Management Information Systems: Managing The Digital Firm
Management Information Systems: Managing The Digital Firm
Lecture 1
Information Systems in
Global Business Today
Learning Objectives
1.1 How are information systems transforming business, and
why are they so essential for running and managing a
business today?
1.1 How are information
1.2 What is an information system? How does it work? What
systems transforming business,
are its management, organization, and technology
components? Why are complementary assets essential
DISCUSSION and why are they essential for
for ensuring that information systems provide genuine running and managing a
value for organizations? business today?
1.3 What academic disciplines are used to study information
systems, and how does each contribute to an
understanding of information systems?
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Survival
• Businesses may need to invest in information systems out
of necessity; simply the cost of doing business
• Keeping up with competitors
– Citibank’s introduction of ATMs
• Federal and state regulations and reporting requirements DISCUSSION
1.2 What is an information
system? How does it work?
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• Business information value chain • Investing in information technology does not guarantee
– Raw data acquired and transformed through stages good returns
that add value to that information • There is considerable variation in the returns firms receive
– Value of information system determined in part by from systems investments
extent to which it leads to better decisions, greater
efficiency, and higher profits • Factors
– Adopting the right business model
• Business perspective
– Investing in complementary assets (organizational and
– Calls attention to organizational and managerial nature management capital)
of information systems
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Management Information Systems: Learning Objectives
Managing the Digital Firm 2.1 What are business processes? How are they related to
Sixteenth Edition information systems?
2.2 How do systems serve the different management groups in
a business, and how do systems that link the enterprise
improve organizational performance?
Chapter 2 2.3 Why are systems for collaboration and social business so
Global E-Business and important, and what technologies do they use?
Collaboration
2.4 What is the role of the information systems function in a
business?
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2.1 Business Processes 2.1 Business Processes
The Order Fulfillment Process
Swim Lane Flowchart
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2.1 Business Processes 2.1 Business Processes
How Information Technology/IS Improves Business Processes
• Increasing efficiency of existing processes
– Automating steps that were manual
• Enabling entirely new processes
– Changing flow of information
– Replacing sequential steps with parallel steps
– Eliminating delays in decision making
– Supporting new business models
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2.2 Systems for the different management groups 2.2 Systems for the different management groups
Operation
Operational
Employees
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2.2 Systems for the different management groups 2.2 Systems for Different Management Groups
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Airline online transaction processing reservation systems A Payroll TPS
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2.2 Systems for Different Management Groups 2.2 Systems for Different Management Groups
Bottom Line:
The transaction processing system (TPS) records the data
from everyday operations throughout every division or
department in the organization. Each division/department is
tied together through the TPS to provide useful information
to management levels throughout the company.
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2.2 Systems for Different Management Groups 2.2 Systems for Different Management Groups
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2.2 Systems for Different Management Groups 2.2 Systems for Different Management Groups
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2.2 Systems for Different Management Groups 2.2 Systems for Different Management Groups
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2.2 Systems for Different Management Groups 2.2 Systems for Different Management Groups
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2.2 Systems for Different Management Groups 2.2 Systems for Different Management Groups
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2.2 Systems for Different Management Groups 2.2 Systems for Different Management Groups
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2.3 Enterprise Application 2.3 Enterprise Application
• Systems for linking the enterprise
• Span functional areas
• Execute business processes across the firm
• Include all levels of management
• Four major applications
– Enterprise systems
– Supply chain management systems
– Customer relationship management systems
– Knowledge management systems
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• Speed communication of information throughout firm. • Manage shared information about orders, production,
inventory levels, and so on.
• Enable greater flexibility in responding to customer requests,
greater accuracy in order fulfillment. • Goal is to move correct amount of product from source to point
of consumption as quickly as possible and at lowest cost
• Enable managers to assemble overall view of operations.
• Type of interorganizational system: Automating flow of
information across organizational boundaries
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2.3 Enterprise Application 2.3 Enterprise Application
2.3.3 Customer Relationship Management (CRM) Systems 2.3.4 Knowledge Management Systems (KMS)
• Help manage relationship with customers. • Manage processes for capturing and applying knowledge and
• Coordinate business processes that deal with customers in expertise
sales, marketing, and customer service • Collect relevant knowledge and make it available wherever
• Goals: needed in the enterprise to improve business processes and
management decisions.
