TABLE OF CONTENTS

INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY...................3

I. What is an Information System?................................................................3
 Definition (a technical perspective) :.................................................3
 Activities in an information system:..................................................3
 Functions of an IS................................................................................3
II. How Information Systems are Transforming Business:.........................5
 5 Changes in business result in changes in jobs and careers.............5
III. Digital firm................................................................................................6
 Business processes................................................................................6
 Key corporate assets............................................................................6
IV. Strategic Business Objectives of Information Systems..........................6
 6 strategic business objectives............................................................7
 Examples:.............................................................................................8
V. Dimension of Information Systems (a business perspective):.................9
1. Organizations.........................................................................................10
2. Management...........................................................................................10
3. Technology..............................................................................................10
4. Dimensions of IS of UPS Tracking System..........................................11
VI. Contemporary Approaches to Information Systems...........................12
CHAPTER 2......................................................................................................13
INFORMATION SYSTEMS, ORGANIZATIONS, AND STRATEGY......13
I. Business processes......................................................................................13
1. Definition................................................................................................13
2. How IT improves business processes...................................................13
II. Organization.............................................................................................14
1. Definition................................................................................................14
2. Features of organization.......................................................................14
3. Systems for different management groups..........................................15
4. Enterprise application...........................................................................17
III. Intranets and Extranets.........................................................................18

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IV. E-Business, E-Commerce, and E-Government.....................................19
V. Collaboration, Social Business, Business Benefits of Collaboration and
Teamwork.......................................................................................................19
1. What is Collaboration?.........................................................................19
2. What is Social business........................................................................20
3. Business Benefits of Collaboration and Teamwork............................20
4. Requirements for Collaboration..........................................................21
5. Tools and Technologies for Collaboration and Social Business.........21
6. Checklist for Managers: Evaluating and Selecting Collaboration
and Social Software Tools.........................................................................21
VI. Impact of IS on Organizations...............................................................22

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 CHAPTER 1

INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY

I. What is an Information System?
+ Data => tranformation and interpret => information
 Definition (a technical perspective) :

 Activities in an information system:

Sharp distinction between computer or computer program versus information

system.
 Functions of an IS

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4
II. How Information Systems are Transforming Business:
 5 Changes in business result in changes in jobs and careers

+ Cloud computing, big data, Internet of

Things
IT Innovations
+ Mobile digital platform
+ AI and machine learning

+ Online streaming music and video

New Business Models
+ On-demand e-commerce services

+ E-commerce expands to nearly $1

trillion in 2018
+ Netflix now has more than 125 million
US subscribers
E-commerce Expansion
+ Online services now approach online
retail in revenue
+ Online mobile advertising now larger
than desktop

+ Managers use social networks,

collaboration tools
Management Changes + Business intelligence applications
accelerate
+ Virtual meetings proliferate

+ More collaborative, less emphasis on

hierarchy and structure
+ Greater emphasis on competencies and
skills
+ Higher-speed/more accurate decision
Firms and Organizations Change
making based on data and analysis
+ More willingness to interact with
consumers (social media)
+ Better understanding of the importance
of IT

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III. Digital firm
 Business processes
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

 Key corporate assets

Intellectual property, core competencies, and financial and human assets—are
managed through digital means. In a digital firm, any piece of information required to
support key business decisions is available at any time and anywhere in the firm.
IV. Strategic Business Objectives of Information Systems
Growing interdependence between:
▪ Ability to use information technology
▪ Ability to implement corporate strategies and achieve corporate goals
▪ What a business would like to do in 5 years often depends on what its
systems will be able to do.

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  6 strategic business objectives

+ Improved efficiency results in higher

profits
1. Operational excellence
+ Information systems and technologies
help improve efficiency and productivity

+ Information systems and technologies

enable firms to create new products,
2. New products, services, and services, and business models
business models + Business model: how a company
produces, delivers, and sells its products
and services

+ Customers who are served well

become repeat customers who purchase
more
3. Customer and supplier intimacy
+ Raise revenues and profits
+ Engages its suppliers => provide vital
inputs => lower costs

Without accurate information:

+ Managers must use forecasts, best
guesses, luck
+ Results in:
‣ Overproduction, underproduction
4. Improved decision making ‣ Misallocation of resources
‣ Poor response times.
+ Poor outcomes raise costs, lose
customers
+ Real-time data improves ability of
managers to make 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
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 products, and responding to customers
and suppliers in real time all add up to
higher sales and higher profits that your
competitors cannot match.

