Management Information Systems

Management Information Systems
Antoine HARFOUCHE, PHD

Dr Antoine Harfouche Ass. Professor at Paris-Nanterre La Defense University. PhD in Information Systems from Paris-Dauphine with collaboration with Georgia State University. Invited Professor at Indiana University and GSU. Antoine favors quantitative research approach to study the contextual and cultural issues in IS adoption and ICT for development. He has served as : Chair of IBIMA 2010 in Turkey, Track co-Chair of Culture and Tourism at MCIS 2011 Cyprus, Track Co-Chair Digital Divide and E-Government at MCIS 2010, Track Co-Chair of ICT for greater development impact MCIS 2014, Program Chair for ICTO2015 Reviewer for the Journal IT and People and RAM

INFORMATION SYSTEMS IN BUSINESS TODAY
Context and scope INFORMATION SYSTEMS IN BUSINESS TODAY

Business and social problems

Complex Social Problems
Wicked problem“ describes a problem that is difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognize. The term "wicked" is used to denote resistance to resolution, rather than evil. Moreover, because of complex interdependencies, the effort to solve one aspect of a wicked problem may reveal or create other problems

Wicked Problems

Shared value = Social Value + Economical value
Solving CS problems through Shared Value offered by ICT The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center.

Using ICT to create Shared Value
Using IS to create a SV Using ICT to create Shared Value

The aims of this course The Management Information Systems course aims to understand the evolution of information systems, to explain the strategic role of information systems as a business enabler. It identifies and explains the impact of information systems applications and emerging technologies on business models and managerial decision making in an exciting and interactive manner. The course also evaluates the fit between the organization’s strategy and structure, and the information systems architecture and applications. It interprets the interaction between technologies, employees, managers, customers, processes, data, infrastructure, suppliers, business partners, and environment in a specific organization. Finally, this course seeks to understand the ethical, security, and privacy challenges of information systems.

Technology A technology is a process by which inputs are converted to an output. Exp: A computer, a projector, electricity, and software are being combined to produce this lecture.

Information Technology
What is Technology? Information Technology Gateway To Technology Unit 1 – Lesson 1.1 – What is Engineering? Information Technology allows us to send signals around the world. Examples Internet, television, satellite, GPS, cell phones Information Technology is the process of gathering and storing data to be used in various forms. Provides streamlined access to vast sources of information Allows us to produce more accurate forms of communication Includes expanded resource choices Enables us to retrieve data in seconds

IS and IT IT/ICT refers specifically to technology, essentially hardware, software and telecommunications networks. Tangible (e.g. servers, PCs, routers, cables), and Intangible (e.g. software) IT/ICT facilitates the acquisition, processing, storing, delivery and sharing of information & other digital content. IS – the means by which people & organizations, utilizing technology, gather, process, store, use & disseminate information (UK Academy of ISs) Some IS are totally automated by IT. IS ≠ IT

COURSE CONTENT 3d and 4th sessions (1h30 hours each) (5% FG x 2)
Case study A: How FedEx competes globally with IT Case study B : Sinosteel Strengthens Business Management with ERP Applications 6th and 7th sessions (1h30 hours each) (10% FG) Case study C IT and Geo-Mapping help a Small Business Succeed - Tea Case study D FreshDirect uses BI to manage its Online grocery 9th and 10th sessions (1h30 hours each) (10% FG) Case study F NBA competing on global delivery Case study E Data Mining for Terrorist and Innocents

11th and 12th sessions (3 hours each ) Individual final exam (60% FG)
COURSE CONTENT 11th and 12th sessions (3 hours each ) Projects presentations (10% of the FG) Teamwork 10% of the final grade 3-4 people per team 5 – 10 pages report 15’ team presentation 5’ questions Individual final exam (60% FG)

Introduction to Information System: Information System Does Matter
The information age IS and management Foundations of Business Intelligence and Enhancing Decision-Making IS architecture IS and Operational excellence Key System Applications for the Digital Age E-Commerce: the revolution is just beginning Internet and New business models Web strategies

