Foundations of Information Systems

IS101
Overview

Information systems IS Role

in organizations-part 2 Business
Objectives

By
Dr. Nora Shoaip
Lecture 2

Damanhour University
Faculty of Computers & Information Sciences
Department of Information Systems

2024 - 2025
 Learning Objectives
1. Understand the effects of information systems on business
2. Investigate the relationship between information systems and
globalization.
3. Explain why information systems are so essential in business today.
4. Define an information system and describe its management,
organization, and technology components.

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Information Systems and Strategic Business
Objectives
>> Greater interdependence between the firm’s
strategic objectives and Information systems, How?

Answer, changes in firm’s strategy and rules

require changes in hardware, software, database,
and telecommunications (all are components of
an information system).
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Information Systems and Strategic Business
Objectives

There is a growing interdependence between a firm’s information systems and its business
objectives.
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Information Systems and Strategic Business
Objectives
• Looking to the future, what an organization would like to do
depends on what its systems will permit it to do.

• Therefore, business firms invest heavily in developing their

information systems

• In general, firms attempt to achieve six strategic

objectives (listed next) when developing information
systems
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Information Systems and Strategic Business
Objectives
• Six strategic business objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier strategic relationships
4. Improved decision making
5. Competitive advantage
6. Survival
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Information Systems and Strategic Business
Objectives
• Operational excellence:
– Improvement of efficiency to attain higher
profitability
– Information systems, technology an important tool in
achieving greater efficiency and productivity
– Walmart’s Retail Link system links suppliers to stores
for superior replenishment system
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Information Systems and Strategic Business
Objectives
• New goods, services, and business models:
– Information systems and technology a major enabling tool
for new products and business models
– Business model: describes how company produces,
delivers, and sells product or service to create wealth
• Examples: Apple’s iPod/iPad vs. regular music stores,
and Netflix vs. Blockbuster video/DVD stores

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Information Systems and Strategic Business
Objectives
• Customer and supplier intimacy:
– Serving customers well leads to customers returning, which
raises revenues and profits.
• Example: High-end hotels that use computers to track customer
preferences, used to monitor and customize environment
– Intimacy with suppliers allows them to provide vital inputs, which
lowers costs.
• Example: JCPenney’s information system which links sales records to
contract manufacturer
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 Information Systems and Strategic Business Objectives

• Improved decision making

– Without accurate information:
• Managers must use forecasts, best guesses, luck
• Results in:
– Overproduction, underproduction
– Misallocation of resources
– Poor response times
• Poor outcomes raise costs, lose customers
– Example: Verizon’s Web-based digital dashboard to
provide managers with real-time data on customer
complaints, network performance, line outages, and so on
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Information Systems and Strategic Business
Objectives
• Competitive advantage
– All of the previous objectives create competitive
advantage for firms
• Delivering better performance
• Charging less for superior products
• Responding to customers and suppliers in real time
• Examples: Apple, Walmart

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Information Systems and Strategic Business
Objectives

• Survival
– Information technologies as necessity of business
– Industry-level changes
• Example: Citibank’s introduction of ATMs

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 – Data are streams of raw facts.
Information vs. – Information is data shaped into
Data meaningful form

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful
information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for a
specific store or sales territory.

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 Perspectives on Information Systems
• Four activities of information systems produce
information the firm need
– Input: Captures raw data from organization or external
environment
– Processing: Converts raw data into meaningful form
– Output: Transfers processed information to people or activities that
use it
– Feedback:
• Output is returned to appropriate members of organization to help
evaluate or correct input stage.
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 Perspectives on Information Systems
• Four activities of information systems produce
information the firm need
– Input: Captures raw data from organization or external
environment
– Processing: Converts raw data into meaningful form
– Output: Transfers processed information to people or activities that
use it
– Feedback:
• Output is returned to appropriate members of organization to help
evaluate or correct input stage.
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 Functions of an Information Systems
An information system contains
information about an organization and its
surrounding environment.
Three basic activities— input, processing,
and output—produce the information
organizations need. Feedback is output
returned to appropriate people or
activities in the organization to evaluate
and refine the input.
Environmental actors, such as customers,
suppliers, competitors, stockholders, and
regulatory agencies, interact with the
organization and its information systems.

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 Perspectives on Information Systems
Information systems are more
than computers . Using
information systems effectively
requires an understanding of
the organization, management,
and information technology
shaping the systems. An
information system creates
value for the firm as an
organizational and
management solutio2n8 to
challenges posed by the
environment.

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 Perspectives on Information Systems
• Organizational dimension of information
systems
– Hierarchy of authority, responsibility
• Senior management
• Middle management
• Operational management
• Knowledge workers
• Data workers
• Production or service workers

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 Perspectives on Information Systems
• Organizational dimension of information
systems (cont.)
– Separation of business functions
• Sales and marketing
• Finance and accounting
• Manufacturing and production
– Unique business processes
– Unique business culture

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 Perspectives on Information Systems
• Management dimension of information
systems
– Managers set organizational strategy for
responding to business challenges
– Management needs real-time data/ information
– In addition, managers must act creatively:
• Creation of new products and services
• Occasionally re-creating the organization
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 Perspectives on Information Systems

• Technology dimension of information systems

– Computer hardware and software
– Data management technology
– Networking and telecommunications technology
• Networks, the Internet, intranets and extranets
– IT infrastructure: provides platform that system is built
on

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 >> Management Information Systems,
Source Managing the Digital Firm, 13 Edition
(2014), Laudon and Laudon.

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