– Optimize revenue
– Improve customer satisfaction • Link firm to external sources of knowledge
– Increase customer retention
– Identify and retain most profitable customers
– Increase sales
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2.4 Other terms 2.4 Other terms
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2.4 Other terms 2.4 Other terms
What is Social Business? Requirements for Collaboration
• Social business
– Use of social networking platforms (internal and external)
to engage employees, customers, and suppliers
• Aims to deepen interactions and expedite information
sharing
• “Conversations” to strengthen bonds with customers
• Requires information transparency
• Seen as way to drive operational efficiency, spur innovation,
accelerate decision making
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2.4 Other terms 2.4 Other terms
The Time/Space Collaboration and Social Tool Matrix The Information Systems Department
• Often headed by chief information officer (CIO)
– Other senior positions include chief security officer
(CSO), chief knowledge officer (CKO), chief privacy
officer (CPO), chief data officer (CDO)
• Programmers
• Systems analysts
• Information systems managers
• End users
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Organizing the Information Systems Function 1. How can a transaction processing system help an organization’s
management information system and decision-support system?
• IT governance
– Strategies and policies for using IT in the organization 2. Which of the four major types of information systems do you
think is the most valuable to an organization?
– Decision rights
3. Discuss the benefits and challenges of enterprise systems and
– Accountability
explain why a firm would want to build one.
– Organization of information systems function
4. Discuss why a typical hierarchical management structure is not
Centralized, decentralized, and so on conducive to a collaborative business culture.
5. Discuss the tools and technologies for collaboration and social
business that are available and how they provide value to an
organization.
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Management Information Systems:
1 2
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1. Project Conceptualization:
Manage business functions
Three stages of Database Development
2. Data Collection
1. Requirements
2. Component 3. Implementation
analysis state ->
design state -> Data state -> Physical
understanding the
model (ERD) database (DBMS)
3. Data Storage and data problem
management: ERD
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File Organization Terms and Concepts
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Cardinality of Relationships
One-to-One
Each entity in the relationship will have exactly one related
entity
One-to-Many
An entity on one side of the relationship can have many related
entities, but an entity on the other side will have a maximum of
one related entity
Many-to-Many
Entities on both sides of the relationship can have many related
entities on the other side
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Discussion for E-R Diagram Transforming E-R diagrams into relations (table)
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Transforming E-R diagrams into relations (table) Transforming E-R diagrams into relations (table)
a) Relationship between customers and orders a) Completes relationship (M:N)
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Transforming E-R diagrams into relations (table) Transforming E-R diagrams into relations (table)
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Transforming E-R diagrams into relations (table) Transforming E-R diagrams into relations (table)
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Transforming E-R diagrams into relations (table) Transforming E-R diagrams into relations (table)
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Transforming E-R diagrams into relations (table) Transforming E-R diagrams into relations (table)
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Transforming E-R diagrams into relations (table) The Challenge of Big Data
• Big data
– Massive sets of unstructured/semi-structured data from
web traffic, social media, sensors, and so on
• Volumes too great for typical DBMS
– Petabytes, exabytes of data
• Can reveal more patterns, relationships and anomalies
• Requires new tools and technologies to manage and analyze
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Business Intelligence Infrastructure
Figure 6.13 Contemporary Business
• Array of tools for obtaining information from separate
systems and from big data Intelligence Infrastructure
• Data warehouse
– Stores current and historical data from many core
operational transaction systems
– Consolidates and standardizes information for use across
enterprise, but data cannot be altered
– Provides analysis and reporting tools
• Data marts:
– Subset of data warehouse
– Typically focus on single subject or line of business
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Data Mining
• Finds hidden patterns, relationships in datasets
– Example: customer buying patterns
• Infers rules to predict future behavior
• Types of information obtainable from data mining: THE END
– Associations
– Classification
– Clustering
– Forecasting
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Transforming E-R diagrams into relations (table)
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Management Information Systems: Introduction
Managing the Digital Firm
Sixteenth Edition Problem: Legacy systems designed for old
business model; system needed to support
new consumer, products, business processes
Solution: SAP enterprise resource planning
Lecture 4 system
Achieving Operational Excellence Demonstrates use of technology to support
and Customer Intimacy: Enterprise
Applications new business models and efficiency, integrate
cross-enterprise data for single, consistent
view
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Learning Objectives
6.1 How do enterprise systems help businesses achieve
operational excellence?