Mobile commerce and mobile applications: Past, present, and future
New devices, new OS, marketplaces How to design an app Social networks and e-communities revolution Sharing personal data How to cerate an e-community Social network optimization Working with open data and Big data Theoretical of open data Implementation in modern world The explosion of unstructured data Data manipulation, storage and analyses

ICT4D: Technology and complex social problems (ex poverty)
Technology answer to alleviate poverty Case studies Human identify influenced by mass communications: the future of storytelling The collapse of distance Instant information Privacy Information retrieval Effective project management Essentials of project management Case study IS Challenges and Cyberlaw: Ethical, Social, security & globalization Issues New legal issues in cyberspace The politics of piracy © Pearson Education 2012

Gaming industry: processes combined with creativity
Engineering and arts Serious versus casual games Tools to systematize creativity and innovation thoughts Development models Digital activism Civic engagement and political activism in the information age Internet mobilization Case studies Start-up strategies Intersection between business and information Develop new ventures centred on emerging IT © Pearson Education 2012

INFORMATION SYSTEMS IN BUSINESS TODAY
Introduction INFORMATION SYSTEMS IN BUSINESS TODAY Chapters 1 and 3 in the course Text Book

CHAPTER 1: INFORMATION IN BUSINESS SYSTEMS TODAY
Learning Objectives Define an information system and describe its managerial, organizational, and technological components. Explain why information systems are so essential in business today. Understand the effects of information systems on business and their relationship to globalization. Students may not know exactly what is meant by globalization or may have an incomplete understanding of the term. You might ask students what they think it means. Potential answers could include: reduction of economic and cultural advantages of developed countries, increased number of companies with operations in multiple countries worldwide, and increased reliance on imports and exports of goods (and jobs). Globalization will be discussed in later slides as well.

Technology is everywhere

From Putting-Out to factory
Technology is changing companies, society and humains From Putting-Out to factory Putting out Steam engine Factory

From factory to virtual company
IS

What is an information system (IS)?
Let us define IS What is an information system (IS)? What is its impact on organizations?

Perspectives on Information Systems Information Systems Are More Than Computers 2 1 These three themes (management, organizations, and technology) will reappear throughout the book. Understanding the interaction between these factors and information systems is known as information system literacy. Knowing how to optimize the relationship between technology, organizations, and management is the purpose of this book and course. 3

Perspectives on Information Systems Technological 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 1 Information technology is at the heart of information systems. While organization and management are important too, it’s the technology that enables the systems and the organizations and managers who use the technology. The distinction between the Internet and intranets & extranets has to do with their scope. Intranets are private networks used by corporations and extranets are similar except that they are directed at external users (like customers and suppliers). In contrast, the Internet connects millions of different networks across the globe. Students may not immediately understand this distinction.

Perspectives on Information Systems Technological dimension Data and Information Emphasize the distinction between information and data. You could, for example, ask several students to list their ages and write the numbers on one side of the board – then you could calculate the average age of those students on the other side, oldest student, youngest student, and so forth, to illustrate the difference between raw data and meaningful information. 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.

Technological dimension

CHAPTER 3: INFORMATION SYSTEMS, ORGANIZATIONS, AND STRATEGY
2 Organizational dimension of the Information Systems Competitive advantage can not be created just by having the best technology. People must accept it and used it in a clever and strategic way. This concept was briefly discussed in Chapter 1. Figure 1-2 and 1-3 as well as the figure on the next slide, 3-1, display this interdependent relationship graphically.

Organizations and Information Systems Features of organizations Use of hierarchical structure Accountability, authority in system of impartial decision making Adherence to principle of efficiency Routines and business processes Organizational politics, culture, environments and structures You could ask students to envision what would happen to an organization that did not use a hierarchical structure (would anything get done?), did not adhere to the principle of efficiency (would they provide any good or service worth using at an affordable price?), etc.

How Information Systems Impact Organizations and Business Firms FLATTENING ORGANIZATIONS Information systems can reduce the number of levels in an organization by providing managers with information to supervise larger numbers of workers and by giving lower-level employees more decision-making authority. Ask students to explain some of the benefits of the flattened organization as opposed to the more complicated hierarchy in the top of the diagram. Information travels through fewer levels to its intended recipients; there are fewer managers, so agency costs are smaller, and firms can act faster (less decision delay).

