Chapter 1

Information
System in the
Digital Age
 Table of contents
• Why are information systems so essential for running and
managing a business today?
• What exactly is an information system?
• What information systems skills and knowledge are
essential for business careers?
How IS has changed the ways
you shop, purchase, and
consume media in particular?

For comparison, how did your

parent do these things in the
past?
How information systems are transforming business
• Emerging mobile digital platform
• Cell phones, smart-phones, tablet computers, email, and online
conferencing over the Internet have all become essential tools of
business.
• Growing business use of “big data” and cloud computing.
• Internet advertising continues to grow at around 15 percent per year.
• New laws require businesses to store more data for longer periods.
• Changes in business result in changes in jobs and careers.
Globalization Challenges and Opportunities
● Internet and global communications have greatly reduced
economic and cultural advantages of developed countries.
● Drastic reduction of costs of operating and transacting on global
scale
● Competition for jobs, markets, resources, ideas
● Increases in foreign trade and outsourcing
● Requires new understandings of skills, markets, opportunities
 Business Drivers of Information Systems
Businesses invest in IT to achieve six important business objectives:

1 3
2
Customer and Supplier Intimacy
Operational excellence New products, services, and business models
Customers who are served
Information systems and Information systems and technologies well become repeat
technologies help improve enable firms to create new products, customers who purchase
efficiency and productivity. services, and business models such as more. Close relationships
how a company produces, delivers, with suppliers result in
and sells its products and services lower costs.
 Business Drivers of Information Systems
Businesses invest in IT to achieve six important business objectives:

4 5
6
Improved Decision Competitive Advantage
Making
Achieving any of the previous four Survival
Real-time data improves business objectives represents the Businesses may need to
ability of managers to make achievement of a competitive invest in information
decisions. advantage. systems and technologies
because they are necessities
of doing business.
What exactly is an information
system? How does it work?
What are its people,
organizational, and technology
components?
 What is an Information System?
• Information technology (IT) consists of all the hardware
and software that a firm needs to use to achieve its
business objectives.
• Information systems can be defined technically as a set of
interrelated components that manage information to:
• Support decision making
• Control in an organization
• Help with analyze problems, visualize complex subject, and create
new products
 What is an Information System?

Data – streams of raw facts representing events

occurring in organizations or the physical environment
before they have been organized and arranged.

Information – data that have been shaped into a form

that is meaningful and useful to human beings.
 What is an Information System?