+ Businesses may need to invest in

information systems out of necessity;
6. Survival simply the cost of doing business
+ Keeping up with competitors

 Examples:
1. Operational excellence

2. New products, services, and business models

3. Customer and supplier intimacy

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 4. Improved decision making

5. Competitive advantage
6. Survival

V. Dimension of Information Systems (a business perspective):

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1. Organizations

2. Management
+ Managers set organizational strategy for responding to business challenges, and
they allocate the human and financial resources to coordinate the work and achieve
success. Throughout, they must exercise responsible leadership. The business
information systems described in this book reflect the hopes, dreams, and realities of
real-world managers
+ In addition, managers must act creatively:
– Creation of new products and services
– Occasionally re-creating the organization
3. Technology
+ Computer hardware is the physical equipment used for input, processing, and
output activities in an information system. It consists of the following: computers of
various sizes and shapes (including mobile handheld devices); various input, output,
and storage devices; and telecommunications devices that link computers together.
+ Computer software consists of the detailed, preprogrammed instructions that control
and coordinate the computer hardware components in an information system.
+ Data management technology consists of the software governing the organization
of data on physical storage media.
+ Networking and telecommunications technology, consisting of both physical
devices and software, links the various pieces of hardware and transfers data from one
physical location to another. Computers and communications equipment can be
connected in networks for sharing voice, data, images, sound, and video.
+ A network links two or more computers to share data or resources, such as a printer.

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+ The Internet is a global “network of networks” that uses universal standards to
connect millions of networks in more than 230 countries around the world.
+ World Wide Web is a service provided by the Internet that uses universally accepted
standards for storing, retrieving, formatting, and displaying information in a page
format on the Internet. Web pages contain text, graphics, animations, sound, and video
and are linked to other web pages.
+ The IT infrastructure provides the foundation, or platform, on which the firm can
build its specific information systems.
4. Dimensions of IS of UPS Tracking System

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VI. Contemporary Approaches to Information Systems
+ Complementary assets are those assets required to derive value from a primary
investment (Teece, 1998). For instance, to realize value from automobiles requires
substantial complementary investments in highways, roads, gasoline stations, repair
facilities, and a legal regulatory structure to set standards and control drivers.
+ These investments in organization and management are also known as
organizational and management capital.
+ Key organizational complementary investments are a supportive business culture
that values efficiency and effectiveness, an appropriate business model, efficient
business processes, decentralization of authority, highly distributed decision rights, and
a strong information system (IS) development team.
+ Important managerial complementary assets are strong senior management
support for change, incentive systems that monitor and reward individual innovation,
an emphasis on teamwork and collaboration, training programs, and a management
culture that values flexibility and knowledge.
+ Important social investments (not made by the firm but by the society at large,
other firms, governments, and other key market actors) are the Internet and the
supporting Internet culture, educational systems, network and computing standards,
regulations and laws, and the presence of technology and service firms.

Focusing on formal models and

capabilities of systems are computer
Technical Approach
science, management science, and
operations research,

Focusing on the design, implementation,

management, and business impact of
Behavioral Approach
systems are psychology, sociology, and
economics.

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 CHAPTER 2

INFORMATION SYSTEMS, ORGANIZATIONS, AND STRATEGY

I. Business processes
1. Definition

2. How IT improves business processes

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II. Organization
1. Definition

2. Features of organization
▪ Routines (standard operating
procedures)
‣ Precise rules, procedures, and practices
developed to cope with virtually all
▪ Routines and Business Process expected situations
▪ Business processes: Collections of
routines
▪ Business firm: Collection of business
processes

▪ Divergent viewpoints lead to political

struggle, competition, and conflict.
▪ Divergent viewpoints about how
resources, rewards, and punishments
should be
distributed.
▪ Organizational Politics ▪ Political resistance greatly obstructs
organizational change.
▪ Managers who know how to work with
the politics of an organization will be
more successful than less skilled
managers in implementing new
information systems.

