‎ he Role of

T
‎Information Systems
‎in Business

‎• Emerging mobile digital platform

1‎ - How information systems are

‎• Growing business use of “big data”
‎transforming business
‎• Growth in cloud computing

•‎ Internet has drastically reduced costs of

‎operating on global scale

‎2- Globalization opportunities ‎• Increases in foreign trade, outsourcing

‎• Presents both challenges and opportunities

I‎nformation technology capital investment,

‎defined as hardware, software, and
‎communications ‎ - Information Technology
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‎equipment, grew from 14 percent to 33 ‎Capital Investment
‎percent of all invested capital between 1999
‎and 2013.

•‎ Significant business relationships are

‎digitally enabled and mediated

‎ - In the emerging, fully digital

4 •‎ Core business processes are accomplished
‎firm: ‎through digital networks

‎• Key corporate assets are managed digitally

‎ - Digital firms offer greater

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‎• Time shifting, space shifting ‎flexibility in organization and
‎management

‎• Ability to use information technology and

‎ - Growing interdependence
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‎between: •‎ Ability to implement corporate strategies
‎and achieve corporate goals

I‎n contemporary systems there is a growing

‎interdependence between a firm’s
‎information systems and its business
‎capabilities. Changes in strategy, rules, and ‎ - The Interdependence Between
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‎business processes increasingly require
‎changes in hardware, software, databases,
‎Organizations and
‎and telecommunications. Often, what the ‎Information Technology:
‎organization would like to do
‎depends on what its systems will permit it to
‎do

•‎ Improvement of efficiency to attain higher

‎profitability
‎1. Operational Excellence:
•‎ Information systems, technology an
‎important tool in achieving greater efficiency
‎and productivity

‎describes how company produces, delivers,

‎• Business model:
‎and sells product or service to create wealth

•‎ Information systems and technology a

‎ .New products, services, and business
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‎major enabling tool for new products,
‎models:
‎services, business models

•‎ Examples: Apple’s iPad, Google’s Android

‎OS, and Netflix

•‎ Example: High-end hotels that use

•‎ Serving customers well leads to customers ‎computers to track customer preferences
‎returning, which raises revenues and profits. ‎and used to monitor and customize
‎environment
‎3. Customer and supplier intimacy:
‎• Example: JCPenney’s information system
•‎ Intimacy with suppliers allows them to
‎which links sales records to contract
‎provide vital inputs, which lowers costs.
‎manufacturer

•‎ Managers must use forecasts, best guesses,

‎luck

‎• Overproduction, underproduction
‎ - Firms invest in information
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‎systems in order to achieve six ‎• Without accurate information: ‎• Results in: ‎• Misallocation of resources
‎strategic business objectives:
‎• Poor response times

‎4. Improved Decision Making ‎• Poor outcomes raise costs, lose customers
‎1. Achieve operational excellence
•‎ Example: Verizon’s Web-based digital
‎2. Develop new products and services ‎dashboard to provide managers with real-
‎time data on customer complaints, network
‎performance, line outages, and so on
‎3. Attain customer intimacy and service
‎ he six strategic business
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‎objectives: ‎–Delivering better performance
‎4. Improve decision making
‎–Charging less for superior products
‎5. Promote competitive advantage
‎–Responding to customers and suppliers in
‎6. Ensure survival ‎real time
‎5.competitive advantage
–‎ Achieving any of the previous four
‎business objectives represents the
‎achievement of a competitive advantage as
‎well

‎– Examples: Apple, Walmart

•‎ Information technologies as necessity of

‎business

‎6. survival ‎• Industry-level changes

‎• Example: Citibank’s introduction of ATMs

‎ he study of information systems deals with

T
‎ - Contemporary Approaches to
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‎issues and insights contributed from
‎technical and behavioral disciplines ‎Information Systems

‎• Emphasizes mathematically based models

‎• Technical approach
•‎ Computer science, management science,
‎operations research

•‎ Behavioral issues (strategic business

‎integration, implementation, etc.)
‎• Behavioral approach
‎• Psychology, economics, sociology

•‎ Optimal organizational performance

‎achieved by jointly optimizing both social
‎and technical systems used in production
‎10- Studying Information Systems ‎• Sociotechnical view

‎• Helps avoid purely technological approach

•‎ Combines computer science, management

‎• Management Information Systems ‎science, operations research, and
‎practical orientation with behavioral issues

‎• Suppliers of hardware and software

I‎n a sociotechnical perspective, the
‎performance of a system is optimized when ‎• Business firms
‎both the technology and ‎• Four main actors
‎the organization mutually adjust to each ‎• Managers and employees
‎other until a satisfactory fit is obtained
•‎ Firm’s environment (legal, social, cultural
‎context)