1.1 © 2010 by Prentice Hall 1 Chapter Information Systems in Global Business Today

1.2 © 2010 by Prentice Hall LEARNING OBJECTIVES Management Information Systems Chapter 1 Information Systems in Global Business Today Understanding the effects of information systems on business and their relationship to globalization. Explain why information systems are so essential in business today. How can information systems help business become more competitive? Define an information system and describe its management, organization, and technology components. Apply a four-step method for business problem solving to solve information system-related problems.

1.3 © 2010 by Prentice Hall NBA (National Basketball Association) Teams Make a Slam Dunk with Information Technology Management Information Systems Chapter 1 Information Systems in Global Business Today Problem: Lack of hard data usable in decision-making processes, costly and competitive market. Solutions: Developed a new system designed to collect and organize data using video clips of games.

1.4 © 2010 by Prentice Hall NBA (National Basketball Association) Teams Make a Slam Dunk with Information Technology Synergy Sports Technology tags video of each game with hundreds of descriptive categories and allows coaches and players to stream game footage from the Web. Demonstrates IT’s role in innovation and improving business processes. Illustrates how the Web has allowed businesses to use new tools to analyze critical data. Management Information Systems Chapter 1 Information Systems in Global Business Today

1.5 © 2010 by Prentice Hall The Role of Information Systems in Business Today How information systems are transforming business Increase in wireless technology use, Web sites Shifts in media and advertising New federal security and accounting laws Using videoconferencing technologies? Management Information Systems Chapter 1 Information Systems in Global Business Today

1.6 © 2010 by Prentice Hall Management Information Systems Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today Information Technology Capital Investment Figure 1-1 Information technology investment, defined as hardware, software, and communications equipment, grew from 32% to 51% between 1980 and Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 2008.

1.7 © 2010 by Prentice Hall 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 Management Information Systems Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

1.8 © 2010 by Prentice Hall Operational excellence: –Improvement of efficiency to attain higher profitability –Information systems, technology an important tool in achieving greater efficiency and productivity –Wal-Mart’s RetailLink system links suppliers to stores for superior replenishment system & web site. (5289 stores worldwide) Management Information Systems Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

1.9 © 2010 by Prentice Hall New products, services, and business models: –Business model: describes how company produces, delivers, and sells product or service to create wealth. –Information systems and technology a major enabling tool for new products, services, business models. Examples: Apple’s iPod, iTunes, and iPhone, Netflix’s Internet- based DVD rentals Management Information Systems Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

1.10 © 2010 by Prentice Hall Customer and supplier intimacy: –Serving customers well leads to customers returning, which raises revenues and profits Example: High-end hotels that use computers to track customer preferences and use to monitor and customize environment –Better communication with suppliers lowers costs. Example: J.C.Penney’s information system which links sales records to contract manufacturer. Management Information Systems Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

1.11 © 2010 by Prentice Hall Improved decision making –More accurate data leads to better decisions –Without accurate information: Managers must use forecasts, best guesses, luck Leads to: –Overproduction, underproduction of goods and services –Misallocation of resources –Poor response times Poor outcomes raise costs, lose customers –Example: Verizon’s Web-based digital provide managers with real-time data on customer complaints, network performance, line outages, etc. Management Information Systems Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

1.12 © 2010 by Prentice Hall Competitive advantage –Delivering better performance –Charging less for superior products –Responding to customers and suppliers in real time –Example: Toyota and TPS (Toyota Production System) enjoy a considerable advantage over competitors – information systems are critical to the implementation of TPS Management Information Systems Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

1.13 © 2010 by Prentice Hall Survival –Information technologies as necessity of business. –Industry-level changes, e.g. Citibank’s introduction of ATMs in –Governmental regulations requiring record- keeping. Management Information Systems Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today

1.14 © 2010 by Prentice Hall The Role of Information Systems in Business Today Management Information Systems Chapter 1 Information Systems in Global Business Today الترابط The Interdependence Between Organizations and Information Technology There is a growing interdependence between a firm’s 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. Figure 1-2

1.15 © 2010 by Prentice Hall Information Technology (IT): –Consists of all the hardware and software that a firm needs to use in order to achieve its business objectives. Information System (IS): –Defined as a set of interrelated components that collect, retrieve, process, store, and distribute information to support decision making, coordination, and control in an organization. Information vs. data –Data are streams of raw facts that not organized and arranged into a form that people can understand and use. –Information is data shaped into meaningful form Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

