Misc Hap 1

Information Systems in Global Business Today
Chapter 1
This chapter presents an overview of the five basic areas of information systems
knowledge needed by business professionals, including the conceptual system
components and major types of information systems.
Section I: Foundation Concepts: Information Systems in Business

Section II: Foundation Concepts: The Components of Information Systems
Section I: Foundation Concepts: Information Systems in Business
An understanding of the effective and responsible use and management of information

systems is important for managers and other business knowledge workers in today’s
global information society. Information systems and technologies have become a vital
component of successful businesses and organizations. Information systems constitute an
essential field of study in business administration and management, as they are
considered a major functional area in business operations.
1. What You Need to Know:
Managerial end users need to know how information systems can be employed
successfully in a business environment. The important question for any business end user
or manager is: What do you need to know in order to help manage the hardware,
software, data, and network resources of your business, so they are used for the strategic
success of your company?
An IS Framework for Business Professionals:
Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 1

Vapi for MIS(A.Y:2010-12)
Managers or business professionals are not required to know the complex technologies,
abstract behavioural concepts, or the specialized applications involved in the field of
information systems. Figure illustrates a useful conceptual framework that outlines what
a manager or business professional needs to know about information systems. It
emphasizes five areas of knowledge:
Foundation Concepts Fundamental behavioral, technical, business, and

managerial concepts
about the components and roles of information systems.
Information Technologies Major concepts, developments, and management issues in

information technology (hardware, software, networks, data
resource management, and other information processing
technologies such as the Internet).
Business Applications The major uses of information systems for the operations,
management,
and competitive advantage of an e-business enterprise,
including electronic business, commerce, collaboration and
decision-making using the Internet, intranets, and extranets.
Development Processes How business professionals and information specialists

plan, develop and
implement information systems to meet e-business
opportunities using several strategic planning and
application development approaches.
Management Challenges The challenges of effectively and ethically managing e-

business technologies, strategies, and security at the end
user, enterprise, and global levels of a business.
2. Information technology and systems have revolutionized firms and industries,

becoming the largest component of capital investment in many industrialized societies.
Investment in information technology accounts for approximately 50 percent or more in
some of the countries.
Information systems are transforming business and the visible results of this include the
increased use of cell phones and wireless telecommunications devices, a massive shift
toward online news and information, booming e-commerce and Internet advertising, and
new federal security and accounting laws that address issues raised by the exponential
growth of digital information. The Internet has also drastically reduced the costs of
businesses operating on a global scale.
These changes have led to the emergence of the digital firm, a firm in which:

• Most of the firm's significant business relationships with customers, suppliers,

and employees are digitally enabled and mediated.
• Core business processes, or logically related business tasks, are accomplished

through digital networks.
• Key corporate assets (intellectual property, core competencies, and financial and
human assets) are managed through digital means
• Business responses to changes in their environment are enhanced through digital

communications, allowing for time shifting (business being conducted 24x7) and
space shifting (business being conducted globally or beyond traditional
geographic boundaries).
Information systems are essential for conducting day-to-day business in the U.S. and
most other advanced countries, as well as achieving strategic business objectives. Some
firms, such as Amazon and E*Trade, would be nonexistent without information systems.
Some service industries, such as finance, insurance, and real estate industries, could not
operate without information systems. The ability of a firm to use IT is becoming
intertwined with the firm's ability to implement corporate strategy.
3. Growing interdependence between ability to use information technology and

ability to implement corporate strategies and achieve corporate goals
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.
4. Business firms invest heavily in information systems to achieve six strategic

business objectives:
Operational excellence:
Improvement of efficiency to attain higher profitability
Information systems, technology an important tool in achieving greater efficiency and
productivity
Wal-Mart’s RetailLink system links suppliers to stores for superior replenishment system
New products, services, and business models:

A business model describes how a company produces, delivers, and sells a product or
service to create wealth. Information systems and technologies create opportunities for
products, services, and new ways to engage in business.
Examples: Apple’s iPod, iTunes, and iPhone, Netflix’s Internet-based DVD rentals
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 and use to
monitor and customize environment
Intimacy with suppliers allows them to provide vital inputs, which lowers costs
Example: J.C.Penney’s information system which links sales records to contract
manufacturer
Improved decision making