6.2 How do supply chain management systems coordinate
planning, production, and logistics with suppliers?
6.3 How do customer relationship management systems
help firms achieve customer intimacy?
6.4 What are the challenges that enterprise applications
pose, and how are enterprise applications taking
advantage of new technologies?
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Enterprise Systems Enterprise Systems
Enterprise Software
Business value of Enterprise software Firms
Supply chain management systems
related to coordinate planning,
production, and logistics with
Sales & Finance & Manufacturing Human
suppliers.
Marketing Accounting & Production resources
upstream supply chain (Software) (Software) (Software) (Software)
DISCUSSION internal supply chain
downstream supply chain
Bullwhip effect
just-in-time strategies
Safety stock ERP (software)
push-based model
pull-based model
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Odoo platform
Enterprise Systems
• Enterprise resource planning (ERP) systems
• Suite of integrated software modules and a common
central database
• Collects data from many divisions of firm for use in nearly
all of firm’s internal business activities
• Information entered in one process is immediately
available for other processes
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Figure 9.1 How Enterprise Systems Enterprise Software
Work • Built around thousands of predefined business processes
that reflect best practices
– Finance and accounting
– Human resources
– Manufacturing and production
– Sales and marketing
• To implement, firms:
– Select functions of system they wish to use
– Map business processes to software processes
Use software’s configuration tables for customizing
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Odoo platform - SCM
The Supply Chain
• Network of organizations and processes for:
– Procuring materials
– Transforming materials into products
– Distributing the products
• Upstream supply chain
• Downstream supply chain
• Internal supply chain
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The Bullwhip Effect – Rủi ro tiềm ẩn của chuỗi cung ứng
Figure 9.3 The Bullwhip Effect
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Customer Relationship Management Customer Relationship Management
Source: Siddiqi, J., Akhgar, B., Wise, T., Hallam, S.: A Framework for the Implementation
of a CRM Strategy in Retail Sector. In proceeding of the 2006 International Conference
on Information & Knowledge Engineering, CSREA Press 2006, ISBN 1-60132-003-5
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Source: Le Dien Tuan and Duong Quang Danh.: Áp dụng mô hình RFM trong phân
khúc khách hàng nhằm phát triển chiến lược marketing. In proceeding of 2022 CITA.
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Customer Relationship Management Figure 9.6 Customer Relationship
• Knowing the customer (profitable, loyal customers) Management (CRM)
• In large businesses, too many customers and too many
ways customers interact with firm
• CRM systems
– Capture and integrate customer data from all over the
organization
– Consolidate and analyze customer data
– Distribute customer information to various systems and
customer touch points across enterprise
– Provide single enterprise view of customers
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Business Value of Customer Enterprise Application Challenges
Relationship Management Systems • Expensive to purchase and implement enterprise
• Business value of CRM systems applications
– Increased customer satisfaction – Multi-million dollar projects in 2018
– Reduced direct-marketing costs – Long development times
– More effective marketing • Technology changes
– Lower costs for customer acquisition/retention • Business process changes
– Increased sales revenue
• Organizational learning, changes
• Churn rate
• Switching costs, dependence on software vendors
– Number of customers who stop using or purchasing
products or services from a company • Data standardization, management, cleansing
– Indicator of growth or decline of firm’s customer base
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Discussion question
1. How does enterprise software enable a business to use Copyright
industry-proven best practices?
2. Explain the bull-whip effect on a supply chain and how it
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3. Describe the difference between push-based supply any part of this work (including on the World Wide Web) will
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4. Describe the difference between operational customer classes. All recipients of this work are expected to abide by these
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relationship management systems and analytical customer the needs of other instructors who rely on these materials.
relationship management systems.
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Management Information Systems:
Problem: Extreme competition; opportunities from
Managing the Digital Firm new technology
Sixteenth Edition Solutions: Use analysis methods of business
intelligence to improve organization and team
performance.
Chapter 8
Enhancing Decision Making
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Introduction
Data/Big data
Decision making
Statistics
Data mining
Business Artificial
Intelligence/Bus Intelligence
iness Analytics Data analysis
Demo toolset
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Learning Objectives What Are the Different Types of
8.1 What are the different types of decisions, and how does Decisions, and How Does the
the decision making process work? Decision Making Process Work?
