Business Information Systems

Management
Anindita Paul
Assistant Professor
Indian Institute of Management
Kozhikode
“The greatest glory in living
lies not in never falling,
but in rising every time we
fall.”
Nelson Mandela

(18 July 1918 – 5

December 2013)

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 Syllabus
 Overview: Business Information Systems Management
 Perspectives Case-Makemytrip

Module 1: Information Systems and Managerial Challenges

• Enterprise IT Applications for Operational Excellence

• E-Business and E-Commerce
• Knowledge Management and Decision-Making with IT
• IT Infrastructure and Management

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 Syllabus (contd.)
Module 2: Impact of IT on Business Strategy
• Business Models
• IT impact on Business Models and Organizations
• Strategic Information Systems Planning
• IT Service and IT Project Delivery

Module 3: IT Leadership and Social Impact

• IT Governance and Leadership
• E-Governance and ICT for Development
• Ethical Issues in ICT and Green IT
• Society of the Internet

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 Syllabus (contd.)
Text Book
• K.C. Laudon & J.P. Laudon (2013), Management
Information Systems: Managing the Digital Firm, 12
edition, Pearson Education
• Lynda M Applegate, Robert D. Austin, Deborah L.
Soule (2008) Corporate Information Strategy and
Management 8th Edition. McGraw Hill International
• Other readings will be provided

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 Scheme of Evaluation
• Mid Term Exam 25 Marks
• End Term Exam 30 Marks
• Seminar 05 Marks
• Quiz/Course Participation 20 Marks
• Project & Presentation 20 Marks
_____________________________________
Total 100 Marks

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 Quiz
• Case quiz on the day of the case
• Prescribed readings for each session will be
included in the exams (including both mid and
end-term exam)

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 Seminar
• Project Groups of 5-6 students each will be formed/assigned and named.
• Each group will choose at least two relevant and current topics related to
the session of the day they will be presenting.
• The topics have to be submitted the first week of class in their order of
preference.
• One of the chosen topics will be approved by the faculty.
• In case the group is not able to decide or if the topic decided is not
approved by the faculty then a topic will be assigned to the group that
they need to present on.
• Seminar slides should be forwarded to the faculty at least a day in advance
of the presentation.
• The presentation should be no more than 10 mins and should include
– a short description of the topic,
– why is it important,
– relevant industry examples

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 Term Project
• Objective - To learn how various concepts learned in
the course are applied across business organizations in
India.
• Topics that explore a particular aspect of IT in an Indian
organization will be assigned.
• Primary or secondary sources could be used for
information gathering.
• Interim report to be submitted by 5 Feb and arrange a
time to meet faculty on 3 Feb and 4 Feb for briefing
progress.
• Final report to be submitted by 2 Mar.
• Final Presentations on 6 Mar and 11 Mar.
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Overview: Business Information
Systems Management

BISM 1
Anindita Paul

Readings – Laudon and Laudon Chapters 1 & 2

 Learning Objective
• Information systems in business and their relationship
to globalization
• Why information systems are so essential in business
today
• Information system and its components
• Complementary assets and its significance
• Business Processes and relation to IS
• Systems and their use to different management groups
in a business
• Systems for collaboration and teamwork
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 Information Systems
vs.
Information Technology

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 IPL Team Strikes Gold with IT

• Problem: No sure-shot way to improve team performance. Lack of player performance

related data

• Solutions: Used information systems to capture play and analyze statistical data connected to
video clips on categories such as who bowled, who is the batsman, who was the non-striker,
where did the ball pitch, what did the ball do, where was the ball hit, no. of runs, who fielded,
how did he field it, which end did he throw, what was the outcome of the ball etc.

• Sports Mechanics collected and organized fine-grained statistical data and related it to
associated video clips.

• Demonstrates IT’s role in providing new services that can help managers in decision-making
and viewing player moves based on set criteria

• Illustrates the benefits of utilizing technology for enhancing capabilities of decision-making

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The Role of Information Systems in Business Today

• How information systems are transforming business

Increase in wireless technology use, Web sites
Increased business use of Web 2.0 technologies
Cloud computing, mobile digital platform allow more distributed work,
decision-making, and collaboration

• Globalization opportunities
Internet has drastically reduced costs of operating on global scale
Presents both challenges and opportunities

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The Role of Information Systems in Business Today

Information Technology Capital Investment

Information technology capital investment, defined as hardware, software, and

communications equipment, grew from 32 percent to 52 percent of all invested capital
between 1980 and 2009.

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The Role of Information Systems in Business Today

• In the emerging, fully digital firm

Significant business relationships are digitally enabled and mediated
Core business processes are accomplished through digital networks
Key corporate assets are managed digitally

• Digital firms offer greater flexibility in organization and management

Time shifting, space shifting

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The Role of Information Systems in Business Today

• Growing interdependence between ability to use information technology

and ability to implement corporate strategies and achieve corporate
goals
• Business firms invest heavily in information systems to achieve six
strategic business objectives:
Operational excellence
New products, services, and business models
Customer and supplier intimacy
Improved decision making
Competitive advantage
Survival

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The Role of Information Systems in Business Today

The Interdependence Between Organizations and Information Technology

Figure 1.2 In contemporary systems there is a growing interdependence between a firm’s information systems and its
business capabilities. Changes in strategy, rules, and business processes increasingly require changes in
hardware, software, databases, and telecommunications. Often, what the organization would like to do
depends on what its systems will permit it to do.

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 Perspectives on Information Systems

• Information system:
Set of interrelated components
Collect, process, store, and distribute information
Support decision making, coordination, and control

• Information vs. data

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

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Perspectives on Information Systems

Data and Information

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

Functions of an
Information System
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 solution 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

Levels in a Firm
Business organizations are
hierarchies consisting of three
principal levels: senior
management, middle
management, and operational
management. Information
systems serve each of these
levels. Scientists and
knowledge workers often work
with middle management.