Without accurate and timely information, business managers must make decisions based
on forecasts, best guesses, and luck, a process that results in over and under-production of
goods, that further leads to misallocation of resources, poor response times,raising costs,
and the loss of customers.
Example: Verizon’s Web-based digital dashboard to provide managers with real-time
data on customer complaints, network performance, line outages, etc.
Competitive advantage
Implementing effective and efficient information systems can allow a company.
To deliver better performance
Charge less for superior products
Respond to customers and suppliers in real time
Add up to higher sales and profits than their competitors.
Example: Toyota and TPS (Toyota Production System) enjoy a considerable advantage
over competitors – information systems are critical to the implementation of TPS
Survival
Information systems can also be a necessity of doing business.

A necessity may be driven by industry-level changes, as in the implementation of ATMs

in the retail banking industry.
A necessity may also be driven by governmental regulations, such as federal or state
statutes requiring a business to retain data and report specific information
5. 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
Organizational dimension of information systems

Hierarchy of authority, responsibility

The key elements of an organization are its people, structure, business processes, politics,
and culture. An organization coordinates work through a structured hierarchy and formal
standard operating procedures. Managerial, professional, and technical employees form
the upper levels of the organization's hierarchy while lower levels consist of operational
personnel.
Senior management makes long-range strategic decisions and ensures the firm's
financial performance.
Middle management carries out the plans of senior management
Operational management monitors the firm's daily activities.
Knowledge workers such as engineers and scientists design products and create and
distribute new knowledge for the organization.
Data workers such as secretaries process the organization's paperwork.
Production or service workers produce the products or services.
Experts are employed for the major business functions: the specialized tasks performed
by organizations, which consist of sales and marketing, manufacturing and production,
finance and accounting, and human resources.
An organization coordinates work through its hierarchy and business processes. These
processes may be documented and formal, or informal, unwritten work processes, such as
how to handle a telephone call.
Each organization has a unique culture, or fundamental set of assumptions, values, and
ways of doing things, that are accepted by most of its members. Parts of an organization's
culture can be found in its information systems.
For example, UPS's organizational focus on customer service can be found in the
package tracking system available to customers. Information systems may also reflect the
organizational politics or conflicts that result from differing views and opinions in an
organization.
Information systems are also a key component in the ability of management to make
sense of the challenges facing a company and in management's ability to create new
products and services, manage the company, and even re-create the organization from
time to time.
Organizational dimension of information systems (cont.)

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

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 re-creating the organization
Technology dimension of information systems

Information systems are also a key component in the ability of management to make
sense of the challenges facing a company and in management's ability to create new
products and services, manage the company, and even re-create the organization from
time to time.
Information technology is one of the many tools used by management to cope with
change. A firm's information technology (IT) infrastructure is a technology platform
or foundation on which a firm can build its information systems. IT infrastructure
consists of:
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
The Internet is the world's largest and most widely used network. The Internet is a
global network that uses universal technology standards to connect many private and
public networks. The universal standards and technologies used in the Internet are also
used in systems and networks within the firm. Intranets are internal corporate networks
based on Internet technology, and extranets are corporate networks extended to
authorized users outside of the firm.
The World Wide Web is a service provided by the Internet that uses universally
accepted standards for storing, retrieving, formatting, and displaying information in a
page format on the Internet. Web pages contain text, graphics, animations, sound, and
video and are linked to other Web pages. The Web can serve as the foundation for new
kinds of information systems such as UPS's Web-based package tracking
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
6. Business information value chain

Every business has an information value chain in which raw data is systematically
acquired and then transformed through various stages that add value to that information.
The value of an information system to a business, as well as the decision to invest in any
new information system, is, in large part, determined by the extent to which the system
will lead to better management decisions, more efficient business processes, and higher
firm profitability.
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 The business perspective calls attention to the organizational and
managerial nature of information systems. An information system represents an
organizational and management solution based on information technology to a challenge
or problem posed by the environment.
7. Investing in information technology does not guarantee good returns
Some firms achieve better results from their information systems than others. Studies of
returns from information technology investments show that there is considerable
variation in the returns firms receive.

