1. BME305 Management Information Systems
B. Sc. Business Administration (External) Degree
University of Sri Jayewardenepura

2. Information Systems in Global Business Today
The Role of Information Systems in Business Today
Perspectives on Information Systems – what , composition
Contemporary Approaches to Information Systems

3. How information systems are transforming business
Management Information Systems
Chapter 1 Information Systems in Global Business Today
The Role of Information Systems in Business Today
How information systems are transforming business
Increased technology investments (10% – 15%)
Increased responsiveness to customer demands
Shifts in media and advertising (through , blogs, google ads)
New laws – cyber laws
Globalization opportunities
Internet has drastically reduced costs of operating on global scale
Reduced global operational cost
World wide market place (customer / supplier)
Finding low cost suppliers , managing production faculty in other countries

4. In the emerging, fully digital firm
Management Information Systems
Chapter 1 Information Systems in Global Business Today
The Role of Information Systems in Business Today
In the emerging, fully digital firm
Significant business relationships are digitally enabled and mediated
Core business processes are accomplished through digital networks
Key corporate assets are managed digitally
Digital firms offer greater flexibility in organization and management
Time shifting, space shifting

5. Management Information Systems
Chapter 1 Information Systems in Global Business Today
The Role of Information Systems in Business Today
Growing interdependence
between ability to use information technology
and
ability to implement corporate strategies and achieve corporate goals
Business firms invest heavily in information systems to achieve six strategic business objectives:
Operational excellence
use as tool to achieve higher efficiency and productivity
New products, services, and business models
Music industry – new products and new model eg. me.lk, ebay
Customer and supplier intimacy / familiarity
hotels keep customer information, amerzon customer tracking
Improved decision making -
Best guesses v right decision - through right right time
Competitive advantage – doing the things better than others
Survival – IT is necessary item to survive , eg Banks

6. The Interdependence Between Organizations and Information Technology
Management Information Systems
Chapter 1 Information Systems in Global Business Today
The Role of Information Systems in Business Today
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

8. Functions of an Information System
Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Functions of an Information System
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

9. Information Systems Are More Than Computers
Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Information Systems Are More Than Computers
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

10. Organizational dimension of IS
Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Organizational dimension of IS
Hierarchy of authority, responsibility
Senior management
Middle management
Operational management
Knowledge workers
Data workers
Production or service workers
Separation of business functions
Sales and marketing
Human resources
Finance and accounting
Production and manufacturing)
Unique business processes
Unique business culture
Organizational politics

11. Management dimension of information system
Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Management dimension of information system
Managers set organizational strategy for responding to business challenges
In addition, managers must act creatively:
Creation of new products and services
Occasionally re-creating the organization

12. Technology dimension of information systems
Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Technology dimension of information systems
Computer hardware and software
Data management technology
Networking and telecommunications technology
Networks, the Internet, intranets and extranets, World Wide Web
IT infrastructure: provides platform that system is built on

13. Dimensions of UPS tracking system
Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Dimensions of UPS tracking system
Organizational:
Procedures for tracking packages and managing inventory and provide information
Management:
Monitor service levels and costs
Technology:
Handheld computers, bar-code scanners, networks, desktop computers, etc.

15. Contemporary Approaches to Information Systems
Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
Contemporary Approaches to Information Systems
The study of information systems deals with issues and insights contributed from technical and behavioral disciplines.
Figure 1-9

16. Emphasizes mathematically based models
Management Information Systems
Chapter 1 Information Systems in Global Business Today
Contemporary Approaches to Information Systems
Technical approach
Emphasizes mathematically based models
Computer science, management science, operations research
Behavioral approach
Behavioral issues (strategic business integration, implementation, how IS effects on groups, individuals and org etc.) eg. Freedom, Power
Psychology, economics, sociology

17. Management Information Systems
Chapter 1 Information Systems in Global Business Today
Contemporary Approaches to Information Systems
Sociotechnical view
Optimal organizational performance achieved by jointly optimizing both social and technical systems used in production
Helps avoid purely technological approach

