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Ch 1.pdf
1.
Copyright © 2018
Pearson Education Ltd. Management Information Systems: Managing the Digital Firm Fifteenth edition Chapter 1 Information Systems in Business Today 12/5/2022 1
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Copyright © 2018
Pearson Education Ltd. Learning Objectives • 1-1 How are information systems transforming business, and why are they so essential for running and managing a business today? • 1-2 What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? • 1-3 What academic disciplines are used to study information systems, and how does each contribute to an understanding of information systems? 12/5/2022 2 2
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Pearson Education Ltd. Video Cases • Case 1: Business in the Cloud: Facebook and eBay Data Centers • Case 2: UPS Global Operations with the DIAD • Instructional Video: Tour IBM’s Raleigh Data Center 12/5/2022 3 3
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Pearson Education Ltd. 4 Rugby Football Union Tries Big Data (1 of 2) • Problem – Improving fan engagement through Big Data. • Solutions – Provide data visualization and real-time statistics to draw in fans. – Provide tactical insights to players and coaches that will improve match play. 12/5/2022 4
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Pearson Education Ltd. 5 Rugby Football Union Tries Big Data (2 of 2) • Rugby Football Union uses TryTracker to capture and analyze Big Data that will be useful to both fans and players. • Demonstrates IT’s role in increasing value and revenue in any business. • Illustrates the potential for technology to improve customer experience. 12/5/2022 5
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Pearson Education Ltd. Introduction Information systems and technologies are transforming the global business environment. In 2015, global firms and governments spent about €3.4 trillion on information systems hardware, software, and telecommunications equipment. In addition, they spent another €544 billion on business and management consulting and services much of which involves redesigning firms’ business operations to take advantage of these new technologies. In fact, most of the business value of IT investment derives from these organizational, management, and cultural changes inside firms. It is not simply the technology that is changing. 12/5/2022 6 6
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Pearson Education Ltd. How Information Systems Are Transforming Business – Mobile digital platform – Systems used to improve customer experience, respond to customer demand, reduce inventories, and more – Growing online newspaper readership – Expanding e-commerce and Internet advertising – New federal security and accounting laws 12/5/2022 7 7
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Pearson Education Ltd. How Information Systems Are Transforming Business Some 2.8 billion people worldwide have smartphones (50 percent of the world’s population) 1.26 billion use their smartphones for Internet access. More than 1 billion people use tablet computers, about 15 percent of the global population. An estimated 2.34 billion people now use social networks, with Facebook accounting for 1.7 billion people alone. Messaging services like WhatsApp, Facebook Messenger, and Twitter collectively have over 2 billion monthly users. 12/5/2022 8 8
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Pearson Education Ltd. How Information Systems Are Transforming Business Smartphones, social networking, texting, e-mailing, and webinars have all become essential tools of business because that’s where your customers, suppliers, and colleagues can be found. June 2015, more than 150 million businesses worldwide had dot-com Internet sites registered ( Curtis, 2015 ). In 2016 1.62 billion Internet users will purchase online, generating $1.9 billion in sales. In 2015, FedEx moved about 11.5 million packages daily in 220 countries and territories around the world, mostly overnight, and the United Parcel Service (UPS) moved more than 18 million packages daily. 12/5/2022 9 9
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Pearson Education Ltd. How Information Systems Are Transforming Business In comparison with the 2.7 billion people who read a print newspaper, online newspapers are read by one billion people, growing at 10 percent annually, far faster than print newspapers (WPT, 2016; Conaghan, 2015). An estimated 1.7 billion people watch videos and feature films online, 100 million post to a blog everyday, and 250 million read a blog, creating an explosion of new writers and new forms of customer feedback that did not exist five years ago. Global e-commerce and Internet advertising continue to expand. Google’s online ad revenues surpassed €80 billion in 2016, and Internet advertising continues to grow at more than 20 percent a year, reaching more than €194 billion in revenues in 2016. That’s about one-third of all advertising in the world. 12/5/2022 10 10
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Pearson Education Ltd. Figure 1.1: Information Technology Capital Investment 12/5/2022 11 11