Factors:
Failure to adopt the right business model that suits the new technology
Investing in complementary assets (organizational and management capital)
8. Complementary assets:
Information technology investments cannot make organizations and managers more
effective unless they are accompanied by complementary assets:.
Assets required deriving value from a primary investment

Firms supporting technology investments with investment in complementary assets
receive superior returns
E.g.: invest in technology and the people to make it work properly

For instance, to realize value from automobiles requires complementary investments in
highways, roads, gasoline stations, repair facilities, and a legal regulatory structure to set
standards and control drivers
Complementary assets include:
Organizational assets: These include a supportive business culture that values efficiency
and effectiveness, an appropriate business model, efficient business processes,
decentralization of authority, highly distributed decision rights, and a strong information
system (IS) development team.
Example: Appropriate business model, Efficient business processes
Managerial assets: These include
Strong senior management support for change,
Incentive systems that monitor and reward individual innovation,
An emphasis on teamwork and collaboration, training programs,
a management culture that values flexibility and knowledge.
Social investments
These are not made by the firm but by the society at large, other firms, governments, and
other key market actors, such as the Internet, educational systems, network and
computing standards, regulations and laws, and the presence of technology and service
firms
The Internet and telecommunications infrastructure

Technology standards

Research indicates that firms that support their technology investments with investments
in complementary assets, such as new business processes or training, receive superior
returns. These investments in organization and management are also known as
organizational and management capital
9. Contemporary Approaches to Information Systems
Information systems are sociotechnical systems. Although they are composed of

machines, devices, and "hard" physical technology, they require substantial social,
organizational, and intellectual investments to make them work properly. Since problems
with information systems—and their solutions—are rarely all technical or behavioral, a
multidisciplinary approach is needed
Technical approach
Emphasizes mathematically based models
Computer science, management science, operations research
Behavioral approach
Behavioral issues (strategic business integration, implementation, etc.)
Psychology, economics, sociology
Management Information Systems

Combines computer science, management science, operations research and practical
orientation with behavioral issues
Four main actors

Suppliers of hardware and software

Business firms
Managers and employees
Firm’s environment (legal, social, cultural context)
Information systems are sociotechnical systems. Although they are

composed of machines, devices, and "hard" physical technology,
they require substantial social, organizational, and intellectual
investments to make them work properly. Since problems with
information systems—and their solutions—are rarely all technical or
behavioral, a multidisciplinary approach is needed
10. The Fundamental Roles of IS in Business
There are three fundamental reasons for all business applications of information
technology. They are found in the three vital roles that information systems can perform
for a business enterprise:
● Support of its business processes and operations.

Example: Most retail stores now use computer-based information systems to help them
record customer purchases, keep track of inventory, pay employees, buy new
merchandise, and evaluate sales trends.
● Support of decision making by its employees and managers.

Example: Decisions about what lines of merchandise need to be added or discontinued, or
about what kind of investment they require, are typically made after an analysis provided
by computer-bases information systems.
● Support of its strategies for competitive advantage.

Example: Store management might make a decision to install touch-screen kiosks in all
of their stores, with links to their e-commerce website for online shopping. This might
attract new customers and build customer loyalty because of the ease of shopping and
buying merchandise provided by such information systems.
11. Managerial Challenges of Information Technology:
For managerial end users, the information systems function represents:

• A major functional area of business that is important to a business’ success
• An important factor affecting operational efficiency, employee productivity and
morale, and customer service and satisfaction.
• A major source of information and support needed to promote effective decision
making by managers.
• An important ingredient in developing competitive products and services that
gives an organization a strategic advantage in the marketplace.
• A major part of the resources of an organization and its cost of doing business
• A vital, dynamic, and challenging career opportunity for many men and women.
12. Success and Failure with IT:
Is important that students realize that information technology and information systems
can be mismanaged and misapplied so that they create both technological and business
failure.
Top Five Reasons for Success Top Five Reasons for Failure

User involvement Lack of user input

Executive management support Incomplete requirements and specifications
Clear statement of requirements Changing requirements and specifications
Proper planning Lack of executive support
Realistic expectations Technological incompetence
13. Developing IS Solutions:
Developing information system solutions to business problems is the responsibility of

many business professionals today.
For example:
• As a business professional, you will be responsible for proposing or developing
new or improved uses of information technology for your company.
• As a business manager, you will frequently manage the development efforts of
information systems specialists and other business end users.
14. Challenges of Ethics and IT:
As a prospective managerial end user and knowledge worker in a global society, you
should also become aware of the ethical responsibilities generated by the use of
information technology.
For example:
• What uses of information technology might be considered improper,
irresponsible, or harmful to other individuals or to society?
• What is the proper use of an organization’s information resources?
• What does it take to be a responsible end user of information technology?

