengineering
Empowering Employees and Fostering Collaborative Work
Team-based Structure
Business Alliances
supply chain management and enterprise resource planning (ERP)
Electronic Commerce

8. Business Pressures & Organizational Responses : Summary
Global Competition for Market and Labor
Need for Real-time Operations
Changing Work Force
Customer Orientation
Technological Innovation and Obsolescence
Information Overload
Social Responsibility
Government Regulation and Deregulation
Ethical Issues
Organizational Responses
Strategic Systems
Customer Focus and Customer Service
Continuous Improvement Efforts (Just-in-Time, Total Quality Management)
Business Process Reengineering (BPR)
Team-based Structure
Business Alliances
Electronic Commerce

9. Why You Need to Learn About Information Technology
IT is Generally Interesting
IT Facilitates Work in Organizations
IT Offers Career Opportunities
IT is Used by All Departments
Locating real estate at nations bank
Using IT to strategic advantage at McDonald’s Canada
Using IT to manage human resources at the City of Winnipeg in Manitoba, Canada

10. Why You Need to Learn About Information Technology (continued…)
Web-based One-to-One Marketing at Liberty Financial Companies
one-to-one Web Marketing
aims to personalize a user’s online experience by offering services and advertisements that are likely to appeal to that person
Web-site operator can use the information it collects on individuals to provide customized content
used Web-based marketing software to build its database of customer profiles
investors able to find exactly the information they need, quickly and easily from Web sites

11. What is a Computer-Based Information System?
A computer-based information system (CBIS) is an information system that uses computer and often telecommunications technology to perform some or all of its intended tasks. An information technology is a particular component of a system, like a personal computer, a printer, or a network. But few information technologies are used alone. Rather, they are most effective combined into information systems. The basic components of information systems are the following:
Hardware  Software
Database  Network
Procedures  People

12. Components of Computer-based Information System
HARDWARE
SOFTWARE
DATABASE
NETWORK
PROCEDURES
PEOPLE

13. Capabilities of Information Systems
Provide Fast and Accurate Transaction
Provide Large Capacity, Fast Access Storage
Provide Fast Communications (machine to machine, human to human)
Reduce Information Overload
Span Boundaries
Provide Support for Decision Making
Provide a Competitive Weapon
General Technological Trends for IT

14. Strategic Questions and Information Technology Answer
Information Technology and organizational strategy are inseparable
Porter’s strategic analysis model (5 forces models)
the relative power of buyers and suppliers, threats from substitute products and services, and the ease or difficulty with which new competitors can enter the industry
Value chain
the discrete steps involved in the manufacturing of a product or the provision of a service

15. Strategic Questions (continued…)
Can we use IT to gain leverage over our suppliers? To improve our bargaining power? To reduce their bargaining power?
Can we use IT to reduce purchasing costs? To reduce our order processing costs? To reduce suppliers’ billing costs?
Can we use IT to identify alternative supply sources? To locate substitute products? To identify lower-price suppliers?
Can we use IT to improve the quality of products and services we receive from suppliers? To reduce order lead times? To monitor quality? To leverage supplier service data for better service to our customers?
Can we use IT to give us access to vital information about our suppliers that will help us reduce our costs? To select the most appropriate products? To negotiate price breaks? To monitor work progress and readjust our schedules? To assess quality control?
Can we use IT to give our suppliers information important to them that will in turn yield a cost, quality, or service reliability advantage to us? To conduct electronic exchange of data to reduce their costs? To provide master production schedule changes?

16. Strategic Questions (continued…)
Can we use IT to reduce our customer’s cost of doing business with us? To reduce paperwork for ordering or paying? To provide status information more rapidly? To reduce our costs and prices?
Can we provide some unique information to our customers that will make them buy our products/service? Can we provide better billing or account status data? Can we provide options to switch to higher-value substitutes? Can we be first with an easy-to-duplicate feature that will provide value simply by being first?
Can we use IT to increase our customers’ costs of switching to a new supplier? Can we provide proprietary hardware or software? Can we make customers dependent upon us for their data? Can we make our customer service more personalized?
Can we use external database sources to learn more about our customers and discover possible market niches? To relate buying from us to buying other products? To analyze customers interactions with us and questions to us to develop customized products/services or methods of responding to customer needs?

17. Strategic Questions (continued…)
Can we use IT to help our customers increase their revenues? To provide proprietary market data to them? To support their access to their markets through our channels?
Can we use IT to raise the entry barriers of new competitors into our markets? To redefine product features around IT components? To provide customer services through IT?
Can we use IT to differentiate our products/services? To highlight existing differentiations? To create new differentiations?
Can we use IT to make a preemptive move over our competition? To offer something new because we have proprietary data?
Can we use IT to provide substitutes? To simulate other products? To enhance our existing products?
Can we use IT to match an existing competitor’s offerings? Are competitor products/services based on unique IT capabilities or technologies and capabilities generally available?

18. Information Technology Answer (continued…)
Information Technology Answers
Consolidated Stores invested $80 million in KBToys.com, a site it will jointly own with startup BrainPlay.com
PetSmart plans to invest $16 million in 1999 in PetSmart.com, a site it will jointly own with startup PetJungle.com
Toys “R” Us invested $80 million to relaunch Toysrus.com, which will be run as a standalone business
CVS spent $30 million to buy online pharmacy Soma.com

19. The Plan of This Book
Part 1 INFORMATION TECHNOLOGY IN THE BUSINESS ENVIRONMENT
1. Introduction : Business and Information Technology
2. Organizational Structure and Information Technology
Part 2 INFORMATION TECHNOLGY INFRASTRUCTURE
3. Computer Hardware
4. Computer Software
5. Managing Organizational Data and Information
6. Telecommunications and Networks
7. The Internet and Intranets
Part 3 APPLYING INFORMATION TECHNOLOGY FOR COMPETITIVE ADVANTAGE
8. Interorganizational and Global Information Systems
9. Functional and Enterprise Systems
10. Data, knowledge, and Decision Support
11. Intelligent Systems in Business
12. Electronic Commerce
13. Strategic Information Systems and Reorganization
Part 4 DEVELOPING AND MANAGING INFORMATION SYSTEMS
14. Information Systems Development
15. Implementing IT:Ethics, Impacts, and Security

20. What’s in IT for Me? For Accounting For Finance
Information systems capture, organize, analyze, and disseminate data and information throughout modern organizations
For Finance
Information systems turn financial world on speed, volume, and accuracy of information flow

21. What’s in IT for Me? (continued …)
For Marketing
The Internet and the World Wide Web have opened an entirely new channel for marketing and provided much closer contact between the consumer and the supplier
For Production/Operations Management
Every process in a product or service’s value chain can be enhanced by the proper use of computer-based information systems

22. What’s in IT for Me? (continued …)
For Human Resource Management
Employees can handle much of their personal business themselves, and the Internet makes a tremendous amount of information available to the job seeker
For Management Information Systems (MIS)
The opportunities for those planning a career in MIS grows as fast as the adoption of information technologies into organizations everywhere