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Pearson Education Ltd. What’s New In Management Information Systems (1 of 2) • Technology – Cloud computing – Big data and the Internet of Things (IoT) – Mobile digital platform • Management – Online collaboration and social networking software – Business intelligence – Virtual meetings 12/5/2022 12 12
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Pearson Education Ltd. What’s New In Management Information Systems (2 of 2) • Organizations – Social business – Telework – Co-creation of business value 12/5/2022 13 13
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Pearson Education Ltd. What’s New In Management Information Systems 12/5/2022 14 14
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Pearson Education Ltd. What’s New In Management Information Systems 12/5/2022 15 15
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Pearson Education Ltd. What’s New In Management Information Systems 12/5/2022 16 16
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Pearson Education Ltd. What’s New In Management Information Systems A continuing stream of information technology innovations is transforming the traditional business world. Examples include the emergence of cloud computing, the growth of a mobile digital business platform based on smartphones and tablet computers, big data, business analytics, and the use of social networks by managers to achieve business objectives. For instance, the emergence of online video services like Netflix for streaming, Apple iTunes, Amazon, and many others for downloading video has forever changed how premium video is distributed and even created. 12/5/2022 17 17
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Pearson Education Ltd. What’s New In Management Information Systems Netflix in 2016 attracted more than 75 million subscribers worldwide to what it calls the “Internet TV” revolution. Netflix has moved into premium TV show production with 30 original shows such as House of Cards and Orange Is the New Black, challenging cable and broadcast producers of TV shows, and potentially disrupting cable network dominance of TV show production. Apple’s iTunes now accounts for 67 percent of movie and TV show downloads and has struck deals with major Hollywood studios for recent movies and TV shows. A growing trickle of viewers are unplugging from cable and using only the Internet for entertainment. 12/5/2022 18 18
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Pearson Education Ltd. What’s New In Management Information Systems E-commerce generated about $600 billion in revenues in 2016 and is estimated to grow to nearly $900 billion by 2020. E-commerce is changing how firms design, produce, and deliver their products and services. Facebook and other social networking sites such as YouTube, Twitter, and Tumblr along with Netflix, Apple Beats music service, and many other media firms exemplify the new face of e-commerce in the twenty-first century. They sell services. 12/5/2022 19 19
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Pearson Education Ltd. 20 Interactive Session: Management ( Report Every Student have different Csae) • Class Discussion – What kinds of applications are described here? What business functions do they support? How do they improve operational efficiency and decision making? – Identify the problems that businesses in this case study solved by using mobile digital devices. – What kinds of businesses are most likely to benefit from equipping their employees with mobile digital devices such as iPhones and iPads? – One company deploying iPhones has said, “The iPhone is not a game changer, it's an industry changer. It changes the way that you can interact with your customers” and “with your suppliers.” Discuss the implications of this statement. 12/5/2022 20
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Pearson Education Ltd. Globalization Challenges and Opportunities: A Flattened World • Internet has drastically reduced costs of operating on global scale • Increases in foreign trade, outsourcing • Presents both challenges and opportunities 12/5/2022 21 21
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Copyright © 2018
Pearson Education Ltd. The Emerging Digital Firm • In a 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 12/5/2022 22 22
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Pearson Education Ltd. Strategic Business Objectives of Information Systems (1 of 2) • Growing interdependence between: – Ability to use information technology and – Ability to implement corporate strategies and achieve corporate goals 12/5/2022 23 23
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Pearson Education Ltd. Strategic Business Objectives of Information Systems (2 of 2) • Firms invest heavily in information systems to achieve six strategic business objectives: 1. Operational excellence 2. New products, services, and business models 3. Customer and supplier intimacy 4. Improved decision making 5. Competitive advantage 6. Survival 12/5/2022 24 24
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Pearson Education Ltd. Figure 1.2: The Interdependence Between Organizations and Information Systems 12/5/2022 25 25