• How can you protect yourself from computer crime and other risks of information
technology?
Ethical dimensions of information systems deal with ensuring that information

technology and information systems are not used in an improper or irresponsible manner
against other individuals or to society.
A major challenge for our global information society is to manage its information
resources to benefit all members of society while at the same time meeting the strategic
goals of organizations and nations. For example, we must use information systems to
find more efficient, profitable and socially responsible ways of using the world’s limited
supplies of material, energy, and other resources.
Challenges of IT Careers:
• Information technology and its uses in information systems have created
interesting, highly paid, and challenging career opportunities.
• Employment opportunities in the field of information systems are excellent, as
organizations continue to expand their use of information technology.
• Employment surveys continually forecast shortages of qualified information systems
personnel in a variety of job categories.
• Job requirements in information systems are continually changing due to dynamic
developments in business and information technology.
15. The IS Function:
The information systems function represents:

• A major functional area of business that is as important to business success as the
functions of accounting, finance, operations management, marketing, and human
resource management.
• An important contributor to operational efficiency, employee productivity and
morale, and customer service and satisfaction.
• A major source of information and support needed to promote effective decision
making by managers and business professionals.
• A vital ingredient in developing competitive products and services that gives an
organization a strategic advantage in the global marketplace.
• A dynamic, rewarding, and challenging career opportunity for millions of men
and women.
• A key component of the resources, infrastructure, and capabilities of today’s
internetworked e-business enterprise.

Section II: Foundation Concepts: The Components of Information

Systems
System Concepts: A Foundation
System concepts underlie the field of information systems. Understanding system

concepts helps in understanding many other concepts in the technology, application,
development, and management of information systems.
System concepts help you understand:
• Technology. That computer networks are systems of information processing

components that uses a variety of hardware, software, data management, and
telecommunication technologies.
• Applications. That electronic business and commerce involves interconnected

business information systems.
• Development. That developing ways to use information technology in business

includes designing the basic components of the information systems.
• Management. That managing information technology emphasizes the quality,

strategic business value, and security of an organization’s information systems.
16. What is a System?
Question: What is a system as it applies to the concept of an information system?
Answer: A system is a group of interrelated components working together toward a

common goal by accepting inputs and producing outputs in an organized
transformation process.
A system (sometimes called a dynamic system) has three basic interacting components or
functions. These include:
• Input involves capturing and assembling elements that enter the system to be
processed.
• Processing involves transformation processes that convert input into output.
• Output involves transferring elements that have been produced by a

transformation process to their ultimate destination.

Feedback and Control:
Two additional components of the system concept include feedback and control. A
system with feedback and control components is sometimes called a cybernetic system,
that is, a self-monitoring, self-regulating system.
• Feedback is data about the performance of a system.
• Control involves monitoring and evaluating feedback to determine whether a

system is moving toward the achievement of its goals. The control function
then makes necessary adjustments to a system's input and processing
components to ensure that it produces proper output.
Other System Characteristics
A system does not exist in a vacuum; rather, it exists and functions in an environment
containing other systems.
Subsystem: A system that is a component of a larger system, where the

larger system is its environment.

System Boundary: A system is separated from its environment and other systems by
its system boundary.
Interface: Several systems may share the same environment. Some of these
systems may be connected to one another by means of a shared
boundary, or interface.
Open System: A system that interacts with other systems in its environment is
called an open system (connected to its environment by exchanges
of inputs and outputs).
Adaptive System: A system that has the ability to change itself or its environment in
order to survive is called an adaptive system.
17. Information system:

Set of interrelated components
Collect, process, store, and distribute information
Support decision making, coordination, and control
An IS can be any organized combination of people, hardware, software, communications

networks, and data resources that collects, transforms and disseminates information in an
organization.
Information vs. data

Data are streams of raw facts
Information is data shaped into meaningful form
Information system: Three activities produce information organizations 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 returned to appropriate members of organization to help evaluate or

correct input stage
Computer/Computer program vs. information system: Computers and software are

technical foundation and tools, similar to the material and tools used to build a house