8.2 How do information systems support the activities of (1 of 2)
managers and management decision making?
• Business value of improved decision making
8.3 How do business intelligence and business analytics – Improving hundreds of thousands of “small” decisions adds up to
support decision making? large annual value for the business
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Figure 12.2 Stages in Decision The Decision Making Process
Making • Intelligence
– Discovering, identifying, and understanding the
problems occurring in the organization
• Design
– Identifying and exploring solutions to the problem
• Choice
– Choosing among solution alternatives
• Implementation
– Making chosen alternative work and continuing to
monitor how well solution is working
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High-Velocity Automated Decision What is Business Intelligence?
Making • Business intelligence
• Made possible through computer algorithms precisely – Infrastructure for collecting, storing, analyzing data
defining steps for a highly structured decision produced by business
– Humans taken out of decision – Databases, data warehouses, data marts
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Business Intelligence and Analytics Analytics Overview
Capabilities
• Goal is to deliver accurate real-time information to decision
makers
• Main analytic functionalities of BI systems
– Production reports
– Parameterized reports
– Dashboards/scorecards
– Ad hoc query/search/report creation
– Drill down
– Forecasts, scenarios, models
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Operational Intelligence and Location Analytics and Geographic
Analytics Information Systems
• Operational intelligence: Business activity monitoring • Location analytics
• Collection and use of data generated by sensors – Ability to gain business insight from the location
(geographic) component of data
• Internet of Things Mobile phones
– Creating huge streams of data from web activities, Sensors, scanning devices
sensors, and other monitoring devices
Map data
• Software for operational intelligence and analytics enable
companies to analyze their big data • Geographic information systems (GIS)
– Ties location-related data to maps
– Example: For helping local governments calculate
response times to disasters
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GDSS
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Decisions Regression
• A part of inferential statistics
• Decision-support systems • The most widely known and used analytics technique in
– Support for semistructured decisions statistics
• Used to characterize relationship between explanatory
• Use mathematical or analytical models (input) and response (output) variable
• Allow varied types of analysis It can be used for
– “What-if” analysis • Hypothesis testing (explanation)
• Forecasting (prediction)
– Sensitivity analysis
– Multidimensional analysis / OLAP
For example: pivot tables
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Regression Modeling Regression Modeling
• x: input, y: output
• Simple Linear Regression
y 0 1 x
• Multiple Linear Regression
y 0 1 x1 2 x2 3 x3 ... n xn
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Decision Support for Senior Figure 12.7 The Balanced Scorecard
Management (1 of 2) Framework
• ESS: decision support for senior management
– Help executives focus on important performance information
• Balanced scorecard method
– Measures outcomes on four dimensions
Financial
Business process
Customer
Learning and growth
– Key performance indicators (KPIs) measure each dimension
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Management Information Systems:
Managing the Digital Firm
Sixteenth Edition MIS Business model for e-
commerce
E-commece presence
Lecture 6
Firms
E-commerce: Digital Markets, Digital
E-commerce E-logistics and e-
Goods payments
Marketing Online
Slide in this Presentation Contain Hyperlinks.
JAWS users should be able to get a list of links Data-based business
by using INSERT+F7
strategy (BI)
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Demonstrates use of social networking technologies in 6.5 What is the role of m-commerce in business, and what are the
most important m-commerce applications?
generating new business models
6.6 What issues must be addressed when building an e-commerce
presence?
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Introduction to E-commerce Major Trends in E-commerce
• Use of Internet to transact business • Business trends include:
– Includes Web, mobile browsers and apps – Covid-19 pandemic fuels surge in retail e-commerce,
m-commerce, and certain on-demand services
• More formally:
– Digitally enabled commercial transactions between and • Technology trends include:
among organizations and individuals – Mobile platform and cloud computing
– Big data and Internet of Things
• Societal trends include:
– Increased concern about impact of social networks
– Concerns about increasing market dominance of big
technology firms
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Key Concepts in E-Commerce – Figure 10.2 The Benefits of
Digital Markets and Digital Goods in a Disintermediation to the Consumer
Global Marketplace
• Internet and digital markets have changed the way companies
conduct business
• Information asymmetry reduced
• Menu costs, search and transaction costs reduced
• Dynamic pricing enabled
• Switching costs
• Delayed gratification
• Disintermediation
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Bottom line:
Digital Goods
E-commerce firms now have more opportunities to reach
• Goods that can be delivered over a digital network customers, suppliers, and partners through Internet channels.