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Pearson Education Ltd. Operational Intelligence • Improvement of efficiency to attain higher profitability • Information systems, technology an important tool in achieving greater efficiency and productivity • Walmart’s Retail Link system links suppliers to stores for superior replenishment system 12/5/2022 26 26
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Pearson Education Ltd. New Products, Services, and Business Models • Business model: describes how company produces, delivers, and sells product or service to create wealth • Information systems and technology a major enabling tool for new products, services, business models – Examples: Apple’s iPad, Google’s Android OS, and Netflix 12/5/2022 27 27
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Pearson Education Ltd. Customer and Supplier Intimacy • Serving customers well leads them to return, increasing revenue and profits – Example: High-end hotels that use computers to track customer preferences and then monitor and customize the environment • Intimacy with suppliers allows them to provide vital inputs, which lowers costs – Example: JCPenney’s information system which links sales records to contract manufacturer 12/5/2022 28 28
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Copyright © 2018
Pearson Education Ltd. Improved Decision Making • Without accurate information: – Managers must use forecasts, best guesses, luck – Results in: Overproduction, underproduction Misallocation of resources Poor response times – Poor outcomes raise costs, lose customers • Example: Verizon’s web-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, and so on 12/5/2022 29 29
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Pearson Education Ltd. Competitive Advantage • Delivering better performance • Charging less for superior products • Responding to customers and suppliers in real time • Examples: Apple, Walmart, UPS 12/5/2022 30 30
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Pearson Education Ltd. Survival • Information technologies as necessity of business • Industry-level changes – Example: Citibank’s introduction of ATMs • Governmental regulations requiring record- keeping – Examples: Toxic Substances Control Act, Sarbanes-Oxley Act – Dodd-Frank Act 12/5/2022 31 31
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Copyright © 2018
Pearson Education Ltd. What Is an Information technology? Information technology (IT) consists of all the hardware and software that a firm needs to use in order to achieve its business objectives. IT includes not only computer machines, storage devices, and handheld mobile devices but also software, such as the Windows or Linux operating systems, the Microsoft Office desktop productivity suite, and the many thousands of computer programs that can be found in a typical large firm. “Information systems” are more complex and can be best understood by looking at them from both a technology and a business perspective. 12/5/2022 32 32
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Copyright © 2018
Pearson Education Ltd. What Is an Information System? (1 of 3) An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. In addition to supporting decision making, coordination, and control, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products. 12/5/2022 33 33
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Copyright © 2018
Pearson Education Ltd. What Is an Information System? (1 of 3) Information systems contain information about significant people, places, and things within the organization or in the environment surrounding it. By information we mean data that have been shaped into a form that is meaningful and useful to human beings. Data, in contrast, are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use. 12/5/2022 34 34
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Copyright © 2018
Pearson Education Ltd. What Is an Information System? (1 of 3) • Information system – Set of interrelated components – Collect, process, store, and distribute information – Support decision making, coordination, and control • Information vs. data – Data are streams of raw facts – Information is data shaped into meaningful form 12/5/2022 35 35
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Pearson Education Ltd. Figure 1.3: Data and Information 12/5/2022 36 36
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Pearson Education Ltd. What Is an Information System? (2 of 3) • Three activities of information systems produce information organizations need Input: Captures raw data from organization or external environment Processing: Converts raw data into meaningful form Output: Transfers processed information to people or activities that use it 12/5/2022 37 37
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Pearson Education Ltd. What Is an Information System? (3 of 3) • Feedback – Output is returned to appropriate members of organization to help evaluate or correct input stage • Computer/computer program vs. information system – Computers and software are technical foundation and tools, similar to the material and tools used to build a house 12/5/2022 38 38
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Pearson Education Ltd. Figure 1.4: Functions of an Information System 12/5/2022 39 39
