Transcript MIS 301 Information Systems in Organizations Dave Salisbury (email)

MIS 301
Information Systems in Organizations
Dave Salisbury
[email protected] (email)
http://www.davesalisbury.com/ (web site)
Oh, the places we’ll go!









What we’re going to be about this term
Basic assumptions & where we’ve come from
Why we invest in Information Systems & Information
Technology (IS&T)
Technology trends and how business is changing
Why study information systems & what are they
The “big picture”
Some implications of advancing information
technology innovation
How IS&T influences organizational strategy
Conclusions
History of IT&S

Early Days



Later



Automation
Accounting focus
Support business
Functional focus
Today


Empower business
Strategic & process focus
Views on the role and importance of
Information Systems
We have shaped up data processing
very nicely since the early 1990's.
We have developed many new
systems to support our operations .
As computing costs come down , we
expect that more systems will be
justified and implemented
IT is our top strategic concern, not
because it outweighs everything else,
but because we are unsure what to do
with it. Although we understand other
parts of our business strategy, IT
issues keep eluding us. We make
good technical decisions and our
systems work well but we can't seem
to grasp the bigger picture. Don’t
even ask about our e-business efforts.
Our information resources dept
makes a major contribution to
profitability. We expect our VP of
IT to provide ideas for improving
company performance just the
same way as we rely on sales,
manufacturing and engineering
executives for their contributions
Our IT manager does a fine job.
He handles all those technical
details no one else understands
quickly and without complaining.
We can always count on Charlie
Why We Invest in IS&T
Revenue
+
Strategic
Systems
+
Management
Support & Decision
Systems
IS&T
Investment
–
Operational
Systems
Profit
–
Costs
Trends in Technology





Cost-performance ratio of
chips keeps improving
(Moore’s Law)
Improving performance of
optical communication
networks
Increasing storage capacity
price performance
Object technology and selfcontained units of sharable
software
Emergence of networked
and distributed computing







Internet
Mobile Computing and MCommerce
Wireless networks
Pervasive Computing
Smart Devices
RFID
GPS
An Example of Digital Economy –
New Implementations



E-Business: The use of electronic
technologies to transact business.
Collaboration: People and Organizations
interact, communicate, collaborate and
search for information
Information Exchange: Storing,
processing and transmission of
information.
Digitization creates new opportunities




Digitization turns information into zeros &
ones
Digital information (be it text, audio, or video)
is more easily transmitted with no loss of
quality
Resulting is mixing of traditionally separated
businesses
This is most pronounced in information
intense businesses – once you have
information you can digitize it and move it
around with no quality loss to anywhere
Taking photos the “old” way







Buy film in a store
Load your camera
Take pictures
Take roll of film to store for processing
Pickup the film when ready
Select specific photos for enlargement
Mail to family and friends
Taking photos the “new” way

1st Generation Digital Photography


2nd Generation Digital Photography


Old economy except 6 and 7 were replaced by
using a scanner and emailing
Use a Digital Camera, no film, no processing
3rd Generation Digital Photography

Your Digital Camera is now your mobile phone, in
your binoculars or a palmtop computer
Business Models

A business model is a method of doing
business by which a company can generate
revenue to sustain itself. The model spells out
how the company adds value to create a
product or service.



Nokia makes and sells cell phones
A TV station provides free broadcasting. Its
survival depends on a complex model involving
advertisers and content providers.
Internet portals, such as Yahoo, also use a
complex business model.
Digital Age Business Models





Name-Your-Own Price
Reverse Auctions
Affiliate Marketing
E-Marketplaces and Exchanges
Electronic aggregation (buying groups)
Drivers Forcing Changes In Business
Models

Business Pressures




Environmental, organizational, and technological
Highly competitive business environment
Instable, unpredictable
Business Critical Response Activities




Companies need to react frequently and rapidly
Rapidly emerging threats and the opportunities
Defend from extant & potential future pressures
Exploit opportunities created by change
Why Study Information Systems?




You will be more effective in your chosen career if
you understand how successful information systems
are built, used, and managed.
You also will be more effective if you know how to
recognize and avoid unsuccessful systems and
failures.
According to the US Bureau of Labor Statistics, “Top
seven fastest growing occupations fall within IT or
computer related field”
Developing “Computer” Literacy will only enhance
your “Information” Literacy
Technology versus Systems

Technology




Computers
Telephones
Tools
Systems

Intelligent application of technology along
with people and procedures to do
something useful
IS Applications and Operations







Retail operations
Wholesale
Manufacturing
Human Resources
Marketing
Content management
…
IS in Sales & Marketing





Identify customers
Determine what
they want
Planning products
Advertising and
promoting products
Determine prices for
products






Contact customers
Maintain Customer
Relationships
Sell the product
Take the order
Follow-up on the
sale
Develop sales
forecasts
IS in Manufacturing





Computer-based control equipment and
machinery (e.g. robotics)
Design new products
Calculate amount & quantity of
products to produce
Assess & design new production
facilities
Generate work orders
IS in Purchasing





Which vendors
Quantity to purchase
Coop, rebate tracking
Handle delivery discrepancies
Generate the purchase order
IS in Finance