Social business © Pearson Education 2012

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. Emphasize the relationship between the primary and support activities of this firm and explain how information systems are critical to the success of each activity.

Perspectives on Information Systems The Business Information Value Chain The information value chain is one way to visualize the relationship between information activities, business processes, and management activities. You could also ask students if they could imagine any reason to create an information system besides profitability or strategic positioning (it’s not likely that they will think of one, which will prove the point). One reason to create a system that is not primarily profit oriented is to meet the information reporting requirements of government and other authorities. From a business perspective, information systems are part of a series of value-adding activities for acquiring, transforming, and distributing information that managers can use to improve decision making, enhance organizational performance, and, ultimately, increase firm profitability.

Using Information Systems to Achieve Competitive Advantage 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 Explain that a value web extends beyond the boundaries of an individual firm and represents the coordination of value chains across multiple independent firms. A value web is flexible and adapts to changes in supply and demand and changing market conditions.

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. Ask students why a model like the one displayed in the figure might be more likely to adapt quickly to changes in supply and demand. Also emphasize the networking between the different segments of the value web.

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 Examples of firms that use this type of strategy to achieve an advantage are eBay and iVillage. Many other companies are following suit in using a network-based strategy – can students name any? eBay, iVillage, and social networking firms like Facebook, are based on networks of millions of users. These companies have used the Web and Internet communication tools to build communities. The more people who join these communities, the more benefit members receive.

Using Information Systems to Achieve Competitive Advantage 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: Marginal cost of adding new participant almost zero, with much greater marginal gain Value of community grows with size Value of software grows as installed customer base grows Explain the difference between these two schools of economics. What aspect of network economics allows value to continue to increase with the size of the community?

The Role of Information Systems in Business Today Virtual company 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 Time shifting and space shifting are connected to globalization. You could ask students to explain why a digital firm is more likely to benefit from globalization than a traditional firm. One answer is that by allowing business to be conducted at any time (time shifting) and any place (space shifting), digital firms are ideally suited for global operations which take place in remote locations and very different time zones.

Using Information Systems to Achieve Competitive Advantage 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 Explain to students that companies like this are ‘virtual’ because they do not actually own any factories, machines, or other similar infrastructure. Instead, they offer a series of services, aided by information systems and uninhibited by geographical boundaries.

Virtual company

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 Wal-Mart’s order entry and inventory management 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 help them become profitable niche players in larger ecosystems Can students see the similarities between business ecosystems and value webs? Can they appreciate the key difference (that business ecosystems extend across industries as opposed to just firms within the same industry)?

Perspectives on Information Systems 3 Management dimension of information systems Managers set organizational strategy for responding to business challenges In addition, managers must act creatively: Creation of new Business models Occasionally re-creating the organization How might information systems assist managers in the development of new products and services? What is meant by re-creating the organization? Why do organizations need to be continually re-created? The answer is that they quickly become obsolete unless they continue to change. Ask students to help you list some organizations that have recently failed, or are about to fail.

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 Here you can make a list of five well-known firms and then analyze with students the major thrust of their strategy. Wal-Mart is a good example to start with because of its emphasis on low-cost leadership.

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 Examples: Wal-Mart Product differentiation Enable new products or services, greatly change customer convenience and experience Examples: Google, Nike, Apple Do students believe it is possible to design information systems that focus both on low-cost leadership and product differentiation? Some may say it is with sufficient planning and innovation; perhaps a new product is even cheaper to produce than older ones. Some may say that the investment in innovation required for product differentiation precludes that firm from maintaining low-cost leadership.

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 Example: Hilton Hotels Strengthen customer and supplier intimacy Use information systems to develop strong ties and loyalty with customers and suppliers; increase switching costs Example: Netflix, Amazon You could ask students to provide other examples from their own experience of companies that exemplify strong focus on market niche as well as excellent customer and supplier intimacy.