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Pearson Education Ltd. Dimensions of Information Systems • Organizations • Management • Technology 12/5/2022 40 40
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Pearson Education Ltd. Figure 1.5: Information Systems Are More Than Computers 41
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Pearson Education Ltd. Dimensions of Information Systems: Organizations (1 of 2) • Hierarchy of authority, responsibility – Senior management – Middle management – Operational management – Knowledge workers – Data workers – Production or service workers 12/5/2022 42 42
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Pearson Education Ltd. Figure 1.6: Levels in a Firm 12/5/2022 43 43
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Pearson Education Ltd. Dimensions of Information Systems: Organizations (2 of 2) • Separation of business functions – Sales and marketing – Human resources – Finance and accounting – Manufacturing and production • Unique business processes • Unique business culture • Organizational politics 12/5/2022 44 44
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Pearson Education Ltd. Dimensions of Information Systems: Organizations • 12/5/2022 45 45
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Pearson Education Ltd. Dimensions of Information Systems: Management • 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 12/5/2022 46 46
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Pearson Education Ltd. Dimensions of Information Systems: Technology • 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 12/5/2022 47 47
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Pearson Education Ltd. 48 Interactive Session: Technology: ( Report Every Student have different Csae) • Class Discussion – What technologies are used by JurongHealth? What purpose do they serve? – Search the web for RFID. Suggest an example of using RFID for locating and tracking people. – What information systems are implemented by JurongHealth? Describe the input, processing, and output of any one such system. – Why are information systems important for JurongHealth? 12/5/2022 48
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Pearson Education Ltd. It Isn’t Just Technology: A Business Perspective on Information Systems (1 of 3) • Information system is instrument for creating value • Investments in information technology will result in superior returns –Productivity increases –Revenue increases –Superior long-term strategic positioning 12/5/2022 49 49
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Pearson Education Ltd. It Isn’t Just Technology: A Business Perspective on Information Systems (2 of 3) • Business information value chain – Raw data acquired and transformed through stages that add value to that information – Value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits • Business perspective – Calls attention to organizational and managerial nature of information systems 12/5/2022 50 50
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Pearson Education Ltd. It Isn’t Just Technology: A Business Perspective on Information Systems (3 of 3) • Investing in information technology does not guarantee good returns • There is considerable variation in the returns firms receive from systems investments • Factors – Adopting the right business model – Investing in complementary assets (organizational and management capital) 12/5/2022 51 51
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Pearson Education Ltd. Figure 1.7: The Business Information Value Chain 52
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Pearson Education Ltd. Figure 1.8: Variation in Returns on Information Technology 12/5/2022 53 53
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Pearson Education Ltd. Figure 1.9: Contemporary Approaches to Information Systems 12/5/2022 54 54
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Pearson Education Ltd. Technical Approach • Emphasizes mathematically based models • Computer science, management science, operations research 12/5/2022 55 55
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Pearson Education Ltd. Behavioral Approach • Behavioral issues (strategic business integration, implementation, etc.) • Psychology, economics, sociology 12/5/2022 56 56
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Pearson Education Ltd. Approach of This Text: Sociotechnical Systems (1 of 2) • Management information systems – Combines computer science, management science, operations research, and practical orientation with behavioral issues • Four main actors – Suppliers of hardware and software – Business firms – Managers and employees – Firm’s environment (legal, social, cultural context) 12/5/2022 57 57
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Pearson Education Ltd. Approach of This Text: Sociotechnical Systems (2 of 2) • Sociotechnical view – Optimal organizational performance achieved by jointly optimizing both social and technical systems used in production – Helps avoid purely technological approach 12/5/2022 58 58
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Pearson Education Ltd. Figure 1.10: A Sociotechnical Perspective on Information Systems 59
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