18. ? A Sociotechnical Perspective on Information Systems How do we do
Management Information Systems
Chapter 1 Information Systems in Global Business Today
Perspectives on Information Systems
A Sociotechnical Perspective on Information Systems
How do we do ?
In a sociotechnical perspective, the performance of a system is optimized when both the technology and the organization mutually adjust to one another until a satisfactory fit is obtained.
Figure 1-10

20. Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
Types of Business Information Systems

21. Workflows of material, information, knowledge
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
Business processes:
Workflows of material, information, knowledge
Sets of activities, steps
May be tied to functional area or be cross-functional
Businesses: Can be seen as collection of business processes
Business processes may be assets or liabilities

22. Examples of functional business processes
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
Examples of functional business processes
Manufacturing and production
Assembling the product
Sales and marketing
Identifying customers
Finance and accounting
Creating financial statements
Human resources
Hiring employees

23. The Order Fulfillment Process
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
The Order Fulfillment Process
Fulfilling a customer order involves a complex set of steps that requires the close coordination of the sales, accounting, and manufacturing functions.
Figure 2-1

24. Information technology enhances business processes in two main ways:
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
Information technology enhances business processes in two main ways:
Increasing efficiency of existing processes
Automating steps that were manual (POS Terminals)
Enabling entirely new processes that are capable of transforming the businesses
Change flow of information
Replace sequential steps with parallel steps
Eliminate delays in decision making
Flexible organizations, internal memo, BPO

25. Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
System types:
Transaction processing systems: supporting operational level employees
Management information systems and decision-support systems: supporting managers
Decision support systems (Business Intelligence Systems)
Executive support systems: supporting executives

26. Interrelationships Among Systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Interrelationships Among Systems
The various types of systems in the organization have interdependencies. TPS are major producers of information that is required by many other systems in the firm, which, in turn, produce information for other systems. These different types of systems are loosely coupled in most business firms, but increasingly firms are using new technologies to integrate information that resides in many different systems.
Figure 2-10

27. Enterprise applications Span functional areas
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Enterprise applications
Span functional areas
Execute business processes across firm
Include all levels of management
Four major applications:
Enterprise systems
Supply chain management systems
Customer relationship management systems
Knowledge management systems

28. Enterprise Application Architecture
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Enterprise Application Architecture
Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization.
Figure 2-11

29. More detail available on given slides

30. Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Enterprise systems
Collects data from different firm functions and stores data in single central data repository
Resolves problem of fragmented, redundant data sets and systems
Enable:
Coordination of daily activities
Efficient response to customer orders (production, inventory)
Provide valuable information for improving management decision making

31. Enterprise Systems Management Information Systems Figure 2-12
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Enterprise Systems
Enterprise systems integrate the key business processes of an entire firm into a single software system that enables information to flow seamlessly throughout the organization. These systems focus primarily on internal processes but may include transactions with customers and vendors.
Figure 2-12

32. Supply chain management systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Supply chain management systems
Manage firm’s relationships with suppliers
Share information about
Orders, production, inventory levels, delivery of products and services
Goal: Right amount of products to destination with least amount of time and lowest cost

33. Customer relationship management systems:
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Customer relationship management systems:
Provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention.
Integrate firm’s customer-related processes and consolidate customer information from multiple communication channels

34. Knowledge management systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Knowledge management systems
Support processes for acquiring, creating, storing, distributing, applying, integrating knowledge
Collect internal knowledge and link to external knowledge
Include enterprise-wide systems for:
Managing documents, graphics and other digital knowledge objects
Directories of employees with expertise

35. Information Systems, Organizations, and Strategy
Organizations / Information Systems and relationship
How Information Systems Impact Organizations and Business Firms
Using Information Systems to Achieve Competitive Advantage
Using Systems for Competitive Advantage: Management Issues

36. Information technology and organizations influence one another
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Information technology and organizations influence one another
Complex relationship influenced by organization’s structure, business processes, politics, culture, environment, and management decisions

37. Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
The Two-Way Relationship Between Organizations and Information Technology
Eg; Decide (what) systems, (How) implementation
This complex two-way relationship is mediated by many factors, not the least of which are the decisions made—or not made—by managers. Other factors mediating the relationship include the organizational culture, structure, politics, business processes, and environment.
Eg; Internal Communication – Message, s

38. What is an organization?
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
What is an organization?
Technical definition:
Stable, formal social structure that takes resources from environment and processes to produce outputs.
A formal legal entity with internal rules and procedures, as well as a social structure
Behavioral definition:
A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution

39. The Technical Microeconomic Definition of the Organization
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
The Technical Microeconomic
Definition of the Organization
In the microeconomic definition of organizations, capital and labor (the primary production factors provided by the environment) are transformed by the firm through the production process into products and services (outputs to the environment). The products and services are consumed by the environment, which supplies additional capital and labor as inputs in the feedback loop.
Figure 3-2

40. The Behavioral View of Organizations
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
The Behavioral View of Organizations
The behavioral view of organizations emphasizes group relationships, values, and structures.
Figure 3-3

41. Organizations ?

42. Understanding the organizations Design successful systems?
Understanding the organizations
Design successful systems

43. Features of organizations
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Features of organizations
All modern organizations share some characteristics, such as:
Use of hierarchical structure
Accountability, authority in system of impartial decision-making
Adherence to principle of efficiency
Other features include:
Routines (standard operating procedures) and business processes (Collections of routines)
organizational politics
culture
Environments
Structures

44. More detail available on given slides

45. Routines and business processes
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Routines and business processes
Routines (standard operating procedures)
Precise rules, procedures, and practices developed to cope with virtually all expected situations
Business processes: Collections of routines
Business firm: Collection of business processes

46. Routines, Business Processes, and Firms
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Routines, Business Processes, and Firms
All organizations are composed of individual routines and behaviors, a collection of which make up a business process. A collection of business processes make up the business firm. New information system applications require that individual routines and business processes change to achieve high levels of organizational performance.
Figure 3-4

47. Organizational politics
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Organizational politics
Divergent viewpoints lead to political struggle, competition, and conflict
Political resistance greatly hampers organizational change

48. Organizational culture:
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Organizational culture:
Encompasses set of assumptions that define goal and product
What products the organization should produce
How and where it should be produced
For whom the products should be produced
May be powerful unifying force as well as restraint on change

49. Organizational environments:
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Organizational environments:
Organizations and environments have a reciprocal relationship
Organizations are open to, and dependent on, the social and physical environment
Organizations can influence their environments
Environments generally change faster than organizations
Information systems can be instrument of environmental scanning, act as a lens

50. Environments and Organizations Have a Reciprocal Relationship
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Environments and Organizations
Have a Reciprocal Relationship
IS is a key tool for environmental scanning and helping managers to identify the external changes and responses
Figure 3-5

51. Organizational structure
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Organizational structure
Five basic kinds of structure
Entrepreneurial: Small start-up business
Machine bureaucracy: Midsize manufacturing firm
Divisionalized bureaucracy: Fortune 500 firms
Professional bureaucracy: Law firms, school systems, hospitals
Adhocracy: Consulting firms

52. Other Organizational Features
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Organizations and Information Systems
Other Organizational Features
Goals
Constituencies
Leadership styles
Tasks
Surrounding environments

53. Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
Economic impacts
IT changes relative costs of capital and the costs of information
Information systems technology is a factor of production, like capital and labor – cyber shops
IT affects the cost and quality of information and changes economics of information
Information technology helps firms contract in size because it can reduce transaction costs (the cost of participating in markets). Outsourcing expands

54. Transaction cost theory
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
Transaction cost theory
Firms seek to economize on cost of participating in market (transaction costs)
IT lowers market transaction costs for firm, making it worthwhile for firms to transact with other firms rather than grow the number of employees

55. Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
The Transaction Cost Theory of the Impact of Information Technology on the Organization
Firms traditionally grew in size to reduce transaction costs. IT potentially reduces the costs for a given size, shifting the transaction cost curve inward, opening up the possibility of revenue growth without increasing size, or even revenue growth accompanied by shrinking size.
Figure 3-6

56. Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
Agency theory:
Firm is nexus of contracts among self-interested parties requiring supervision
Firms experience agency costs (the cost of managing and supervising) which rise as firm grows
IT can reduce agency costs, making it possible for firms to grow without adding to the costs of supervising, and without adding employees

57. Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
The Agency Cost Theory of the Impact of Information Technology on the Organization
As firms grow in size and complexity, traditionally they experience rising agency costs. IT shifts the agency cost curve down and to the right, enabling firms to increase size while lowering agency costs.
Figure 3-7

58. Organizational and behavioral impacts IT flattens organizations
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
Organizational and behavioral impacts
IT flattens organizations
Decision-making pushed to lower levels
Fewer managers needed (IT enables faster decision-making and increases span of control)
Post-industrial organizations
Organizations flatten because in post-industrial societies, authority increasingly relies on knowledge and competence rather than formal positions

59. Organizational resistance to change
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
Organizational resistance to change
Information systems become bound up in organizational politics because they influence access to a key resource -- information
Information systems potentially change an organization’s structure, culture, politics, and work
Most common reason for failure of large projects is due to organizational & political resistance to change

60. The Internet and organizations
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
The Internet and organizations
The Internet increases the accessibility, storage, and distribution of information and knowledge for organizations
The Internet can greatly lower transaction and agency costs
E.g. online help, electronic manual, network based problem solving (remote login)

61. Central organizational factors to consider when planning a new system:
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
How Information Systems Impact Organizations and Business Firms
Central organizational factors to consider when planning a new system:
Environment
Structure
Hierarchy, specialization, routines, business processes
Culture and politics
Type of organization and style of leadership
Main interest groups affected by system; attitudes of end users
Tasks, decisions, and business processes the system will assist

63. Business value chain model
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Business value chain model
Views firm as series of activities that add value to products or services
Highlights activities where competitive strategies can best be applied
Primary activities vs. secondary activities
At each stage, determine how information systems can improve operational efficiency and improve customer and supplier intimacy
Utilize benchmarking, industry best practices

64. The Value Chain Model Management Information Systems Figure 3-11
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
The Value Chain Model
This figure provides examples of systems for both primary and support activities of a firm and of its value partners that can add a margin of value to a firm’s products or services.
Figure 3-11

66. Michael Porter’s competitive forces model
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Michael Porter’s competitive forces model
Provides general view of firm, its competitors, and environment
Five competitive forces shape fate of firm
Traditional competitors
New market entrants
Substitute products and services
Customers
Suppliers

67. Porter’s Competitive Forces Model
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Porter’s Competitive Forces Model
In Porter’s competitive forces model, the strategic position of the firm and its strategies are determined not only by competition with its traditional direct competitors but also by four forces in the industry’s environment: new market entrants, substitute products, customers, and suppliers.
Figure 3-10

68. Traditional competitors
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Traditional competitors
All firms share market space with competitors who are continuously devising new products, services, efficiencies, switching costs
New market entrants
Some industries have high barriers to entry, e.g. computer chip business
New companies have new equipment, younger workers, but little brand recognition

69. Substitute products and services
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Substitute products and services
Substitutes customers might use if your prices become too high, e.g. iTunes substitutes for CDs
Customers
Can customers easily switch to competitor’s products? Can they force businesses to compete on price alone in transparent marketplace?
Suppliers
Market power of suppliers when firm cannot raise prices as fast as suppliers

70. Product differentiation Focus on market niche
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Four generic strategies for dealing with competitive forces, enabled by using IT
Low-cost leadership
Product differentiation
Focus on market niche
Strengthen customer and supplier intimacy