Financial Assets
Investment management
Banking
Long term budgets
IS in Accounting






Accounts Receivable
Disbursements
Payroll
Depreciation
Earned Coop and Rebates
General ledger
IS in Human Resources





Employee wages, salaries & benefits
Long term labor requirements
Tracking vacation, sick time, leaves
Track employee skills
Interview and review employees
What is a System?
Environment
Feedback
Signals
Feedback
Signals
Control
Signals
Control by
Management
Control
Signals
Input of
Raw Materials
Manufacturing
Process
Output of
Finished Products
System Boundary
Other Systems
What is an Information System?
System to Support a
Business Process
Feedback/Control
Input of
Data
Resources
(Forms)
Data
Processing
(Updates,
Queries)
Data Storage
Output of
Information
(Reports)
IS Components/Resources
System to Support a
Business Process
Input of
Data
Resources
(Forms)
Data
Processing
(Updates,
Queries)
Output of
Information
(Reports)
Network
People
Data Storage
Software
Data
Hardware
Other Systems
Systems Interact w/ Other Systems
The Inter-Networked Business
The Internet
Suppliers and Other Business Partners
Company Boundary
Extranets
Procurement, Distribution, and Logistics
Engineering &
Research
Manufacturing
and
Production
Accounting,
Finance, and
Management
Intranets
Advertising
Sales
Customer Service
Extranets
Consumer and Business Customers
The IS&T Big Picture




Creating, supporting and enhancing organizational
socio-technical systems
Leveraging the informational component of a
product, service, business process or business
relationship
Enable redesign of business processes
Business modeling



Data
Processes
Process & deliver information to decision-makers
Even More of the IS&T Big Picture

Processes, data & technology should be
secured against misuse



Individual lives are represented in the information
stored and processed by these systems
Increasingly inter-networked world, potential
exploits in one individual or organization’s systems
can translate into damage for other systems
To apply IT, one must understand it


Communications infrastructure and technology
standards
Evaluate current and emergent technologies
Some implications of IS&T

Information Asymmetry


Richness




The extent to which one party in an exchange
knows something the other doesn’t – this is being
reduced
Information content within a given time
Degree of customization
Dialog between provider & receiver
Reach

Number of people receiving information
Some more implications of IS&T

Big firms can work like small firms



Hotel information systems
High-performance farming
Small firms can work like big firms


Internet/Virtual Businesses
Limited need for Physical Facilities
Even more implications of IS&T

Strategic Advantage


If you’re first, a novel technology creates
an advantage
Strategic Necessity

Eventually, technology-based gains are lost
because they are easily replicable
Strategic Information Systems

Competitive Advantage



An advantage over competitors in some
measure such as cost, quality, or speed
A difference in the Value Chain Data
Improving Core Competency


Employee productivity
Operational efficiency
Information Technology
Supports Strategic Management




Innovative applications
Create innovative applications that provide
direct strategic advantage to organizations.
Competitive weapons
Information systems themselves are
recognized as a competitive weapon
Changes in processes
IT supports changes in business processes
that translate to strategic advantage
Links with business partners
IT links a company with its business partners
effectively and efficiently.
Porter’s Competitive Forces Model
Threat
Bargaining
Power
Bargaining
Power
Threat
Sample Competitive Strategies






Cost Leadership
Differentiation
Niche
Growth
Innovation
Alliance






Operational effectiveness
Customer-orientation
Time
Entry-barriers
Lock in customers or
suppliers
Increase switching costs
Information Technology
Supports Strategic Management




Cost reductions: IT enables companies to reduce
costs.
Relationships with suppliers and customers: IT can
be used to lock in suppliers and customers, or to
build in switching costs.
New products: A firm can leverage its investment in
IT to create new products that are in demand in the
marketplace.
Competitive intelligence: IT provides competitive
(business) intelligence by collecting and analyzing
information about products, markets, competitors,
and environmental changes
Competitive Assessment

Current Competitors





What drives them?
Actions & capabilities
Strengths &
weaknesses
Competitive intensity
Barriers to Entry



What are they?
Current basis for
competition?
How to build share?

Substitutes




What are they?
Are they increasing?
Are they really
substitutes?
Buyers & Suppliers


Who has power in
the transaction?
Who captures value
added for each part
of the value chain?
The Value Chain

Activities for acquisition, transformation & delivery of
products & services (primary)






Inbound logistics (inputs)
Operations (manufacturing and testing)
Outbound logistics (storage and distribution)
Marketing and sales
Service
Activities that support the creation of value but do
not themselves add value (support)




Infrastructure (e.g. accounting, finance, management)
Human resources
Technology development (R&D)
Procurement
The Value Chain
Critical Building Blocks

Information Intensity


Understanding Technology






Infrastructure
Standards
Essential Business Modeling


The extent to which a product, service, process or
relationship is comprised of information
Data Modeling
Process Modeling
Using Technology to reengineer business processes
Support for Decision-Making
Security of Systems and Data
Finally…

The rules of business haven’t changed





Profitability
Measures of firm strength
Customer service
Logistics
How we implement them has –
dramatically


Web-based businesses
Re-engineering based on IT