• Cost of producing first unit is almost entire cost of product The Internet has also given digital firms the opportunity to
• Costs of delivery over the Internet very low create new business models or reshape their current model by
using one or more of the unique features of e-commerce:
• Marketing costs remain the same; pricing highly variable
ubiquity, global reach, universal standards, richness,
• Industries with digital goods are undergoing revolutionary
interactivity, information density, personalization/customization,
changes (publishers, record labels, etc.)
and social technology.
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Print-on-Demand Model
Print-on-Demand model
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7.2 Nguyên lý KD TMĐT và mô hình thu nhập
E-Commerce Revenue Models
• Advertising
• Sales
• Subscription
• Free/Freemium
• Transaction fee
• Affiliate
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Social E-Commerce and Social Social E-Commerce and Social
Network Marketing (1 of 2) Network Marketing (2 of 2)
• Social e-commerce based on digital social graph • Social network marketing
• Features of social e-commerce driving its growth – Seeks to leverage individuals’ influence over others
– Newsfeed – Targeting a social network of people sharing interests
– Timelines and advice
– Social sign-on – Facebook’s “Like” button
– Collaborative shopping – Social networks have huge audiences
– Network notification • Social shopping sites
– Social search (recommendations)
• Wisdom of crowds
• Social media
– Fastest growing media for branding and marketing • Crowdsourcing
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What is the Role of M-Commerce in Figure 10.9 Mobile Retail Commerce
Business, and What are the Most Revenues
Important M-Commerce Applications?
• M-commerce in 2017 is 35 percent of all e-commerce
• Fastest growing form of e-commerce
– Growing at 20 percent or more per year
• Main areas of growth
– Mass market retailing (Amazon, eBay, etc.)
– Sales of digital content (music, T V, etc.)
– In-app sales to mobile devices
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What Issues Must Be Addressed Figure 10.10 E-Commerce Presence
When Building an E-Commerce Map
Presence?
• Most important management challenges
– Developing clear understanding of business objectives
– Knowing how to choose the right technology to achieve
those objectives
• Develop an e-commerce presence map
– Four areas: websites, e-mail, social media, offline
media
• Develop a timeline: milestones
– Breaking a project into discrete phases
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Management Information Systems:
Managing the Digital Firm Learning Objectives
Sixteenth Edition 7.1 What is IT infrastructure, and what are the stages and
drivers of IT infrastructure evolution?
7.2 What are the components of IT infrastructure?
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Defining IT Infrastructure Figure 5.1 Connection Between the
• Set of physical devices and software required to operate Firm, IT Infrastructure, and Business
an enterprise Capabilities
• Set of firm-wide services including:
– Computing platforms providing computing services
– Physical facilities management services
– IT management, education, and other services
• “Service platform” perspective
– More accurate view of value of investments
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Figure 5.3 A Multitiered (N-Tier) Technology Drivers of Infrastructure
Client/Server Network Evolution (1 of 2)
• Moore’s law and microprocessing power
– Computing power doubles every 2 years
– Nanotechnology
• Law of Mass Digital Storage
– The amount of data being stored each year doubles
• Metcalfe’s Law and network economics
– Value or power of a network grows exponentially as a
function of the number of network members.