Data
Information

Example – 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.
 What is an Information System?
• Three activities in an information system produce the information
that organizations need to make decisions, control operations,
analyze problems, and create new products or services.
• Input – captures or collects raw data from within the organization or from
its external environment.
• Processing – converts this raw input into a meaningful form.
• Output or feedback
▪ Output transfers the processed information to the people who will use
it or to the activities for which it will be used.
▪ Information system also require feedback, which is output that is
returned to appropriate member s of organization to help them evaluate
or correct the input stage.
 What is an Information System?
Example of information system functions:
• 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.
 Dimension of Information Systems
• Using information systems effectively
requires an understanding of the
organization, people, and information
technology shaping the systems.
• An information system provides a
solution to important business problems
or challenges facing the firm.
 Dimension of Information Systems
Organizations
• Coordinates work through structured
hierarchy and through its business
process, which are logically related tasks
and behaviors for accomplishing work.
• Examples of business process:
developing a new product, fulfilling an
order, and hiring an employee.
 Dimension of Information Systems
Organizations
• Organizations’ business processes
include formal rules or informal rules.
• Example: how customer receives credit
or how a customer is billed is often
determined by an information system
that incorporates a set of formal business
process.
 Dimension of Information Systems
Organizations
• Each organization has a unique culture.
• Parts of an organization’s culture can
always be found embedded in its
information systems.
• Example: United Parcel Service’s
concern with placing service to customer
first.
 Dimension of Information Systems
People
• Information systems require skilled people to
build and maintain them or people who can
understand how to use the information in a
system to achieve business objectives.
• Employee attitudes about their jobs,
employers, or technology can have a
powerful effect on their abilities to use
information systems productively.
 Dimension of Information Systems
People
• The “people” dimension of systems is often
the most difficult to get right.
• Technologies change all the time, people do
not change very rapidly.
• In order to use technologies effectively,
people need training, and they need to think
intelligently about how their business works.
 Dimension of Information Systems
People
• Example: managers are the employees who
attempt to understand organizational issues
and challenges, and then use technologies to
solve the issues and meet the challenges.
 Dimension of Information Systems
Technology
• Information technology (IT) infrastructure
provides the foundation, or platform that
information systems are built on based on
technologies:
• Computer hardware
• Computer software
• Data management technology
• Networking and telecommunications technology
• Internet and Web, extranets, intranets
• Voice, video communications
What information systems skills
and knowledge are essential for
business careers?
How Information Systems Will Affect Business Careers
• Success in today’s job market requires a broad set of skills.
• Job candidates must have problem-solving skills as well as technical
skills so that they can complete specific tasks.
• The service sector will account for 95 percent of the new jobs that
are created or open up by 2022.
• Just having one set of skills is not a very wise idea when preparing
for future labor markets. The more skills you have (say language
skills plus information systems skills plus some finance skills) the
greater your attractiveness to future employers who may see you as
a multi-skilled person who could fit into a variety of jobs.
• The following sections describe how specific occupations will be
affected by information systems and what skill you should be building
in order to benefit from this emerging labor market.
How Information Systems Will Affect Business Careers
Accounting
• Accountants rely heavily on information systems to:
• Summarize transactions
• Create financial records
• Organize data
• Perform financial analysis
• Accountants require skills:
• Knowledge of databases and networks
• Online financial transactions and reporting systems
• How systems are used to achieve accounting functions
How Information Systems Will Affect Business Careers
Finance
• Relationship between information systems and financial
management and services is so strong that many advise finance
majors to co-major in information systems.
• Financial occupations skills:
• Use systems for financial reporting, direct investment activities,
implementation of cash management strategies
• Plan, organize, implement information systems strategies for the firm
How Information Systems Will Affect Business Careers
Marketing
• No field has undergone more technology-driven change in the past
five years than marketing and advertising.
• E-commerce activity moving rapidly to the Internet.
• Example: Internet advertising, product branding and customer
communication are moving online at a fast pace.
• Marketing field skills:
• Work with databases for tracking and reporting on customer behavior,
product performance, customer feedback, product development.
• Enterprise systems for product management, sales force management,
customer relationship management.
How Information Systems Will Affect Business Careers

Operations management in services and manufacturing

• Production managers, administrative service managers, and
operations analysts will be employing information systems and
technologies every day to accomplish their jobs, with extensive use
of database and analytical software.
• Skills:
• Hardware and software platforms for operations management.
• Use database and analytical software for coordinating and optimizing
resources required for producing goods and services.
How Information Systems Will Affect Business Careers

Management
• The job of management has been transformed by information
systems.
• Impossible to manage business today without information systems.
• Manager skills:
• Use of information systems for each function of job, from desktop
productivity tools to applications coordinating the entire enterprise.
How Information Systems Will Affect Business Careers

Information systems
• The information system field is one of the fastest-changing and
dynamic profession because information technologies are among
most important tools for achieving business firms’ key objectives.
• Skills:
• Uses of new and emerging hardware and software to achieve six
business objectives.
• An ability to take a leadership role in the design and implementation of
new information systems.
How Information Systems Will Affect Business Careers
Outsourcing and offshoring
• The Internet has created new opportunities for outsourcing many
information systems jobs, along with many other service sector and
manufacturing jobs.
• Benefits:
• Lower cost of building and maintaining systems
• Increased need for managerial positions
How Information Systems Will Affect Business Careers
Common requirements for all business majors:
• Understand how information systems and technologies can help
organization achieve business objectives.
• Business analytics and business intelligent are important skills.
• Ability to work with technology specialists and other business
professionals in designing and building systems.
• Sensitivity to the ethical, social, and legal issues systems raise.
• The ability to communicate verbally and in writing and to collaborate
with others on a team have also become increasingly important skills
in all areas of today’s workplace.
Summary
• The important of information
systems for running and
managing a business today.
• Information system.
• People, organizational, and
technology components.
• Information systems skills and
knowledge are essential for
business careers.