71. Product differentiation
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Low-cost leadership
produce products and services at a lower price than competitors while enhancing quality and level of service.
E.g. reducing stocks through JIT, automated the process
Product differentiation
Enable new products or services, greatly change customer convenience and experience
E.g. adding new feature through IT. Banking, mobile, Apple iPhone, Google
Personalized products – PC, Cars

72. Strengthen customer and supplier intimacy’
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Focus on market niche
Use information systems to enable a focused strategy on a single market niche; specialize.
IS support to analyze buying patterns, taste, preference closely.
E.g. Hilton Hotels
Strengthen customer and supplier intimacy’
Use information systems to develop strong ties and loyalty with customers and suppliers; increase switching costs
E.g. Chrysler, Amazon
Customization and personalization techniques (for e solutions)

73. The Internet’s impact on competitive advantage
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
The Internet’s impact on competitive advantage
Transformation, destruction, threat to some industries
E.g. travel agency, printed encyclopedia, newspaper
Competitive forces still at work, but rivalry more intense
Universal standards allow new rivals, entrants to market
New opportunities for building brands and loyal customer bases

75. Strategic advantage at industry level:
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Strategic advantage at industry level:
Use IT to develop industry-wide standards for exchanging information or transactions electronically, to increase efficiency, make product substitution less likely, and perhaps raise entry costs
Value web:
Collection of independent firms using highly synchronized IT to coordinate value chains to produce product or service collectively
More customer driven, less linear operation than traditional value chain

76. The Value Web Management Information Systems Figure 3-12
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
The Value Web
The value web is a networked system that can synchronize the value chains of business partners within an industry to respond rapidly to changes in supply and demand.
Figure 3-12

77. Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Information systems can improve overall performance of business units by promoting synergies and core competencies
Synergies
When output of some units used as inputs to others, or organizations pool markets and expertise
E.g. Merger of Google and Mobitel

78. Core competencies Activity for which firm is world-class leader
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Core competencies
Activity for which firm is world-class leader
Relies on knowledge, experience, and sharing this across business units
E.g. IS to create central core competencies

79. Network-based strategies
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Network-based strategies
Take advantage of firm’s abilities to network with each other
Include use of:
Network economics
Virtual company model
Business ecosystems

80. Network economics Traditional economics: Law of diminishing returns
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Network economics
Traditional economics: Law of diminishing returns
The more any given resource is applied to production, the lower the marginal gain in output, until a point is reached where the additional inputs produce no additional outputs
Network economics:
Business model based on networks. Marginal cost of adding new participant almost zero, with much greater marginal gain
Value of community grows with size (eBay)
Value of software grows as installed customer base grows – continue with product and more user support

81. Virtual company strategy
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Virtual company strategy
Virtual company uses networks to ally with other companies to create and distribute products without being limited by traditional organizational boundaries or physical locations
E.g. Li Fung manages production, shipment of garments for major fashion companies, outsourcing all work to over 7,500 suppliers

82. Business ecosystems Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Information Systems to Achieve Competitive Advantage
Business ecosystems
Industry sets of firms providing related services and products
Microsoft platform used by thousands of firms for their own products
Wal-Mart’s order entry and inventory management system
Keystone firms: Dominate ecosystem and create platform used by other firms
Niche firms: Rely on platform developed by keystone firm
Individual firms can consider how IT will enable them to become profitable niche players in larger ecosystems

84. Sustaining competitive advantage
Management Information Systems
Chapter 3 Information Systems, Organizations, and Strategy
Using Systems for Competitive Advantage: Management Issues
Sustaining competitive advantage
Because competitors can retaliate and copy strategic systems, competitive advantage is not always sustainable; systems may become tools for survival
Performing strategic systems analysis
What is structure of industry? – competitive forces
What are value chains for this firm?
Managing strategic transitions
Adopting strategic systems requires changes in business goals, relationships with customers and suppliers, and business processes

85. Ethical and Social Issues in Information Systems

86. A model for thinking about ethical, social, and political issues
Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems
Understanding Ethical and Social Issues Related to Systems
A model for thinking about ethical, social, and political issues
Five moral dimensions of the information age
Information rights and obligations
Property rights and obligations
Accountability and control
System quality
Quality of life
Key technology trends that raise ethical issues