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 Perspectives on Information Systems

• Organizational dimension of information systems

Separation of business functions
 Sales and marketing
 Human resources
 Finance and accounting
 Manufacturing and production
Unique business processes
Unique business culture
Organizational politics

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 Perspectives on Information Systems

• Management dimension of information systems

Managers set organizational strategy for responding to business

challenges

In addition, managers must act creatively:

 Creation of new products and services

 Occasionally recreating 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, World Wide Web
IT infrastructure: provides platform that system is built on

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 Perspectives on Information Systems

• Business perspective on information systems:

Information system is instrument for creating value

Investments in information technology will result in superior returns:

 Productivity increases
 Revenue increases
 Superior long-term strategic positioning

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 Perspectives on Information Systems

• Business information value chain

Raw data acquired and transformed through stages that add value
to that information

Value of information system determined in part by extent to which it

leads to better decisions, greater efficiency, and higher profits

• Business perspective:

Calls attention to organizational and managerial nature of

information systems

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Perspectives on Information Systems

The Business Information Value Chain

From a business perspective, information systems are part of a series of value-adding activities for
acquiring, transforming, and distributing information that managers can use to improve decision
making, enhance organizational performance, and, ultimately, increase firm profitability.

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 Perspectives on Information Systems

Variation in Returns on
Information Technology
Investment

Although, on average,
investments in information
technology produce returns
far above those returned by
other investments, there is
considerable variation
across firms.

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 Perspectives on Information Systems

• Investing in information technology does not guarantee good returns

• Considerable variation in the returns firms receive from systems
investments
• Factors:
Adopting the right business model
Investing in complementary assets (organizational and management
capital)

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 Perspectives on Information Systems

• Complementary assets:

Assets required to derive value from a primary investment

Firms supporting technology investments with investment in

complementary assets receive superior returns

Example: invest in technology and the people to make it work properly

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 Perspectives on Information Systems

• Complementary assets include:

Organizational assets, e.g.
 Appropriate business model
 Efficient business processes
Managerial assets, e.g.
 Incentives for management innovation
 Teamwork and collaborative work environments
Social assets, e.g.
 The Internet and telecommunications infrastructure
 Technology standards
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 Business Processes
and
Information Systems

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 Business Processes and
Information Systems

• Business processes:
Workflows of material, information, knowledge
Sets of activities, steps
May be tied to functional area or be cross-functional

• Businesses: Can be seen as collection of business processes

• Business processes may be assets or liabilities

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 Business Processes and
Information Systems
The Order Fulfillment Process

Fulfilling a customer order involves a complex set of steps that requires the close coordination of
the sales, accounting, and manufacturing functions.

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 Types of Information Systems

• Systems from a constituency perspective

Transaction processing systems: supporting operational level
employees
Management information systems and decision-support
systems: supporting managers
Executive support systems: supporting executives

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 Types of Information Systems

• Relationship of systems to one another

TPS: Major source of data for other systems
ESS: Recipient of data from lower-level systems
Data may be exchanged between systems
In reality, most businesses’ systems are only loosely
integrated (but they are getting better!)

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 Types of Information Systems

• Enterprise applications
Systems for linking the enterprise
Span functional areas
Execute business processes across 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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 Types of Information Systems

Enterprise
Application
Architecture

Enterprise
applications
automate processes
that span multiple
business functions
and organizational
levels and may
extend outside the
organization.

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 Types of Information Systems

• Enterprise systems

Collects data from different firm functions and stores data in single
central data repository
Resolves problem of fragmented, redundant data sets and systems
Enable:
 Coordination of daily activities
 Efficient response to customer orders (production, inventory)
 Provide valuable information for improving management decision
making

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 Types of Information Systems

• Alternative tools that increase integration and expedite the flow of

information

Intranets:
 Internal company Web sites accessible only by employees

Extranets:
 Company Web sites accessible externally only to vendors and
suppliers
 Often used to coordinate supply chain

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 Types of Information Systems

• E-business
Use of digital technology and Internet to drive major business
processes

• E-commerce
Subset of e-business
Buying and selling goods and services through Internet

• E-government:
Using Internet technology to deliver information and services to
citizens, employees, and businesses

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 Systems for Collaboration and Teamwork

• Technology for collaboration and teamwork

15 categories of collaborative software tools

 Email and instant messaging, White boarding, Collaborative
writing, Web presenting, Collaborative reviewing, Work scheduling,
Event scheduling, Document sharing /wikis, File sharing, Mind
mapping, Screen sharing, Large audience, Webinars, Audio
conferencing, Co-browsing, Video conferencing

Contd…

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Systems for Collaboration and Teamwork

Social Networking
Wikis
Virtual Worlds
Internet-based Collaboration Environments
 Virtual meeting systems (telepresence)
 Google Apps/Google sites
 Microsoft SharePoint
 Lotus Notes

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 The Information Systems Function in Business

• Information systems department:

Formal organizational unit responsible for information technology
services
Often headed by chief information officer (CIO)
 Other senior positions include chief security officer (CSO), chief
knowledge officer (CKO), chief privacy officer (CPO)
Programmers
Systems analysts
Information systems managers

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 The Information Systems Function in Business

• End users
Representatives of other departments for whom applications are
developed
Increasing role in system design, development
• IT Governance:
Strategies and policies for using IT in the organization
Decision rights
Accountability
Organization of information systems function
 Centralized, decentralized, etc.

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• Next Class-

o Groups to submit their seminar topics

o Read Makemytrip case

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