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 Do students believe it is easier or harder to gain a competitive advantage via the Internet as opposed to more traditional means? Table 3-5 describes the impact of the Internet on various competitive forces.

Conclusion

Conclusion Investing in information technology does not guarantee good returns Considerable variation in the returns firms receive from systems investments Factors: Adopting the right business model Investing in complementary assets (organizational and management capital) Connect this slide to the previous slide. Many firms make significant investments in IT for very little benefit to the bottom line. Discuss why companies experience a wide variety of outcomes in their efforts to invest in IT. Consider the factors we use in this book: organizational and management factors. © Pearson Education 2012

Perspectives on Information Systems Variation in Returns On Information Technology Investment Although, on average, investments in information technology produce returns far above those returned by other investments, there is considerable variation across firms. Emphasize that each quadrant of the graph represents a different type of firm. Quadrant 1 represents firms that invest much less in IT but still receive strong returns. Quadrant 2 represents firms that invest a great deal in IT and receive a great deal in returns. Quadrant 3 represents firms that invest much less in IT and receive poor returns. Quadrant 4 represents firms that invest a great deal in IT but receive poor returns. Ask students where they want their firms to show up? The purpose of the course and book is to show students how to end up in top quadrant (2). © Pearson Education 2012

The Role of Information Systems in Business Today The Interdependence Between Organizations and Information Technology The basic point of this graphic is that in order to achieve its business objectives, a firm will need a significant investment in IT. Going the other direction (from right to left), having a significant IT platform can lead to changes in business objectives and strategies. Emphasize the two-way nature of this relationship. Businesses rely on information systems to help them achieve their goals; a business without adequate information systems will inevitably fall short. But information systems are also products of the businesses that use them. Businesses shape their information systems and information systems shape businesses. In contemporary systems 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.

The Role of Information Systems in Business Today How information systems are transforming business Increased business use of Web 2.0 technologies Cloud computing, mobile digital platform allow more distributed work, decision-making, and collaboration Globalization opportunities Internet has drastically reduced costs of operating on global scale Presents both challenges and opportunities New federal security and accounting laws that require companies to store for 5 years have spurred the growth of digital information, which is increasing at a rate of 5 exabytes annually. Students may be surprised to learn that 5 exabytes of data is equivalent to 37,000 Libraries of Congress. Ask the students to think about what difference it makes to the world economy, or the U.S. economy, if global operations become much less expensive? What are the challenges to American suppliers of goods and services, and to labor? © Pearson Education 2012

The Role of Information Systems in Business Today Information Technology Capital Investment Emphasize to students that total investment is over one trillion dollars in 2010, and that over 550 billion dollars of that was invested in information technology. You could ask them why it is that the percentage of total investment devoted to IT has increased so much since 1980? Other kinds of capital investment are machinery and buildings. Why would firms increase IT investment faster than machinery and buildings. The answer is capital substitution: the price of IT capital has been falling exponentially, while the price of machine and buildings has been growing at slightly more than the rate of inflation. Wherever possible, firms would much rather invest in more IT than machinery or buildings because the returns on the investment are greater. Information technology capital investment, defined as hardware, software, and communications equipment, grew from 32 percent to 52 percent of all invested capital between 1980 and 2009.

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 New products, services, and business models Customer and supplier intimacy Improved decision making Competitive advantage Survival In the Ponsse opening case, the UPS Interactive Session later in the chapter, and with many of the Interactive Sessions and opening cases in the book, it will be useful to ask students to explain how various information systems succeeded or failed in achieving the six strategic business objectives. For example, in the Ponsse case, information systems helped the company communicate more effectively with workers and clients and offer new services. You might ask the students to think about some other business objectives and think about how IT might help firms achieve them. For instance, speed to market is very important to firms introducing new products. How can IT help achieve that objective?

- Websites: Articles: Carr, N.G. (2003). “ IT Doesn’t Matter”. Harvard Business, Review. 3566, pp. 41–49. Letters to the Editor (2003). “Does IT Matter? An HBR debate”. Harvard Business Review. Web exclusive:

Management Information Systems

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