1. Chapter 1 Managing in the Digital World
“If we'd given customers what they said they wanted, we'd have built a computer they'd have been happy with a year after we spoke to them—not something they'd want now…” Steve Jobs, Apple Computer

2. Learning Objectives
1. Explain what an information system is, contrasting its data, technology, people, and organizational components.
2. Describe the dual nature of information systems in the success and failure of modern organizations

3. Learning Objectives
1. Explain what an information system is, contrasting its data, technology, people, and organizational components.
2. Describe the dual nature of information systems in the success and failure of modern organizations

4. Information Systems Today
The Knowledge Worker
Term coined by Peter Drucker in 1959
An individual who is relatively well educated and who creates, modifies, and/or synthesizes knowledge as a fundamental part of a job
Knowledge Society
New Economy/Digital World
Digital Divide

5. Information Systems: Definition
Combination of five key elements:
People
Hardware
Software
Data
Telecommunications networks

6. Data: The Root and Purpose of Information Systems
Distinction between:
Data—raw, unformatted information
Example:
Information—data that is transformed to have a meaning
Example: (543)
Knowledge—body of governing procedures used to organize or manipulate data
Wisdom—accumulated knowledge

7. Data: The Root and Purpose of Information Systems (cont’d)

8. IT: The Components of Information Systems
Relationship of computer-based information systems to information technology and technology in general

9. IT: The Components of Information Systems—Technology
Any machine that can supplement or replace human manual work
Examples:
Heating system
Surgical laser

10. IT: The Components of Information Systems—Information Technology
A type of technology that is controlled by or uses information
Example: Manufacturing robot

11. IT: The Components of Information Systems—Computer-based IS
1-11
Systems using computers to provide useful data to people
Example: Specific software used to analyze data
1-11

12. Hot Skills for 2010 and Beyond

13. Learning Objectives
1. Explain what an information system is, contrasting its data, technology, people, and organizational components.
2. Describe the dual nature of information systems in the success and failure of modern organizations

14. The Dual Nature of IS IS can make you or break you
London Heathrow—The failure
Baggage handling system: original cost of $500 million
Disaster on opening day, costing $ 50 million due to over 28,000 bags being misrouted
FedEx—The success
$ 38 billion family of companies—largest express transportation company
“Information hub for business where managing information is the business”

15. IS for Competitive Advantage
Both FedEx and London Heathrow were developing strategic information systems
Only strategic information systems can help sustain competitive advantage

16. Why Information Systems Matter
Nicholas Carr article—“IT Doesn’t Matter”
IT no longer a source of advantage on the firm level
Companies should focus IT on cost reduction and risk mitigation
Many experts disagree with his arguments
Abbie Lundberg—Interview with Carr
Don Tapscott—“The Engine That Drives Success: The Best Companies Have the Best Business Models Because They Have the Best IT Strategies”
Many successful companies use IT to support a unique business strategy

17. Decision-Making Levels of an Organization

18. Operational Level Day-to-day business processes
Interactions with customers
Decisions:
Structured ( Procedures is specified).
Recurring / frequent
Can often be automated using IS( Inventory System).
BI (business intelegence) used to:
Optimize processes
Understand causes of performance problems

19. Managerial Level Functional managers Managers’ decisions
Monitor and control operational-level activities
Focus: effectively utilizing and deploying resources
Goal: achieving strategic objectives
Managers’ decisions
Semistructured
Moderately complex
Time horizon of few days to few months
BI can help with:
Performance analytics
Forecasts
Providing key performance indicators on dashboards

20. Managerial Level (cont’d)

21. Executive Level
The president, CEO, vice presidents, board of directors
Decisions
Unstructured
Long-term strategic issues
Complex and nonroutine problems with long-term ramifications
BI is used to:
Obtain aggregate summaries of trends and projections
Provide KPI’s (key performance indicator) across the organization

22. Executive Level (cont’d)

23. Providing Inputs into BI Applications
Decisions made by different departments need to be based on the same underlying data
“Single version of the truth”
BI systems access multiple databases or data warehouses
Data aggregated from operational systems
E.g., Transaction processing systems

24. Transaction Processing Systems (TPS)
Operational level
Purpose:
Processing of business events and transactions
Increase efficiency
Automation
Lower costs
Increased speed and accuracy
Examples:
Payroll processing
Sales and order processing
Inventory management
Product purchasing, receiving, and shipping
Accounts payable and receivable

