1. CHAPTER 2 Information Systems and the Modern Organization

2. CHAPTER OUTLINE 2.1 Types of Information Systems 2.2 Competitive Advantage and Strategic Information Systems 2.3 Why Are Information Systems Importantto Organizations and Society? 2.4 Managing Information Resources

3. LEARNING OBJECTIVES Describe the components of computer-based information systems. Describe the various types of information systems by breadth of support. Identify the major information systems that support each organizational level. Describe strategic information systems (SISs), and explain their advantages.

4. Learning Objectives (continued) Describe porter’s competitive forces model and his value chain model, and explain how IT helps companies improve their competitive positions. Describe five strategies that companies can use to achieve competitive advantage in their industries. Describe how information resources are managed, and discuss the roles of the information systems department and the end users.

5. Chapter Opening Case Expansion

6. 2.1 Types of Information Systems Computer-based information systems (CBIS) use computer technology to perform some or all of their tasks and are composed of: – Hardware – Software – A Database – A Network – Procedures – People

7. Capabilities of Information Systems Perform high-speed, high-volume numerical computations Provide fast, accurate communication and collaboration within and among organizations Store huge amounts of information in small space Allow quick, inexpensive access to vast amounts of information worldwide Interpret vast amounts of data quickly and efficiently Increase effectiveness and efficiency of people working in groups in one place or around the world Automate semiautomatic business process and manual tasks Table 2.1

8. Application Programs An application program is a computer program designed to support a specific task, a business process or another application program.

9. Breadth of Support of Information Systems Functional area information systems Enterprise resource planning systems Transaction processing systems Interorganizational information systems

10. Information Systems Support for Organization Employees Office automation systems Functional area information systems Business intelligence systems Expert Systems Dashboards

11. 2.2 Competitive Advantage andStrategic Information Systems Competitive Advantage Strategic Information Systems

12. Porter’s Competitive Forces Model The best-known framework for analyzing competitiveness is Michael Porter’s competitive forces model (Porter, 1985).

13. Porter’s Competitive Forces Model Threat of entry of new competitors A barrier to entry For most organizations, the Internet increases the threat that new competitors will enter a market.

14. Porter’s Competitive Forces Model The bargaining power of suppliers is ____ when buyers have few choices and ____ when buyers have many choices. Internet impact is mixed. Buyers can find alternative suppliers and compare prices more easily, reducing power of suppliers. On the other hand, as companies use the Internet to integrate their supply chains, suppliers can lock in customers.

15. Porter’s Competitive Forces Model The bargaining power of buyers is ____ when buyers have many choices and ____ when buyers have few choices. Internet increases buyers’ access to information, increasing buyer power. Internet reduces switching costs

16. Porter’s Competitive Forces Model The threat of substitute products or services is _____ when there are many substitutes for an organization’s products or services and _____ where there are few substitutes. Information-based industries are in the greatest danger from this threat (e.g., music, books, software). The Internet can convey digital information quickly and efficiently.

17. Porter’s Competitive Forces Model The rivalry among firms in an industry is ____ when there is fierce competition and ____ when there is not.

18. Porter’s Value Chain Model This model identifies specific activities where organizations can use competitive strategies for greatest impact. – Primary activities: – Support activities:

19. Strategies for Competitive Advantage Cost Leadership Differentiation Innovation Operational Effectiveness Customer-orientation

20. 2.3 Why are Information Systems Important to Organizations & Society IT will reduce the number of _____________. IT will change the _____________. IT impacts ________________. IT provides ______________ improvements.

21. Enabling People with Disabilities to Work with Computers

22. Improvements in Health Care Roving Robot Camera The Pill Cam daVinci Surgical Robot Medical Simulations

23. Managing Information Resources Which IT Resources are Managed and By Whom? The Role of the IS Department

24. Traditional Major IS Functions Managing systems development and systems project management Managing computer operations Staffing, training, developing IS skills Providing technical services Infrastructure planning, development, control

25. New (Consultative) IS Functions Initiating and designing strategic information systems Incorporating the Internet and e-commerce into the business Managing system integration Educating non-IS managers about IT Educating IS staff about the business Supporting end-user computing Partnering with executives Managing outsourcing Innovate Ally with vendors and IS departments in other organizations

26. Supporting End Users One form of end-user support is the help desk, where IS staffers help users troubleshoot problems with their systems.