87. Information rights: Privacy and freedom in the Internet Age
Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems
The Moral Dimensions of Information Systems
Information rights: Privacy and freedom in the Internet Age
The European directive on data protection
Internet challenges to privacy
Technical solutions
Property rights: Intellectual property
Trade secrets
Copyright
Patents
Challenges to intellectual property rights

88. Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems
The Moral Dimensions of Information Systems
Accountability, liability, and control
Computer-related liability problems
System quality: Data quality and system errors
Quality of life: Equity, access, and boundaries
Balancing power: Center versus distributed
Rapidity of change: global rapid change wiped-out business and your job quickly
Maintaining boundaries: do anything any where - Family, work, and leisure
Dependence and vulnerability – what happen if system fails

89. Quality of life: Equity, access, and boundaries (cont’d)
Management Information Systems
Chapter 4 Ethical and Social Issues in Information Systems
The Moral Dimensions of Information Systems
Quality of life: Equity, access, and boundaries (cont’d)
Computer crime and abuse
Employment: Trickle-down technology and reengineering job loss
Equity and access: does everyone have equal opportunity to participate digital age? Increasing racial and social class cleavages
Health risks: RSI, CVS, and Technostress

90. Enhancing Decision Making

91. Business value of improved decision making Types of decisions
Management Information Systems
Chapter 12 Enhancing Decision Making
Decision Making and Information Systems
Business value of improved decision making
Decide the gain / lose (what is the key source)
Types of decisions
Unstructured / semi structured/ structured

92. Stages in Decision Making
Management Information Systems
Chapter 12 Enhancing Decision Making
Decision Making and Information Systems
Stages in Decision Making
The decision-making process can be broken down into four stages.
Figure 12-2

93. Managers and decision making in the real world
Management Information Systems
Chapter 12 Enhancing Decision Making
Decision Making and Information Systems
Managers and decision making in the real world
Managerial roles
Interpersonal role- figurehead for the org. (symbolic duties)
Informational role – information dissemination (receiving up-to-date information and re distribute)
Decision role- make decisions
Real-world decision making
IS are not helpful to all managerial roles
Result depends on
Information quality – high quality decision need high quality info
Management filters – biases, less attention make bad decisions
Organizational culture – decisions for balance interest groups rather than best solution

94. Management information systems (MIS) Decision-support systems (DSS)
Chapter 12 Enhancing Decision Making
Systems for Decision Support
Management information systems (MIS)
Decision-support systems (DSS)
Business value of executive support systems
Data visualization and geographic information systems (GIS)
Web-based customer decision-support systems

95. Building Systems

96. Organizational Change Carries Risks and Rewards
Management Information Systems
Chapter 13 Building Systems
Systems as Planned Organizational Change
Organizational Change Carries Risks and Rewards
The most common forms of organizational change are automation and rationalization. These relatively slow-moving and slow-changing strategies present modest returns but little risk. Faster and more comprehensive change—such as reengineering and paradigm shifts—carries high rewards but offers substantial chances of failure.
Figure 13-1

97. Completing the systems development process
Management Information Systems
Chapter 13 Building Systems
Overview of Systems Development
Systems analysis
Establishing information requirements
Systems design
The role of end users
Completing the systems development process
Programming
Testing
Conversion
Production and Maintenance

98. The Systems Development Process
Management Information Systems
Chapter 13 Building Systems
Overview of Systems Development
The Systems Development Process
Building a system can be broken down into six core activities.
Figure 13-3

99. Traditional systems life cycle Prototyping
Management Information Systems
Chapter 13 Building Systems
Alternative Systems-Building Approaches
Traditional systems life cycle
Prototyping
Steps in prototyping
Advantages and disadvantages of prototyping
End-user development – developed by end user with little help with expert
Application software packages and outsourcing