25. Architecture of a TPS

26. Architecture of a TPS: Inputs
Source documents
Different data entry methods

27. Architecture of a TPS: Processing
Online processing
Immediate results
Batch processing
Transactions collected and later processed together
Used when immediate notification not necessary

28. Architecture of a TPS: Outputs
Counts, summary reports
Inputs to other systems
Feedback to systems operator

29. Summary of TPS Characteristics

30. Management Information Systems
8-30
Managerial level
Purpose:
Produce reports
Support of midlevel managers’ decisions
Examples:
Sales forecasting
Financial management and forecasting
Manufacturing, planning and scheduling
Inventory management and planning
Advertising and product pricing

31. Architecture of an MIS

32. Summary of MIS Characteristics

33. Decision Support Systems (DSS)
Decision-making support for recurring problems
Used mostly by managerial level employees
Interactive decision aid
What-if analyses
Analyze results for hypothetical changes
Example: Microsoft Excel

34. Architecture of a DSS

35. Common DSS Models

36. Executive Information Systems
Aka Executive support system
Executive level
Purpose:
Aid in executive decision making
Provide information in highly aggregated form
Examples:
Executive-level decision making
Long-range and strategic planning
Monitoring of internal and external events and resources
Crisis management
Staffing and labor relations

37. Architecture of an EIS

38. Summary of EIS Characteristics

39. Business Processes Supported by Functional Area Information Systems

40. Organizational Functions and Representative Information Systems

41. Geographic Information System (GIS)
Use of geographically referenced information
Finding optimal location for a new store
Identification of areas too wet to fertilize (see figure)
Locating target customers
Infrastructure design

42. Health information technology
(HIT) provides the umbrella framework to describe the comprehensive management of health information across computerized systems and its secure exchange between consumers, providers, government and quality entities, and insurers. Health information technology (HIT) is in general increasingly viewed as the most promising tool for improving the overall quality, safety and efficiency of the health delivery system (Chaudhry et al., 2006). Broad and consistent utilization of HIT will:
Improve health care quality;
Prevent medical errors;
Reduce health care costs;
Increase administrative efficiencies
Decrease paperwork; and
Expand access to affordable care.

43. Health information technology… cont.
Interoperable HIT will improve individual patient care, but it will also bring many public health benefits including:
Early detection of infectious disease outbreaks around the country;
Improved tracking of chronic disease management; and
Evaluation of health care based on value enabled by the collection of de-identified price and quality information that can be compared

44. End of Chapter Content
1-44

45. Learning Objectives
1. Describe the concept of business intelligence and how it is used at the operational, managerial, and executive levels of an organization.
2. Explain the three components of business intelligence: information and knowledge discovery, business analytics, and information visualization.

46. Opening Case—Managing in the Digital World: Apple Computer
Apple changed the way in which everyday people use computers
Long list of successful products
Success of iPod: tight integration with iTunes and AppStore

47. Apple Computers
A company’s survival may depend upon those employees who fail over and over as they try new ideas (Consultant & author Tom Peters)
Apple has had many failures:
Mac TV, PowerMac G4 Cube, Lisa, Newton, etc.
Apple’s overall success shows that a company without an interesting list of failures probably isn’t trying hard enough.

48. Bionic Contact Lens
Bionic eye implants for blind and partially blind people are being developed
Problems that must be solved first:
Plastics for electronic must be biocompatible
LED must be small enough to fit over the eye without causing discomfort, and yet must be functional
Where will the power for the device come from?

49. The Two Steves—Jobs & Wozniak
Knew each other in high school
Started selling Apple computers in 1976
Both left Apple in 1985
In 1996 Jobs returned to become Apple’s CEO

50. Worldwide Internet Usage
In 2008 about 17 percent of active Internet users were located in the United States
Internet usage:
Highest—North America: 74 percent of population
Lowest—Africa: 5.3 percent of population

51. Guerilla Wi-Fi
Digital divide is the “haves” and the “have-nots” in the IT world
One Laptop Per Child (OLPC) attempted to overcome this.
Meraki Network was founded to provide affordable Wi-Fi for these new computers
$50 Mini (wireless routers about the size of two stacked iPhones) can be piggy-backed so that one Mini connected to the Internet can relay the connection to other Minis, thus forming a large network