STRATEGIC INFORMATION

SYSTEM
Usman Sattar

School of Business & Economics

University of Management & Technology
Chapter 1

INFORMATION SYSTEMS IN
GLOBAL BUSINESS TODAY
 Management Information System

The Role of Information Systems in Business Today

Imagine yourself in 2000

Observing how companies conduct business.
Imagine yourself in 2016
Observing how companies conduct business.
Cell phones, BlackBerrys, iPhones, e-mail, and
online conferencing over the Internet have all
become essential tools of business.
Business without Internet site.
Changes in Business Models example E-paper,
Internet Advertising.
 Management Information System

The Role of Information Systems in Business Today

Can you start a Business on Facebook?

Social Networking Capital of the
World?
99 Million Business have .com
PAKISTAN POST
 Management Information Systems

The Role of Information Systems in Business Today

Information Technology Capital Investment

5 Pearson Education 2012

 Management Information System

The Role of Information Systems in Business Today

How information systems are transforming

business
Increase in wireless technology use, Web sites
The growth of online software as a service (SaaS)
Cloud computing, mobile digital platform allow more
distributed work, decision-making, and collaboration
Web 2.0 Technology
Globalization opportunities
Internet has drastically reduced costs of operating
on global scale.
Presents both challenges and opportunities.
Example

6 Pearson Education 2012

 Management Information System

The Role of Information Systems in Business Today

A fully digital firm

Significant business relationships are digitally
enabled.
Core business processes are accomplished
through digital networks.
Developing a new product, generating and fulfilling an
order, creating a marketing plan, and hiring an employee.
Key corporate assets are managed digitally.
Digital firms offer greater flexibility in
organization and management
Time shifting, space shifting

7 Pearson Education 2012

 Management Information System

The Role of Information Systems in Business Today

Business firms invest heavily in

information systems to achieve six
strategic business objectives:
1. Operational Excellence (WalMart RetailLink
System)
2. New products, services, and business models
(Apple)
3. Customer and supplier intimacy (Online Retail
Industry)
4. Improved decision making (TCS, UPS)
5. Competitive advantage (Metro)
8 6. Survival (Banks) Pearson Education 2012
 Management Information System

Growing interdependence between

ability to use information technology
and ability to implement corporate
strategies and achieve corporate
goals.
 Management Information Systems

The Role of Information Systems in Business Today

The Interdependence Between Organizations and Information Technology

10 Pearson Education 2012

 Management Information System

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
11 Pearson Education 2012
Data and Information
Data is a collection of unprocessed items, which can
include text, numbers, images, audio, and video.
Information conveys meaning and is useful to people.
Its the Computers which process data into information.
 Management Information Systems

Perspectives on Information Systems

Data and Information

13 Pearson Education 2012

 Management Information System

Perspectives on Information Systems

Three activities of information

systems produce information
organizations need
1. Input: Captures raw data from
organization or external environment
2. Processing: Converts raw data into
meaningful form
3. Output: Transfers processed
information to people or activities that
14
use it Pearson Education 2012
 Management Information System

Perspectives on Information Systems

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

15 Pearson Education 2012

 Management Information Systems

Perspectives on Information Systems

16 Pearson Education 2012

 Management Information Systems

Dimension of Information Systems

17 Pearson Education 2012

 Management Information System

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

18 Pearson Education 2012

 Management Information Systems

Perspectives on Information Systems

19 Pearson Education 2012

 Management Information System

Perspectives on Information Systems

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

20 Pearson Education 2012

 Management Information System

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

21 Pearson Education 2012

 Management Information System

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

22
that system is built on Pearson Education 2012
 Management Information System

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
23 Pearson Education 2012
 Management Information System

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
SONY, APPLE
Investing in complementary assets
(organizational and management capital).

24 Pearson Education 2012

 Management Information System

Perspectives on Information Systems

Complementary assets:
Assets required to derive value from a
primary investment.
Automobile Industry
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

25 Pearson Education 2012

 Management Information System

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
26 Pearson Education 2012
 Management Information Systems

Contemporary Approaches to Information Systems

27 Pearson Education 2012

 Management Information System

Contemporary Approaches to Information Systems

Technical approach
Emphasizes mathematically based
models
Computer science, management
science, operations research
Behavioral approach
Behavioral issues (strategic business
integration, implementation, etc.)
Psychology, economics, sociology
28 Pearson Education 2012
 Management Information System

Contemporary Approaches to Information Systems

 Management Information System

Contemporary Approaches to Information Systems

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
Firms environment (legal, social,
30 cultural context) Pearson Education 2012
Management Information System
Management Information System
 Management Information Systems

Contemporary Approaches to Information Systems

A Sociotechnical Perspective on Information Systems

33 Pearson Education 2012