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Computer Hardware Platforms Operating System Platforms
• Client machines • Corporate servers
– Desktop PCs, laptops – Windows Server
– Mobile computing: smartphones, tablets – Unix
– Desktop chips vs. mobile chips – Linux
• Servers • Client level
• Mainframes – Microsoft Windows
– IBM mainframe – Android, iOS, Windows 10 (mobile/multitouch)
– Digital workhorse for banking and telecommunications – Google’s Chrome OS (cloud computing)
networks
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Networking/Telecommunications Internet Platforms
Platforms • Hardware, software, management services to support
company websites, intranets
• Network operating systems
– Web-hosting services
– Windows Server, Linux, Unix
– Routers
• Network hardware providers
– Cabling or wireless equipment
– Cisco, Juniper Networks
• Internet hardware server market
• Telecommunication services
– IBM, Dell, Oracle, HP
– Telecommunications, cable, telephone company
charges for voice lines and Internet access • Web development tools/suites
– AT&T, Verizon – Microsoft (Visual Studio and .NET), Oracle-Sun (Java),
Adobe
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What Are the Current Trends in What Are the Current Trends in
Computer Hardware Platforms? (2 of 5) Computer Hardware Platforms? (3 of 5)
• Quantum computing • Cloud computing
– Uses quantum physics to represent and operate on – On-demand computing services obtained over network
data Infrastructure as a service (IaaS)
– Dramatic increases in computing speed Software as a service (SaaS)
• Virtualization Platform as a service (PaaS)
– Allows single physical resource to act as multiple – Cloud can be public or private
resources (i.e., run multiple instances of OS) – Allows companies to minimize IT investments
– Reduces hardware and power expenditures – Drawbacks: Concerns of security, reliability
– Facilitates hardware centralization – Hybrid cloud computing model
– Software-defined storage (SDS)
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Figure 5.9 Cloud Computing Platform What Are the Current Trends in
Computer Hardware Platforms? (4 of 4)
• Green computing (Green IT)
– Practices and technologies for manufacturing, using,
disposing of computing and networking hardware
– Reducing power consumption a high priority
– Data centers
• High performance, power-saving processors
– Multicore processors
– Power-efficient microprocessors
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What Are the Current Computer
Software Platforms and Trends?
• Linux and open-source software
– Produced by community of programmers
What are the current
– Examples: Apache web server, Mozilla Firefox browser,
DISCUSSION computer software platforms OpenOffice
and trends? – Linux
• Software for the web: Java, HTML, and HTML5
– Java Virtual Machine
– Web browsers
– HTMLand HTML5
– Ruby and Python
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Dealing with Platform and Management and Governance
Infrastructure Change • Governance
• As firms shrink or grow, IT needs to be flexible and • Who controls IT infrastructure?
scalable
• How should IT department be organized?
• Scalability – Centralized
– Ability to expand to serve larger number of users Central IT department makes decisions
• For mobile computing and cloud computing – Decentralized
– New policies and procedures for managing these new Business unit IT departments make own decisions
platforms
• How are costs allocated between divisions, departments?
– Contractual agreements with firms running clouds and
distributing software required
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Competitive Forces Model for IT Figure 5.13 Competitive Forces Model
Infrastructure Investment for IT Infrastructure
• Market demand for firm’s services
• Firm’s business strategy
• Firm’s IT strategy, infrastructure, and cost
• Information technology assessment
• Competitor firm services
• Competitor firm IT infrastructure investments
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Management Information Systems:
Managing the Digital Firm Learning Objectives
Sixteenth Edition 8.1 How does building new systems produce organizational
change?
8.2 What are the core activities in the systems development
process?
Lecture 8
8.3 What are the principal methodologies for modeling and
Building Information Systems designing systems?
8.4 What are alternative methods for building information
systems?
8.5 What are new approaches for system building in the
digital firm era?
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Systems Development and Systems Development and
Organizational Change (1 of 2) Organizational Change (2 of 2)
• IT-enabled organizational change • Business process redesign
• Automation – Analyze, simplify, and redesign business processes
– Increases efficiency – Reorganize workflow, combine steps, eliminate
repetition
– Replaces manual tasks
• Paradigm shifts
• Rationalization of procedures
– Rethink nature of business
– Streamlines standard operating procedures
– Define new business model
– Often found in programs for making continuous quality
improvements – Change nature of organization
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Figure 13.3 Redesigned Process for
Purchasing a Book Online
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Systems Analysis Systems Design
• Analysis of problem to be solved by new system • Describes system specifications that will deliver functions
– Defining the problem identified during systems analysis
– Identifying causes • Should address all managerial, organizational, and
– Specifying solutions technological components of system solution
– Identifying information requirements • Role of end users
• Feasibility study – User information requirements drive system building
