Q-1: What is Information system?

Explain the role of information system in

Business today.

Information System:

From a technical perspective, an information system collects, stores, and disseminates

information from an organization’s environment and internal operations to support
organizational functions and decision making, communication, coordination, control,
analysis, and visualization. Information systems transform raw data into useful
information through three basic activities: input, processing, and output.

From a business perspective, an information system provides a solution to a problem or

challenge facing a firm and represents a combination of management, organization, and
technology elements.

Thus, MIS is-

1. MIS is mainly designed to take care of the needs of the managers in the
organization.
2. MIS aids in integrating the information generated by various departments of the
organization.
3. MIS helps in identifying a proper mechanism of storage of data that avoids the
unnecessary duplication of data.
4. MIS also helps in establishing mechanism to eliminate redundancies in data.
5. MIS as a system can be broken down into sub systems. This results in easy access
of data, accuracy of data and information. It helps in maintaining the consistency
of data.

THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

1. Information systems are transforming business

2. New in Management information systems
3. Challenges and opportunities of Globalization
4. The emerging digital firm
5. Strategic business objective of Information system.

1. Information Systems Are Transforming Business:

Information Systems are transforming Business by the following ways:

Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong

  E-mail, online conferencing, smart phones, and tablet computers have become
essential tools for conducting business.
 Information systems are the foundation of fast-paced supply chains.
 The Internet allows many businesses to buy, sell, advertise, and solicit
customer feedback online.
 Organizations are trying to become more competitive and efficient by digitally
enabling their core business processes and evolving into digital firms.
 The Internet has stimulated globalization by dramatically reducing the costs of
producing, buying, and selling goods on a global scale.
 New information system trends include the emerging mobile digital platform,
online software as a service, and cloud computing.

2. New in Management Information systems:

What makes management information systems the most exciting topic in business is the
continual change in technology, management use of the technology, and the impact on
business success. New businesses and industries appear, old ones decline, and successful
firms are those that learn how to use the new technologies.

a) Changes in the technology area: There are three interrelated changes in the
technology area:

(1) the emerging mobile digital platform,

(2) the growing business use of "big data," and
(3) the growth in “cloud computing,” where more and more business
software runs over the Internet.

IPhones, iPads, BlackBerrys, and Android tablets and smartphones are not just gadgets or
entertainment outlets. They represent new emerging computing platforms based on an
array of new hardware and software technologies.

b) Change in Management:

 Managers adopt online collaboration and social networking software to improve

coordination, collaboration, and knowledge sharing.
 More powerful data analytics and interactive dashboards provide real time
performance information to managers to enhance decision making.
 Managers adopt telepresence videoconferencing and Web conferencing
technologies to reduce travel time, and cost, while improving collaboration and
decision making.

Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong

c) Change in organization:

 Businesses use social networking platforms, including Facebook, Twitter, and

internal corporate social tools, to deepen interactions with employees, customers,
and suppliers. Employees use blogs, wikis, e-mail texting, and messaging to
interact in online communities.
 Telework gains momentum in the workplace.
 Sources of business value shift from products to solutions and experiences, and
from internal sources to networks of suppliers and collaboration with customers.

3. Challenges and opportunities of Globalization:

In 2005, journalist Thomas Friedman wrote an influential book declaring the world was
now “flat,” by which he meant that the Internet and global communications had greatly
reduced the economic and cultural advantages of developed countries.

Challenges:

a. Free labor movement.

b. Requirement of high skilled workforce.
c. Employment in information systems and the other service occupations is
expanding, and wages are stable.

Opportunities :

a. The emergence of the Internet into a full-blown international communications

system has drastically reduced the costs of operating and transacting on a
global scale.
b. Customers can now shop in a worldwide marketplace, obtaining price and
quality information reliably 24 hours a day.
c. Firms producing goods and services on a global scale achieve extraordinary
cost reductions by finding low-cost suppliers and managing production
facilities in other countries.

4. The emerging digital firm:

A digital firm is one in which nearly all of the organization’s significant business
relationships with customers, suppliers, and employees are digitally enabled and
mediated. Core business processes are accomplished through digital networks spanning
the entire organization or linking multiple organizations.
Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong
Business processes refer to the set of logically related tasks and behaviors that
organizations develop over time to produce specific business results and the unique
manner in which these activities are organized and coordinated.

Developing a new product, generating and fulfilling an order, creating a marketing plan,
and hiring an employee are examples of business processes, and the ways organizations
accomplish their business processes can be a source of competitive strength.

5. Strategic Business objective of information system:

There is a growing interdependence between a firm’s ability to use information

technology and its ability to implement corporate strategies and achieve corporate goals.

What a business would like to do in five years often depends on what its systems will be
able to do. Increasing market share, becoming the high-quality or low-cost producer,
developing new products, and increasing employee productivity depend more and more
on the kinds and quality of information systems in the organization. The more you
understand about this relationship, the more valuable you will be as a manager.

Specifically, business 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; and
6. survival.
Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong
Q-2: Why are businesses investing so much in Information system &
technology?

Business 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; and
6. survival.

1. Operational Excellence:

Businesses continuously seek to improve the efficiency of their operations in order to

achieve higher profitability. Information systems and technologies are some of the most
important tools available to managers for achieving higher levels of efficiency and
productivity in business operations, especially when coupled with changes in business
practices and management behavior.

Walmart, the largest retailer on earth, exemplifies the power of information systems
coupled with brilliant business practices and supportive management to achieve world
class operational efficiency.

2. New products, services and business models:

Information systems and technologies are a major enabling tool for firms to create new
products and services, as well as entirely new business models. A business model
describes how a company produces, delivers, and sells a product or service to create
wealth.