100. Rapid application development (RAD)
Management Information Systems
Chapter 13 Building Systems
Application Development for the Digital Firm
Rapid application development (RAD)
Component-based development and Web services
Web services and service-oriented computing

101. Introduction to the Computers

102. What Is a Computer and What Does It Do?
Computer: A programmable, electronic device that accepts data, performs operations on that data, and stores the data or results as needed
Computers follow instructions, called programs, which determine the tasks the computer will perform
Basic operations
Input: Entering data into the computer
Processing: Performing operations on the data
Output: Presenting the results
Storage: Saving data, programs, or output for future use
Communications: Sending or receiving data

103. Hardware Hardware: The physical parts of a computer Internal hardware
Located inside the main box (system unit) of the computer
External hardware
Located outside the system unit and plug into ports located on the exterior of the system unit
Hardware associated with all five computer operations

104. Hardware

105. Hardware Input devices Processing devices Output devices
Used to input data into the computer
Keyboards, mice, scanners, cameras, microphones, joysticks, etc.
Processing devices
Perform calculations and control computer’s operation
Central processing unit (CPU) and memory
Output devices
Present results to the user
Monitors, printers, speakers, projectors, etc.

106. Hardware Storage devices Communications devices
Used to store data on or access data from storage media
Hard drives, DVD disks and drives, USB flash drives, etc.
Communications devices
Allow users to communicate with others and to electronically access information
Modems, network adapters, etc.

107. Software
Software: The programs or instructions used to tell the computer hardware what to do
System software: Operating system allows a computer to operate
Application software: Performs specific tasks or applications

108. Computers to Fit Every Need
Six basic categories of computers
Embedded computers
Mobile devices
Personal computers
Midrange servers
Mainframe computers
Supercomputers

109. Computer Networks and the Internet
Computer network: A collection of hardware and other devices that are connected together.
Users can share hardware, software, and data
Users can communicate with each other
Network servers: Manage resources on a network
Clients: Access resources through the network server
Computer networks exist in many sizes and types
Home networks
School and small business networks
Large corporate
Public wireless networks
The Internet

110. What Are the Internet and the World Wide Web?
Internet: The largest and most well-known computer network in the world
Individuals connect to the Internet using an Internet service provider (ISP)
World Wide Web: One resource (a vast collection of Web pages) available through the Internet
Web sites contain Web pages stored on Web servers
Web pages viewed using a Web browser (Internet Explorer, Safari, Firefox, Opera, etc.
A wide variety of information is available through the Web

111. IP Addresses and Domain Names
IP addresses are numeric and unique
Domain Names: Correspond to IP addresses
Top-level domains (TLDs)
identifies type of organization
or its location

112. Uniform Resource Locators (URLs)

113. E-Mail Addresses E-mail addresses consist of:
Username: A persons’ identifying name for a particular domain
symbol
Domain name for the computer that will be handling the person’s (mail server)
Pronouncing Internet addresses

114. Computers and Society
The vast improvements in technology over the past decade have had a distinct impact on daily life, both at home and at work
Many benefits of a computer-oriented society
Also risks
Computer viruses
Identity theft and phishing
Privacy issues
Differences in online communications
The anonymity factor
Information integrity (not all information on the Internet is accurate)

115. Foundations of Business Intelligence: Databases and Information Management

116. File organization concepts
Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
Organizing Data in a Traditional File Environment
File organization concepts
Computer system uses hierarchies
Field: Group of characters
Record: Group of related fields
File: Group of records of same type
Database: Group of related files
Record: Describes an entity
Entity: Person, place, thing on which we store information
Attribute: Each characteristic, or quality, describing entity
E.g. Attributes Date or Grade belong to entity COURSE

117. The Data Hierarchy Management Information Systems Figure 6-1
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
Organizing Data in a Traditional File Environment
The Data Hierarchy
A computer system organizes data in a hierarchy that starts with the bit, which represents either a 0 or a 1. Bits can be grouped to form a byte to represent one character, number, or symbol. Bytes can be grouped to form a field, and related fields can be grouped to form a record. Related records can be collected to form a file, and related files can be organized into a database.
Figure 6-1

118. Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
Organizing Data in a Traditional File Environment
Problems with the traditional file processing (files maintained separately by different departments)
Data redundancy and inconsistency
Data redundancy: Presence of duplicate data in multiple files
Data inconsistency: Same attribute has different values
Program-data dependence:
When changes in program requires changes to data accessed by program
Lack of flexibility
Poor security
Lack of data sharing and availability

119. Traditional File Processing
Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
Organizing Data in a Traditional File Environment
Traditional File Processing
The use of a traditional approach to file processing encourages each functional area in a corporation to develop specialized applications and files. Each application requires a unique data file that is likely to be a subset of the master file. These subsets of the master file lead to data redundancy and inconsistency, processing inflexibility, and wasted storage resources.
Figure 6-2

120. Database management system:
Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
The Database Approach to Data Management
Database:
Collection of data organized to serve many applications by centralizing data and controlling redundant data
Database management system:
Interfaces between application programs and physical data files
Separates logical and physical views of data
Solves problems of traditional file environment
Controls redundancy
Eliminated inconsistency
Uncouples programs and data
Enables central management and security

121. Hierarchical and Network DBMS: Older systems
Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
The Database Approach to Data Management
Hierarchical and Network DBMS: Older systems
Hierarchical DBMS: Models one-to-many relationships
Network DBMS: Models many-to-many relationships
Both less flexible than relational DBMS and do not support ad hoc, natural language

122. Object-Oriented DBMS (OODBMS)
Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
The Database Approach to Data Management
Object-Oriented DBMS (OODBMS)
Stores data and procedures as objects
Capable of managing graphics, multimedia, Java applets
Relatively slow compared with relational DBMS for processing large numbers of transactions
Hybrid object-relational DBMS: Provide capabilities of both OODBMS and relational DBMS

123. Capabilities of Database Management Systems
Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
The Database Approach to Data Management
Capabilities of Database Management Systems
Data definition capability: Specifies structure of database content, used to create tables and define characteristics of fields
Data dictionary: Automated or manual file storing definitions of data elements and their characteristics
Data manipulation language: Used to add, change, delete, retrieve data from database
Structured Query Language (SQL)
Microsoft Access user tools for generation SQL
Also: Many DBMS have report generation capabilities for creating polished reports (Crystal Reports)

124. Database warehouses Management Information Systems Data warehouse:
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
Using Databases to Improve Business Performance and Decision Making
Database warehouses
Data warehouse:
Stores current and historical data from many core operational transaction systems
Consolidates and standardizes information for use across enterprise, but data cannot be altered
Data warehouse system will provide query, analysis, and reporting tools
Data marts:
Subset of data warehouse with summarized or highly focused portion of firm’s data for use by specific population of users
Typically focuses on single subject or line of business

125. Business Intelligence:
Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
Using Databases to Improve Business Performance and Decision Making
Business Intelligence:
Tools for consolidating, analyzing, and providing access to vast amounts of data to help users make better business decisions
E.g. Harrah’s Entertainment analyzes customers to develop gambling profiles and identify most profitable customers
Principle tools include:
Software for database query and reporting
Online analytical processing (OLAP)
Data mining

126. Business Intelligence
Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
Using Databases to Improve Business Performance and Decision Making
Business Intelligence
A series of analytical tools works with data stored in databases to find patterns and insights for helping managers and employees make better decisions to improve organizational performance.
Figure 6-14

127. Data mining: Management Information Systems
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
Using Databases to Improve Business Performance and Decision Making
Data mining:
More discovery driven than OLAP
Finds hidden patterns, relationships in large databases
Infers rules to predict future behavior
The patterns and rules are used to guide decision making and forecast the effect of those decisions
Popularly used to provide detailed analyses of patterns in customer data for one-to-one marketing campaigns or to identify profitable customers.
Less well known: used to trace calls from specific neighborhoods that use stolen cell phones and phone accounts