18. Components of An Information System:
An information system model expresses a fundamental conceptual framework for the

major components and activities of information systems. An information system depends
on the resources of people, hardware, software, data, and networks to perform input,
processing, output, storage, and control activities that convert data resources into
information products.
The information systems model outlined in the text emphasizes four major concepts that
can be applied to all types of information systems:
• People, hardware, software, data, and networks, are the five basic resources of
information systems.
• People resources include end users and IS specialists, hardware resources consist
of machines and media, software resources include both programs and
procedures, data resources can include data and knowledge bases, and network
resources include communications media and networks.
• Data resources are transformed by information processing activities into a variety
of information products for end users.
• Information processing consists of input, processing, output, storage, and control
activities.
19. Information System Resources:

The basic IS model shows that an information system consists of five major resources:
People Resources:
People are required for the operation of all information systems. These people resources
include end users and IS specialists.
• End Users (also called users or clients) are people who use an information
system or the information it produces. Most of us are information system end
users. And most end users in business are knowledge workers, that is, people
who spend most of their time communicating and collaborating in teams of
workgroups and creating, using, and distributing information.
• IS Specialists are people who develop and operate information systems. They
include system analysts, software developers, system operators, and other
managerial, technical, and clerical IS personnel.
Systems analysts – design information systems based on the information requirements

of end users.
Software developers – create computer programs based on the specifications of
systems analysts.
System operators – monitor and operate large computer systems and networks.
Hardware Resources:
Hardware resources include all physical devices and materials used in information
processing.

• Machines - physical devices (computers, peripherals, telecommunications

networks, etc.)
• Media - all tangible objects on which data are recorded (paper, magnetic disks
etc.)
Examples of hardware in computer-based information systems are:

• Computer Systems – which consist of central processing units containing
microprocessors, and a variety of interconnected peripheral devices.
• Computer peripherals – are devices such as a keyboard or electronic mouse for

input of data and commands, a video screen or printer for output of information,
and magnetic or optical disks for storage of data resources.
Software Resources:
Software resources include all sets of information processing instructions.

• Program - a set of instructions that causes a computer to perform a particular
task.
• Procedures - set of instructions used by people to complete a task.
Examples of software resources are:

• System software – such as an operating system program, which controls and
supports the operations of a computer system.
• Application software – programs that direct processing for a particular use of a

computer by the end user.
• Procedures – are operating instructions for the people who will use an
information system.
Data Resources:
Data constitutes a valuable organizational resource. Thus, data resources must be

managed effectively to benefit all end users in an organization. The data resources of
information systems are typically organized into:
• Databases - a collection of logically related records or files. A database
consolidates many records previously
stored in separate files so that a common pool of data records serves many
applications.
• Knowledge Bases - hold knowledge in a variety of forms such as facts and rules
of inference about various subjects.

Data versus Information. The word data is the plural of datum, though data is
commonly used to represent both singular and plural forms. The term’s data and
information are often used interchangeably. However, you should make the following
distinction:
• Data: - are raw facts or observations, typically about physical phenomena or business
transactions. More specifically, data are objective measurements of the attributes
(characteristics) of entities, such as people, places, things, and events.
• Information: - is processed data, which has been placed in a meaningful and useful
context for end users. Data is subjected to a “value-added” process (data processing
or information processing) where:
• Its form is aggregated, manipulated, and organized.
• Its content is analyzed and evaluated
• It is placed in a proper context for a human user
Network Resources:
Telecommunications networks like the Internet, intranets, and extranets have become
essential to the successful electronic business and commerce operations of all types of
organizations and their computer-based information systems. Telecommunications
networks consist of computers, communications processors, and other devices
interconnected by communications media and controlled by communications software.
The concept of network resources emphasizes that communications networks are a
fundamental resource component of all information systems. Network resources include:
• Communications media (twisted-pair wire, coaxial cable, fiber-optic cable, and

microwave, cellular, and satellite wireless systems.
• Network support (people, hardware, software, and data resources that directly
support the operation and use of a communications network).
20. Information System Activities:
Information processing (or data processing) activities that occur in information system
include the following:
• Input of data resources
• Processing of data into information
• Output of information products
• Storage of data resources
• Control of system performance

Input of Data Resources:

• Data about business transactions and other events must be captured and prepared
for processing by the input activity. Input typically takes the form of data entry
activities such as recording and editing.
• Once entered, data may be transferred onto a machine-readable medium such as
magnetic disk or tape, until needed for processing.
Processing of Data into Information:

• Data is typically subjected to processing activities such as calculating,
comparing, sorting, classifying, and summarizing. These activities organize,
analyze, and manipulate data, thus converting them into information for end
users.
• Quality of data stored in an information system must be maintained by a continual
process of correcting and updating activities.
Output of Information Products:

• Information in various forms is transmitted to end-users and made available to
them in the output activity. The goal of information systems is the production
of appropriate information products for end users.
Storage of Data Resources:
Storage is a basic system component of information systems.

• Storage is the information system activity in which data and information are
retained in an organized manner for later use.
Control of System Performance:
An important information system activity is the control of its performance.

• An information system should produce feedback about its input, processing,
output, and storage activities.
• Feedback must be monitored and evaluated to determine if the system is meeting
established performance standards.
• Feedback is used to make adjustments to system activities to correct deficiencies.
21. Recognizing Information Systems:
As a business professional, you should be able to recognize the fundamental components

of information systems you encounter in the real world. This means that you should be
able to identify:
• The people, hardware, software, data, and network resources they use.
• The types of information products they produce.

• The way they perform input, processing, output, storage, and control activities.
Cases:
All the cases to be referred from the books mentioned below.
Questions:
1. Refer to the discussion questions with and without answers in both the books.
2. Also go through the key terms (definitions/meaning) of the concepts mentioned in
the books with bold letters.
3. Tables and diagrams are also to be tracked for questions are also being framed
and asked from these.
Source:
1. Management Information System (10th and 11th Edition) by Laudon and
Laudon
Pearson Education
2. Management Information System(7th Edition) by James’O Brien and George
M Marakus
Tata Mc Graw Hill


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Information Systems in Global Business Today

Section I: Foundation Concepts: Information Systems in Business

Section I: Foundation Concepts: Information Systems in Business

An understanding of the effective and responsible use and management of information

1. What You Need to Know:

An IS Framework for Business Professionals:

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 1

Foundation Concepts Fundamental behavioral, technical, business, and

Information Technologies Major concepts, developments, and management issues in

Development Processes How business professionals and information specialists

Management Challenges The challenges of effectively and ethically managing e-

2. Information technology and systems have revolutionized firms and industries,

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 2

• Most of the firm's significant business relationships with customers, suppliers,

• Core business processes, or logically related business tasks, are accomplished

• Business responses to changes in their environment are enhanced through digital

3. Growing interdependence between ability to use information technology and

There is a growing interdependence between a firm’s information systems and its

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 3

require changes in hardware, software, databases, and telecommunications. Often, what

4. Business firms invest heavily in information systems to achieve six strategic

New products, services, and business models:

Customer and supplier intimacy:

Improved decision making

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 4

A necessity may be driven by industry-level changes, as in the implementation of ATMs

5. Perspectives on Information Systems

Information Systems Are More than Computers

Using information systems effectively requires an understanding of the organization,

Organizational dimension of information systems

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 5

Organizational dimension of information systems (cont.)

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 6

Management dimension of information systems

Technology dimension of information systems

Computer hardware and software

Business perspective on information systems:

6. Business information value chain

7. Investing in information technology does not guarantee good returns

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 8

Assets required deriving value from a primary investment

E.g.: invest in technology and the people to make it work properly

Complementary assets include:

Example: Appropriate business model, Efficient business processes

Managerial assets: These include

Strong senior management support for change,

Incentive systems that monitor and reward individual innovation,

An emphasis on teamwork and collaboration, training programs,

a management culture that values flexibility and knowledge.

The Internet and telecommunications infrastructure

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 9

9. Contemporary Approaches to Information Systems

Information systems are sociotechnical systems. Although they are composed of

Management Information Systems

Four main actors

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 10

Suppliers of hardware and software

Information systems are sociotechnical systems. Although they are

10. The Fundamental Roles of IS in Business

● Support of its business processes and operations.

● Support of decision making by its employees and managers.

● Support of its strategies for competitive advantage.

Compiled by Faculty Incharge: Jaishree Tailor at GRIMS- 11