• Systems proposal report – Users must have sufficient control over design process
to ensure system reflects their business priorities and
• Information requirements information needs
– Faulty requirements analysis is a leading cause of – Insufficient user involvement in design effort is major
systems failure and high systems development costs cause of system failure
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Structured Methodologies (1 of 2)
• Structured: Techniques are step-by-step, progressive
• Process-oriented: Focusing on modeling processes or
actions that manipulate data
• Separate data from processes
• Data flow diagram (DFD)
– Represents system’s component processes and flow of
data between them
– Logical graphic model of information flow
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• Context Diagram
– A data-flow diagram (DFD) of the scope of an
organizational system that shows the system Chức năng Chức năng DFD ở mức 0
boundaries, external entities that interact with the 0.B 0.C
5.23
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Business Flow Diagram (BFD)
Sơ đồ ngữ cảnh (Context Diagram)
Ví dụ: Sơ đồ BFD
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Object-Oriented Development (1 of 2) Figure 13.8 Class and Inheritance
• Object
– Basic unit of systems analysis and design
– Combines data and the processes that operate on those
data
– Data in object can be accessed only by operations
associated with that object
• Object-oriented modeling
– Based on concepts of class and inheritance
– Objects belong to a certain class and have features of that
class
– May inherit structures and behaviors of a more general,
ancestor class
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End-User Development (2 of 2) Application Software Packages and
• Advantages Cloud Software Services
– More rapid completion of projects • Application software packages and cloud software services
– High level of user involvement and satisfaction – Save time and money
– Many packages offer customization features
• Disadvantages
• Evaluation criteria for systems analysis include:
– Not designed for processing-intensive applications
– Functions provided, flexibility, user friendliness, required
– Inadequate management and control, testing, resources, database requirements, installation and maintenance
documentation efforts, documentation, vendor quality, and cost
– Loss of control over data • Request for Proposal (RFP)
• Managing end-user development – Detailed list of questions submitted to packaged-software vendors
– Used to evaluate alternative software packages
– Require cost-justification of end-user system projects
– Establish hardware, software, and quality standards
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Outsourcing (1 of 2) Outsourcing (2 of 2)
• Several types • Advantages
– Cloud and SaaS providers – Allows organization flexibility in IT needs
Subscribing companies use software and computer • Disadvantages
hardware provided by vendors
– Hidden costs, for example:
– External vendors
Identifying and selecting vendor
Hired to design, create software
Transitioning to vendor
Domestic outsourcing
– Opening up proprietary business processes to third
– Driven by firm’s need for additional skills, party
resources, assets
Offshore outsourcing
– Driven by cost-savings
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Rapid Application Development (RAD),
Agile Development, and DevOps
• Rapid application development (RAD)
– Process of creating workable systems in a very short period of
time
What are new approaches for • Joint application design (JAD)
DISCUSSION system-building in the digital – Used to accelerate generation of information requirements and to
firm era? develop initial systems design
• Agile development
– Focuses on rapid delivery of working software by breaking large
project into several small subprojects
• DevOps
– Builds on Agile development principles as an organizational
strategy
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Management Information Systems:
Managing the Digital Firm Learning Objectives
Sixteenth Edition 9.1 Which features of organizations do managers need to know
about to build and use information systems successfully?
9.2 What is the impact of information systems on organizations?
9.3 How do Porter’s competitive forces model, the value chain
Lecture 9 model, synergies, core competencies, and network
Information Systems, Organizations, economics help companies develop competitive strategies using
and Strategy information systems?
9.4 What are the challenges posed by strategic information
systems, and how should they be addressed?
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3.1 Organization and Information System
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3.1 Organization and Information System 3.1 Organization and Information System
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3.1 Organization and Information System 3.1 Organization and Information System
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3.1 Organization and Information System 3.1 Organization and Information System
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3.1 Organization and Information System 3.1 Organization and Information System
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3.1 Organization and Information System 3.1 Organization and Information System
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3.1 Organization and Information System
Disruptive Technologies
• Substitute products that perform as well as or better than
existing product
• Technology that brings sweeping change to businesses,
industries, markets
• Examples: personal computers, smartphones, Big Data, Which is the impact of information
DISCUSSION
artificial intelligence, the Internet systems on organization?