1.16 © 2010 by Prentice Hall Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for a specific store or sales territory. Figure 1-3 Data and Information

1.17 © 2010 by Prentice Hall Information system: Three activities produce information organizations need –Input: Captures raw data from organization or external environment –Processing: Converts raw data into meaningful form –Output: Transfers processed information to people or activities that use it Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

1.18 © 2010 by Prentice Hall Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today An information system contains information about an organization and its surrounding environment. Three basic activities—input, processing, and output—produce the information organizations need. Feedback is output returned to appropriate people or activities in the organization to evaluate and refine the input. Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory agencies, interact with the organization and its information systems. Figure 1-4 Functions of an Information System

1.19 © 2010 by Prentice Hall Feedback: –Output returned to appropriate members of organization to help evaluate or correct input stage Computer/Computer program vs. information system –Computers and software are technical foundation and tools, similar to the material and tools used to build a house (grinders,cement, hammers, nails), but these by themselves do not make a house; you need the architectural design, setting and static knowledge to build the house. Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

1.20 © 2010 by Prentice Hall Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today 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. Figure 1-5 Dimensions of Information Systems

1.21 © 2010 by Prentice Hall Organizational dimension of information systems –Hierarchy and responsibility Senior management الادارة العليا Middle management Operational management الادارة التنفيذية Knowledge workers Data workers Production or service workers Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

1.22 © 2010 by Prentice Hall Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today Business organizations are hierarchies consisting of three principal levels: senior management, middle management, and operational management. Information systems serve each of these levels. Scientists and knowledge workers often work with middle management. Figure 1-6 Levels in a Firm

1.23 © 2010 by Prentice Hall Organizational dimension of information systems (cont.) –Organizations have a structure that is composed of different levels and responsibility. (managerial, professional, technical employees and operational personnel) –Each organization has a unique culture, values, ways of doing things and politics. –Information Systems reflect these business cultures. Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

1.24 © 2010 by Prentice Hall 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 Make decision and plans to solve problems Occasionally re-creating the organization Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

1.25 © 2010 by Prentice Hall Technology dimension of information systems –Computer hardware Is the physical equipment used for input, processing and output activities in an information system. –Computer software Consists of the detailed, programmed instructions that control the computer hardware components in an information system. –Data management technology Consists of the software governing the organization of data on physical storage media. Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

1.26 © 2010 by Prentice Hall Technology dimension of information systems –Networking and telecommunications technology Computers & communications equipment can be connected for sharing voice, data, images, sound and video. A network links two or more computers to share data or resources such as printers. Internet is a global “network of networks” that uses universal standards to connect millions of different networks in over 200 countries around the world. Intranets are private networks used by corporations Extranets are similar Intranets except that they are directed at external users (like customers and suppliers). World Wide Web is a service provided by the Internet used for storing, retrieving, formatting and displaying information in a page format on the Internet. – IT infrastructure: provides platform on which the firm can build its information system. Management Information Systems Chapter 1 Information Systems in Global Business Today

1.27 © 2010 by Prentice Hall UPS Competes Globally with information technology Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today -United Parcel Service (UPS 1907) -400,000 employees in 186 countries all over the world. -92,000 vehicles -The world’s eighth largest airline -Delivers more than 15 million parcels and documents every day -Used Delivery Information Acquisition Device (DIAD) -UPS website

1.28 © 2010 by Prentice Hall A model of the problem-solving process Is a simple model of problem solving help you to understand and solve business problems using information systems and consists of 4 step process: Is a simple model of problem solving help you to understand and solve business problems using information systems and consists of 4 step process: Problem Identification Solution design Solution evolution and choice Implementation Business Problem-Solving Approach Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

1.29 © 2010 by Prentice Hall Essentials of Business Information Systems Chapter 1 Business Information Systems in Your Career Figure 1-4 During implementation and thereafter, the outcome must be continually measured and the information about how well the solution is working is fed back to the problem solvers. In this way, the identification of the problem can change over time, solutions can be changed, and new choices made, all based on experience. Understanding Information Systems: A Business Problem-Solving Approach A model of the problem-solving process