▪ Organizational Culture ▪ Encompasses set of assumptions that

define goal and product

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 ‣ What products the organization should
produce
‣ How and where it should be produced
‣ For whom the products should be
produced
▪ May be powerful unifying force as well
as restraint on change

▪ Organizations and environments have a

reciprocal relationship
▪ Organizations are open to, and
dependent on, the social and physical
environment
▪ Organizational Environments ▪ Organizations can influence their
environments
▪ Environments generally change faster
than organizations
▪ Information systems can be instrument
of environmental scanning, act as a lens

▪ Organizational Structure The figure below

3. Systems for different management groups

▪ Transaction Processing Systems ▪ Serve operational managers and staff
(TPS) ▪ Perform and record daily routine
transactions necessary to conduct business
▪ Examples: sales order entry, payroll,
shipping
▪ Allow managers to monitor status of
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 operations and relations with external
environment
▪ Serve predefined, structured goals and
decision making

▪ Serve middle management

▪ Provide reports on firm’s current
▪ Management Information System performance, based on data from TPS
(MIS) ▪ Provide answers to routine questions with
predefined procedure for answering them
▪ Typically have little analytic capability

▪ Focus on problems that are unique and

rapidly changing, for which the procedure
for arriving at a solution may not be fully
predefined in advance.
▪ Serve middle management
▪ Decision-Support Systems (DSS) ▪ Support non-routine decision making
▪ Example: What is the impact on
production schedule if December sales
doubled?
▪ May use external information as well
TPS/ MIS data

▪ Support senior management

▪ Address non-routine decisions
▪ Requiring judgment, evaluation, and
insight
▪ Executive Support Systems (ESS) ▪ Incorporate data about external events
(e.g., new tax laws or competitors) as well
as summarized information from internal
MIS and DSS
▪ Example: Digital dashboard with real-
time view of firm’s financial performance

▪ Collaboration and Social Business

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4. Enterprise application
▪ Systems for linking the enterprise
▪ Span functional areas
▪ Execute business processes across the firm
▪ Include all levels of management
 4 major applications:

▪ AKA enterprise resource planning

(ERP) systems
▪ Integrate data from key business
processes into single system.
▪ Speed communication of information
1. Enterprise systems (ES) throughout firm.
▪ Enable greater flexibility in responding
to customer requests, greater accuracy in
order fulfillment.
▪ Enable managers to assemble overall
view of operations.

▪ Manage relationships with suppliers,

purchasing firms, distributors, and
logistics companies.
▪ Manage shared information about
orders, production, inventory levels, and
so on.
2. Supply chain management systems
▪ Goal is to move correct amount of
(SCM)
product from source to point of
consumption as quickly as possible and
at lowest cost
▪ Type of interorganizational system:
Automating flow of information across
organizational boundaries

3. Customer relationship management ▪ Help manage relationship with

systems (CRM) customers.
▪ Coordinate business processes that deal
with customers in sales, marketing, and
customer service
▪ Goals:
‣ Optimize revenue
‣ Improve customer satisfaction
‣ Increase customer retention
‣ Identify and retain most profitable
customers
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 ‣ Increase sales

▪ Manage processes for capturing and

applying knowledge and expertise
▪ Collect relevant knowledge and make it
4. Knowledge management systems
available wherever needed in the
(KMS)
enterprise to improve business processes
and management decisions. ▪ Link firm
to external sources of knowledge

III. Intranets and Extranets

Technology platforms that increase integration and expedite the flow of information

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IV. E-Business, E-Commerce, and E-Government

E-Business

E-Commerce

E-
Government

V. Collaboration, Social Business, Business Benefits of Collaboration and

Teamwork
1. What is Collaboration?

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2. What is Social business

3. Business Benefits of Collaboration and Teamwork

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4. Requirements for Collaboration

5. Tools and Technologies for Collaboration and Social Business

6. Checklist for Managers: Evaluating and Selecting Collaboration and Social

Software Tools

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VI. Impact of IS on Organizations
▪ IT changes relative costs of capital and
the costs of information ▪ Information
systems technology is a factor of
production, like capital and labor
▪ IT affects the cost and quality of
Economic Impacts information and changes economics of
information
▪ Information technology helps firms
contract in size because it can reduce
transaction costs (the cost of
participating in markets) – Outsourcing
Organizational and Behavioral IT flattens organizations
Impacts + Decision making is pushed to lower
levels
+ Fewer managers are needed (IT
enables faster decision making and
increases span of control)
Postindustrial organizations
+ Postindustrial theories based more on
history and sociology than economics
also support the notion that IT should
flatten hierarchies.
+ In postindustrial societies, authority
increasingly relies on knowledge and
competence and not merely on formal
positions.

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 + Hence, the shape of organizations
flattens because professional workers
tend to be self-managing, and decision
making should become more
decentralized as knowledge and
information become more widespread
throughout the firm
Understanding Organizational
Resistance to Change
▪ Information systems become bound up
in organizational politics because they
influence access to a key resource—
information
▪ Information systems potentially change
an organization’s structure, culture,
politics, and work

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