Chapter 1

Information Systems in Global Business Today

1.How are information systems transforming business and what is their relationship to globalization?

Describe how information systems have changed the way businesses operate and their products
andservices.

Wireless communications, including computers and mobile hand-held computing devices, are
keepingmanagers, employees, customers, suppliers, and business partners connected in every way
possible. Email,online conferencing, the Web, and the Internet, are providing new and diverse lines of
communication forall businesses, large and small. Through increased communication channels and
decreased costs of thecommunications, customers are demanding more of businesses in terms of
service and product, at lowercosts. E-commerce is changing the way businesses must attract and
respond to customers.

Identify three major new information system trends.

Three information system trends that are influencing the way businesses interact with
employees,customers, suppliers, and business partners include emerging mobile digital platforms,
growth of onlinesoftware-as-a-service, and the growth of cloud computing.

Describe the characteristics of a digital firm.

Significant business relationships with customers, suppliers, and employees are digitally enabled
andmediated.

Core business processes are accomplished through digital networks spanning the entire organizationor
linking multiple organizations.

Key corporate assets- intellectual property, core competencies, and financial and human assets

aremanaged through digital means.

They sense and respond to their environments far more rapidly than traditional firms.

They offer extraordinary opportunities for more flexible global organization and management, practicing
time-shifting and space-shifting.

Describe the challenges and opportunities of globalization in a “flattened” world.

Customers no longer need to rely on local businesses for products and services. They can shop 24/7
forvirtually anything and have it delivered to their door or desktop. Companies can operate 24/7 from
anygeographic location around the world. Jobs can just as easily move across the state or across the
ocean.Employees must continually develop high-level skills through education and on-the-job
experience thatcannot be outsourced. Business must avoid markets for goods and serves that can be
produced offshoremuch cheaper. The emergence of the Internet into a full-blown international
communications system hasdrastically reduced the costs of operating and transacting business on a
global scale.

2. Why are information systems so essential for running and managing a business today?

List and describe six reasons why information systems are so important for business today.

Six reasons why information systems are so important for business today include:

(1) Operational excellence

(2) New products, services, and business models
(3) Customer and supplier intimacy
(4) Improved decision making
(5) Competitive advantage
(6) Survival

Information systems are the foundation for conducting business today. In many industries, survival
andeven existence without extensive use of IT is inconceivable, and IT plays a critical role in increasing
productivity. Although information technology has become more of a commodity, when coupled
withcomplementary changes in organization and management, it can provide the foundation for new
products,services, and ways of conducting business that provide firms with a strategic advantage.

3.What exactly is an information system? How does it work?

What are its management, organizationand technology components?

Define an information system and describe the activities it performs.

An information system is a set of interrelated components that work together to collect, process, store,
and disseminate information to support decision making, coordination, control, analysis, and
visualization in an organization. In addition to supporting decision making, information systems may also
help managers and workers analyze problems, visualize complex subjects, and create new products.

List and describe the organizational, management, and technology dimensions of information systems.

Organization: The organization dimension of information systems involves issues such as the

Organization’s hierarchy, functional specialties, business processes, culture, and political interest

Groups. Management: The management dimension of information systems involves setting

organizational strategies, allocating human and financial resources, creating new products and services
and re-creating the organization if necessary. Technology: The technology dimension consists of
computer hardware, software, data management technology, and networking/telecommunications
technology.
 Distinguish between data and information and between information systems literacy and computer
literacy.

Data are streams of raw facts representing events occurring in organizations or the physical
environment before they have been organized and arranged into a form that people can understand
and use. Information is data that has been shaped into a form that is meaningful and useful to human
beings. Information systems literacy is a broad-based understanding of information systems. It includes
a behavioral as well as a technical approach to studying information systems. In contrast, computer
literacy focuses primarily on knowledge of information technology. It is limited to understanding how
computer hardware and software works.

Explain how the Internet and the World Wide Web are related to the other technology components of
information systems.

