1. Information Systems: Concepts and Management
CHAPTER 2
Information Systems: Concepts and Management

2. Chapter Outline 2.1 Types of Information Systems
2.2 Competitive Advantage and Strategic Information Systems
2.3 Why Are Information Systems Important to Organizations and Society?
2.4 Managing Information Resources

3. LEARNING OBJECTIVES
Describe the components of computer-based information systems.
BUSINESS OPPORTUNITIES: Effective and well designed hardware and software could enable faster, better customer service.
BUSINESS RISKS: Inadequate or slow hardware or software could result in an inability to process information.

4. LEARNING OBJECTIVES (continued)
Describe the various types of information systems by breadth of support.
BUSINESS OPPORTUNITIES: Well integrated systems can improve data analysis capabilities.
BUSINESS RISKS: The wrong type of information system could result in excess costs and inadequate data collection.

5. LEARNING OBJECTIVES (continued)
Describe strategic information systems (SISs), and explain their advantages.
BUSINESS OPPORTUNITIES: A well designed SIS can reduce costs or help to attract new customers.
BUSINESS RISKS: Ineffective implementaton of a strategic information system increases costs.

6. LEARNING OBJECTIVES (continued)
Describe Porter’s competitive forces model and his value chain model, and explain how IT helps companies improve their competitive positions.
BUSINESS OPPORTUNITIES: Well designed systems can lock in customers, increasing profits.
BUSINESS RISKS: Providing too much information to suppliers can result in high supplier power, increasing costs.

7. LEARNING OBJECTIVES (continued)
Describe five strategies that companies can use to achieve competitive advantages in their industries.
BUSINESS OPPORTUNITIES: Well designed systems enable the rapid creation of new products attracting new customers.
BUSINESS RISKS: New methods and products can be easily copied, reducing competitive advantage.

8. LEARNING OBJECTIVES (continued)
Identify the major information systems that support each organizational level.
BUSINESS OPPORTUNITIES: Software matched to the needs of workers helps them to do their work more efficiently.
BUSINESS RISKS: The wrong kinds of systems slow down decision making, or make it impossible to gather the appropriate data.

9. LEARNING OBJECTIVES (continued)
Describe how information resources are managed, and discuss the roles of the information systems department and the end users.
BUSINESS OPPORTUNITIES: Well designed equipment and software improves the ability of employees to get their work done quickly, without pain or injury.
BUSINESS RISKS: Poorly designed work stations and equipment can result in work-related strains or injury.

10. Basic Components of Information Systems
Hardware
Software
A Database
A Network
Procedures
People

11. Major Capabilities of Information Systems
High-speed numerical computations
Quick access to high-volume data
Fast communication and collaboration
Automate business processes
(See Table 2-1 for more items)

12. Breadth of Support of Information Systems
Functional area information systems
Enterprise resource planning systems (ERP)
Transaction processing systems
Inter-organizational information systems

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

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

15. Porter’s Competitive Forces Model
The Threat of entry of new competitors is high when it is easy to enter a market and low when significant barriers to entry exist
A barrier to entry is a product or service feature that customers expect from organizations in a certain industry
For most organizations, the Internet increases the threat that new competitors will enter a market

16. Porter’s Competitive Forces Model
The bargaining power of suppliers is high when buyers have few choices and low 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

17. Porter’s Competitive Forces Model
The bargaining power of buyers is high when buyers have many choices and low when buyers have few choices
Internet increases buyers’ access to information, increasing buyer power
Internet reduces switching costs, which are the costs, in money and time, to buy elsewhere. This also increases buyer power

18. Porter’s Competitive Forces Model
The threat of substitute products or services is high when there are many substitutes for an organization’s products or services and low 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

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

20. Porter’s Value Chain Model
This model identifies specific activities where organizations can use competitive strategies for greatest impact.
Primary activities
Inbound logistics, operations, outbound logistics, marketing and sales, and customer service
Support activities
Accounting, finance, management, human resources management, product and technology development (R&D), and procurement

21. Why are Information Systems Important to Organizations & Society
IT will reduce the number of middle managers.
IT will change the manager’s job.
IT impacts employees at work.
IT provides quality-of-life improvements.

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

23. 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

24. 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

25. Copyright
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