Today’s music industry is vastly different from the industry a decade ago. Apple Inc.
transformed an old business model of music distribution based on vinyl records, tapes,
and CDs into an online, legal distribution model based on its own iPod technology
platform.

3. Customer and Supplier Intimacy:

When a business really knows its customers, and serves them well, the customers
generally respond by returning and purchasing more. This raises revenues and profits.
Likewise with suppliers: the more a business engages its suppliers, the better the
suppliers can provide vital inputs. This lowers costs. How to really know your customers,

Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong

or suppliers, is a central problem for businesses with millions of offline and online
customers.

4. Improved decision making:

Many business managers operate in an information fog bank, never really having the
right information at the right time to make an informed decision. Instead, managers rely
on forecasts, best guesses, and luck. The result is over or underproduction of goods and
services, misallocation of resources, and poor response times. These poor outcomes raise
costs and lose customers. In the past decade, information systems and technologies have
made it possible for managers to use real-time data from the marketplace when making
decisions.

5. Competitive Advantage:

When firms achieve one or more of these business objectives—operational excellence;

new products, services, and business models; customer/supplier intimacy; and improved
decision making—chances are they have already achieved a competitive advantage.
Doing things better than your competitors, charging less for superior products, and
responding to customers and suppliers in real time all add up to higher sales and higher
profits that your competitors cannot match.

Apple Inc., Walmart, and UPS are industry leaders because they know how to use
information systems for this purpose.

6. Survival:

Business firms also invest in information systems and technologies because they are
necessities of doing business. Sometimes these “necessities” are driven by industry-level
changes. For instance, after Citibank introduced the first automated teller machines
(ATMs) in the New York region in 1977 to attract customers through higher service
levels, its competitors rushed to provide ATMs to their customers to keep up with
Citibank.

Q-3: What is business information value chain? Explain the dimensions &
approaches of information system?

Business information value chain:

Every business has an information value chain, which raw information is systematically
acquired and then transformed through various stages that add value to that information.

Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong

The value of an information system to a business, as well as the decision to invest in any
new information system, is, in large part, determined by the extent to which the system
will lead to better management decisions, more efficient business processes, and higher
firm profitability. Although there are other reasons why systems are built, their primary
purpose is to contribute to corporate value.

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.

Fig: A business information value chain

Dimensions of information systems:

Dimensions of information systems—

1. Organizations,
2. Management, and
3. Information technology.

Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong

 Fig: Dimensions of IS

Organizations:

The organization dimension of information systems involves issues such as the

organization’s hierarchy, functional specialties, business processes, culture, and political
interest groups.

Organization’s hierarchy: Organizations have a structure that is composed of different

levels and specialties. Their structures reveal a clear-cut division of labor. Authority and
responsibility in a business firm are organized as a hierarchy, or a pyramid structure. The
upper levels of the hierarchy consist of managerial, professional, and technical
employees, whereas the lower levels consist of operational personnel.

Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong

Business functions: The major business functions, or specialized tasks performed by
business organizations, consist of sales and marketing, manufacturing and production,
finance and accounting, and human resources.

Business processes: An organization coordinates work through its hierarchy and through
its business processes, which are logically related tasks and behaviors for accomplishing
work. Developing a new product, fulfilling an order, and hiring a new employee are
examples of business processes.

Culture: Each organization has a unique culture, or fundamental set of assumptions,

values, and ways of doing things, that has been accepted by most of its members

Political interest groups: Different levels and specialties in an organization create

different interests and points of view. These views often conflict over how the company
should be run and how resources and rewards should be distributed. Conflict is the basis
for organizational politics. Information systems come out of this cauldron of differing
perspectives, conflicts, compromises, and agreements that are a natural part of all
organizations

Management:

Management’s job is to make sense out of the many situations faced by organizations,
make decisions, and formulate action plans to solve organizational problems. Managers
perceive business challenges in the environment; they set the organizational strategy for
responding to those challenges; and they allocate the human and financial resources to
coordinate the work and achieve success.

Technology:

The technology dimension consists of computer hardware, software, data management

technology, and networking/telecommunications technology (including the Internet).

Approaches of information system:

The study of information systems deals with issues and insights contributed from
technical and behavioral disciplines.

Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong

 Fig: Approaches of IS

Technical Approaches: The technical approach to information systems emphasizes

mathematically based models to study information systems, as well as the physical
technology and formal capabilities of these systems. The disciplines that contribute to the
technical approach are computer science, management science, and operations research.

Computer science is concerned with establishing theories of computability, methods of

computation, and methods of efficient data storage and access.

Management science emphasizes the development of models for decision-making and

management practices.

Operations research focuses on mathematical techniques for optimizing selected

parameters of organizations, such as transportation, inventory control, and transaction
costs.

Behavioral Approaches: An important part of the information systems field is

concerned with behavioral issues that arise in the development and long-term
maintenance of information systems. Issues such as strategic business integration, design,
implementation, utilization, and management cannot be explored usefully with the
models used in the technical approach. Other behavioral disciplines contribute important
concepts and methods.

Sociologists study information systems with an eye toward how groups and organizations
shape the development of systems and also how systems affect individuals, groups, and
organizations.

Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong

Psychologists study information systems with an interest in how human decision makers
perceive and use formal information.

Economists study information systems with an interest in understanding the production

of digital goods, the dynamics of digital markets, and how new information systems
change the control and cost structures within the firm.

Socio-technical view: In a socio-technical 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.

Fig: A Socio-technical Perspective on IS

Abul Hasnat Pabel | ID- 13302131 | Department of Management | University of Chittagong