The Internet and World Wide Web have had a tremendous impact on the role information systems play
in organizations. These two tools are responsible for the increased connectivity and collaboration within
and outside the organization. The Internet, World Wide Web, and other technologies have led to the
redesign

CRM systems consolidate customer data from multiple sources and provide analytical tools for
answering questions such as:

What is the value of a particular customer to the firm over his/her lifetime?

CRM tools integrate a business’s customer

-related processes and consolidate customer information from multiple communication channels, giving
the customer a consolidated view of the company.

Detailed and accurate knowledge of customers and their preferences help firms increase the
effectiveness of their marketing campaigns and provide higher-quality customer service and support.

Knowledge management systems

Enable organizations to better manage processes for capturing and applying knowledge and expertise.
These systems collect all relevant knowledge and experience in the firm, and make it available wherever
and whenever it is needed to improve business processes and management decisions. They also link the
firm to external sources of knowledge. Business benefits include:

KMS support processes for acquiring, storing, distributing, and applying knowledge, as well as processes
for creating new knowledge and integrating it into the organization.

KMS include enterprise-wide systems for managing and distributing documents, graphics, and other
digital knowledge objects; systems for creating corporate knowledge directories of employees with
special areas of expertise; office systems for distributing knowledge and information; and knowledge
work systems to facilitate knowledge creation.
KMS use intelligent techniques that codify knowledge and experience for use by other members of the
organization and tools for knowledge discovery that recognize patterns and important relationships in
large pools of data.

Explain how intranets and extranets help firms integrate information and business processes.

Because intranets and extranets share the same technology and software platforms as the Internet, they
are easy and inexpensive ways for companies to increase integration and expedite the flow of
information within the company (intranets alone) and with customers and suppliers (extranets). They
provide ways to distribute information and store corporate policies, programs, and data. Both types of
nets can be customized by users and provide a single point of access to information from several
different systems. Businesses can connect the nets to transaction processing systems easily and quickly.
Interfaces between the nets and TPS, MIS, DSS, and ESS systems provide input and output for users.

Why are systems for collaboration and teamwork so important and what technologies do they use?
Define collaboration and teamwork and explain why they have become so important in business today.
Collaboration

is working with others to achieve shared and explicit goals. It focuses on task or mission
accomplishment and usually takes place in a business, or other organizations, and between businesses.
Collaboration can be short-lived or longer term, depending on the nature of the task and the relation
ship among participants. It can be one-to-one or many-to-many.

Teamwork is part of the organization’s business structure for getting things done. Teams have a specific
mission. The members of a team need to collaborate on the accomplishment of specific tasks and
collectively achieve the team mission. Teams are often short-lived, depending on the problems they
tackle and the length of time needed to find a solution and accomplish the mission. Collaboration and
teamwork are important because:

Changing nature of work.

More jobs are becoming “interaction” jobs. These kinds of jobs

Require face-to-face interaction with other employees, managers, vendors, and customers. They require
systems that allow the interaction workers to communicate, collaborate and share ideas.

Growth of professional work.

Professional jobs in the service sector require close coordination and collaboration.

Changing organization of the firm

. Work is no longer organized in a hierarchical fashion as much as it is now organized into groups and
teams who are expected to develop their own methods for accomplishing tasks.
Changing scope of the firm.

Work is more geographically separated than before.

Emphasis on innovation.

Innovation stems more from groups and teams than it does from a single individual.

Changing culture of work and business

. Diverse teams produce better outputs, faster, than individuals working on their own.

List and describe the business benefits of collaboration.

The general belief is that the more a business firm is collaborative in nature, the more successful it will
beand that collaboration within and among firms is more essential than in the past. The overall
economic benefit of collaboration is significant.The business benefits of collaboration are listed in

Table 2.2, page 58:

Productivity

: people working together accomplish tasks faster, with fewer errors, than thoseworking alone.