• First movers and fast followers
– First movers—inventors of disruptive technologies
– Fast followers—firms with the size and resources to
capitalize on that technology
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Economic Impacts
• IT changes relative costs of capital and the costs of
Economic Impacts
information
DISCUSSION Organizational and Behavioural impacts
Understanding organizational resistance
• Information systems technology is a factor of production,
Question:
like capital and labor
to change
Describe the difference between the
economic theory and the behavioral theory The Internet and Organizations
• IT affects the cost and quality of information and changes
of how information systems affect Implications for the design and economics of information
organizations.
understanding of information systems – Information technology helps firms contract in size
because it can reduce transaction costs (the cost of
participating in markets)
Outsourcing
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3.2 The impacts of information system on organization 3.2 The impacts of information system on organization
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3.2 The impacts of information system on organization 3.2 The impacts of information system on organization
Agency Theory
Organizational and Behavioral Impacts
• Firm is nexus of contracts among self-interested parties
requiring supervision • IT flattens organizations
– Decision making is pushed to lower levels
• Firms experience agency costs (the cost of managing and
supervising) which rise as firm grows – Fewer managers are needed (IT enables faster decision
making and increases span of control)
• IT can reduce agency costs, making it possible for firms
to grow without adding to the costs of supervising, and • Postindustrial organizations
without adding employees – Organizations flatten because in postindustrial societies,
authority increasingly relies on knowledge and
Bottom line: IS reduces both agency and transaction
competence rather than formal positions
costs for firms, we should expect firm size to shrink over
time as more capital is invested in IT. Firms should have
fewer managers, and we expect to see revenue per
employee increase over time.
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3.2 The impacts of information system on organization 3.2 The impacts of information system on organization
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3.2 The impacts of information system on organization 3.2 The impacts of information system on organization
Organizational Resistance to Information System Innovations Implications for the Design and Understanding of IS
• Organizational factors in planning a new system:
– Environment
– Structure
Hierarchy, specialization, routines, business processes
– Culture and politics
– Type of organization and style of leadership
– Main interest groups affected by system; attitudes of end
users
– Tasks, decisions, and business processes the system will
assist
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3.3 Developing competitive strategies using information systems
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3.3 Developing competitive strategies using information systems 3.3 Developing competitive strategies using information systems
• Traditional competitors
– All firms share market space with competitors who are
continuously devising new products, services,
efficiencies, and switching costs
• New market entrants
– Some industries have high barriers to entry, for
example, computer chip business
– New companies have new equipment, younger
workers, but little brand recognition
Business model; Mission statement; Domain name;
Key product features; Product pricing strategy.
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3.3 Developing competitive strategies using information systems 3.3 Developing competitive strategies using information systems
Porter’s Competitive Forces Model Information System Strategies for Dealing with Competitive
Forces
• Substitute products and services
– Substitutes customers might use if your prices become • Four generic strategies for dealing with competitive
too high, for example, iTunes substitutes for CD s forces, enabled by using IT:
– Low-cost leadership
• Customers
– Product differentiation
– Can customers easily switch to competitor's products?
– Focus on market niche
Can they force businesses to compete on price alone
in transparent marketplace? – Strengthen customer and supplier intimacy
• Suppliers
– Market power of suppliers when firm cannot raise
prices as fast as suppliers
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3.3 Developing competitive strategies using information systems 3.3 Developing competitive strategies using information systems
Information System Strategies for Dealing with Competitive Information System Strategies for Dealing with Competitive
Forces Forces
• Low-cost leadership • Focus on market niche
– Produce products and services at a lower price than – Use information systems to enable a focused strategy
competitors on a single market niche; specialize
– Example: Walmart’s efficient customer response – Example: Hilton Hotels’ OnQ system
system
• Strengthen customer and supplier intimacy
• Product differentiation – Use information systems to develop strong ties and
– Enable new products or services, greatly change loyalty with customers and suppliers
customer convenience and experience – Increase switching costs
– Example: Google, Nike, Apple – Examples: Chrysler, Amazon, Starbucks
– Mass customization
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3.3 Developing competitive strategies using information systems 3.3 Developing competitive strategies using information systems
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3.3 Developing competitive strategies using information systems 3.3 Developing competitive strategies using information systems
Extending the Value Chain: The Value Web The Value Web
• Firm’s value chain is linked to value chains of suppliers,
distributors, customers
• Industry value chain
• Value web
– Collection of independent firms using highly
synchronized IT to coordinate value chains to produce
product or service collectively
– More customer driven, less linear operation than
traditional value chain
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3.3 Developing competitive strategies using information systems 3.3 Developing competitive strategies using information systems
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3.3 Developing competitive strategies using information systems 3.3 Developing competitive strategies using information systems
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3.3 Developing competitive strategies using information systems 3.3 Developing competitive strategies using information systems
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