Quality

: people can communicate errors and correct them faster when working together versusworking alone.

Innovation

: people working in groups can generate more innovative ideas than if they wereworking alone.

Customer service

: people working in teams can solve customer complaints and issues faster andmore effectively versus
working in isolation.

Financial performance

: collaborative firms have superior sales, sales growth, and financial performance.
Describe a supportive organization culture and business processes for collaboration.

Historically, organizations were built on hierarchies which did not allow much decision making,
planning,and organizing at lower levels of management or by employees. Communications were
generally verticalthrough management levels rather than horizontal between groups of employees.A
collaborative culture relies on teams of employees to implement and achieve results for goals set
bysenior managers. Policies, products, designs, processes, and systems are much more dependent on
teams atall levels of the organization to devise, to create, and to build. Rather than employees being
rewarded forindividual results, they are rewarded based on their performance in a team. The function of
middle managersin a collaborative business culture is to build the teams, coordinate their work, and
monitor their performance. In a collaborative culture, senior management establishes collaboration and
teamwork as vitalto the organization, and it actually implements collaboration for the senior ranks of
the business as well.

List and describe the various types of collaboration and communication systems.

15 categories of collaborative software tools

Email and instant messaging, White boarding, Collaborative writing, Web presenting,
Collaborativereviewing, Work scheduling, Event scheduling, Document sharing /wikis, File sharing, Mind
mapping,Screen sharing, Large audience, Webinars, Audio conferencing, Co-browsing, Video
conferencingSome of the more common enterprise-wide information systems that businesses can use
to supportinteraction jobs include:

Internet-based collaboration environments like Lotus Notes, Groove, and WebEx provide onlinestorage
space for documents, team communications (separated from email), calendars, and audio-visual tools
members can use to meet face-to-face.

Email and Instant Messaging (IM) are reliable methods for communicating whenever and
whereveraround the globe.

Cell phones and wireless handhelds give professionals and other employees an easy way to talk withone
another, with customers and vendors, and with managers. These devices have grown exponentiallyin
sheer numbers and in applications available.

Social networking is no longer just “social.” Businesses are realizing the value of providing easy ways

for interaction workers to share ideas and collaborate with each other.
Wikis are ideal tools for storing and sharing company knowledge and insights. They are often easierto
use and cheaper than more proprietary knowledge management systems. They also provide a
moredynamic and current repository of knowledge than other systems.

Virtual worlds house online meetings, training sessions, and “lounges” where real

-world people meet,interact, and exchange ideas.

Google Apps/Google sites allow users to quickly create online group-editable Web sites that
includecalendars, text, spreadsheets, and videos for private, group, or public viewing and editing.

Microsoft SharePoint software makes it possible for employees to share their Office documents
andcollaborate on projects using Office documents as the foundation.

5.

What is the role of the information systems function in a business?Describe how the information
systems function supports a business.

The information systems departments is the formal organizational unit responsible for
informationtechnology services. The information systems department is responsible for maintaining the
hardware,

software, data storage, and networks that comprise the firm’s IT infrastructure.

Compare the roles played by programmers, systems analysts, information systems managers, thechief
information officer (CIO), chief security officer (CSO), and chief knowledge officer (CKO).

Programmers are highly trained technical specialists who write the software instructions forcomputers.

Systems analysts constitute the principal liaisons between the information systems groups and the rest

of the organization. The systems analyst’s job is to translate business problems and requirements into

information requirements and systems.

Information systems managers lead teams of programmers and analysts, project managers,
physicalfacility managers, telecommunications mangers, or database specialists.

Chief information officer (CIO) is a senior manager who oversees the use of information technology
inthe firm.

Chief security officer (CSO) is responsible for information systems security in the firm and has the

principle responsibility for enforcing the firm’s information security policy. The CSO is responsible

for educating and training users and IS specialists about security, keeping management aware ofsecurity
threats and breakdowns, and maintaining the tools and policies chosen to implement security.