The Information Systems

Revolution
Transforming Business and
Management
 Class Activity
• Break into groups of four and
– Introduce yourself to the members of your
group and describe yourself to the members of
your group
– Information technology can help companies
to…
– Identify five knowledge- and information-
intense products
 VW Mexico and the Internet
• SAP’s ERP system integrated with the web
to reduce part ordering time from 10 to 5
days
– Enabled dealer to use a browser and get order
information through an intranet on the
worldwide web
 VW Mexico and the Internet
• SAP’s ERP system integrated with the web
to reduce part ordering time from 10 to 5
days
– Enabled dealer to use a browser and get order
information through an intranet on the
worldwide web
 Information Systems…
Can help companies to:
– Extend their reach to faraway locations
– Offer new products and services
– Reshape jobs and work flows, and perhaps
profoundly change the way they conduct
business
 Three Powerful Worldwide
Changes
1. Globalization
2. Transformation of industrial economies to
knowledge and information-based
economies
3. Transformation of the enterprise
 Globalization
• Management & Control In A Global
Marketplace
• Competition In World Markets
• Global Work Groups
• Global Delivery Systems
*

1.5
 Globalization
• Information systems are a powerful ally
enabling businesses to
– Communicate with distributors, suppliers, and
customers worldwide
– Operate 24/7
– Serve local and international reporting needs
– Compete globally by bringing your products
and services to a global market
 Transformation of Industrial
Economies…
• To knowledge- and information-based
service economies.
– Increase need for white-collar workers
– Manufacturing has moved to low-wage
countries
– Knew knowledge- and information-intense
products
 Transformation of Industrial
Economies…
• To knowledge- and information-based
service economies.
– Increase need for white-collar workers
– Manufacturing has moved to low-wage
countries.
– Knew knowledge- and information-intense
products
 Transformation of Industrial
Economies…
• To knowledge- and information-based
service economies.
– Increase need for white-collar workers
– Manufacturing has moved to low-wage
countries. For how long?
– Knew knowledge- and information-intense
products
 LABOR FORCE COMPOSITION 1900-1996

70%
60%
% SERVICE
50% % WHITE COLLAR
40% % BLUE COLLAR
30% % FARMING
20%
10%
0%
00

10

20

30

40

50

60

70

80

96
19

19

19

19

19

19

19

19

19

19
YEAR

1.9
 Economic Transformation
• Knowledge-based Economies
• Productivity
• New Products & Services
• Knowledge As An Asset
• Time-based Competition
• Shorter Product Life
• Turbulent Environment
• Limited Employee Knowledge Base
*
1.6
 Knowledge- and Information-
Intense Products
• Credit cards
• Overnight package delivery
• Worldwide reservation systems
 Transformation Of The Enterprise
• Flattening
• Decentralization
• Flexibility
• Location Independence
• Low Transaction Costs
• Empowerment
• Collaborative Work
*
1.7
 What is an Information System
• A set of interrelated components that
– Collects data - INPUT
– Transforms data - PROCESS
– Disseminates information - OUTPUT
 SYSTEM

INPUT PROCESS OUTPUT

FEEDBACK

1.10
FUNCTIONS OF AN INFORMATION SYSTEM

ENVIRONMENT
Customers Suppliers

ORGANIZATION
INFORMATION SYSTEM

INPUT PROCESS OUTPUT

FEEDBACK

Regulatory Stockholders Competitors

Agencies
1.11
 What is an information system?
• An organizational and management
solution, based on information technology,
to a challenge posed by the environment.
INFORMATION SYSTEMS

ORGANIZATIONS TECHNOLOGY

INFORMATION
SYSTEMS

MANAGEMENT
 The Key Elements of an
Organization
• People
• Structure and operating procedures
• Politics
• Culture
 People
1. Knowledge workers
– Product or service designers and knowledge
creators
2. Data workers
– The paper-pushers
3. Production or service workers
– Producers/service providers
 Structure
• Sales and Marketing
• Manufacturing
• Finance
• Accounting
• Human Resources
SOCIOTECHNICAL PERSPECTIVE

Information systems are sociotechnical

systems. Though they are composed of
machines devices, and “hard” physical
technology, they require substantial social,
organizational, and intellectual investment
to make them work properly

*
 APPROACHES TO INFO SYSTEMS

TECHNICAL APPROACHES
COMPUTER
OPERATIONS
SCIENCE
RESEARCH
MANAGEMENT
SCIENCE
MIS
SOCIOLOGY

PSYCHOLOGY POLITICAL
SCIENCE

BEHAVIORAL APPROACHES
 Behavioral Approach
• Focuses on strategic business integration,
design, implementation, and utilization
• Focuses on changes in
– Attitude
– Management and organizational policy
– Behavior
 SYSTEM INTERDEPENDENCE

INTERDEPENDENCE
HARDWARE

BUSINESS SOFTWARE DATABASE

Strategy
Rules TELE-
Procedures COMMUNICATIONS

ORGANIZATION INFORMATION SYSTEM

1.17
 Information System Impacts
• What a business would like to do in five
years is often dependent on what its systems
will be able to do
– Becoming the high-quality or low-cost
producer
– Developing new products
– Increasing employee productivity
 SCOPE OF INFO SYSTEMS
• 1950s: TECHNICAL CHANGES
• 60s-70s: MANAGERIAL CONTROL
• 80s-90s: INSTITUTIONAL CORE ACTIVITIES

GROWING IMPORTANCE
*
1.18
 Computing Power
• Doubling every 18 months
• The performance of the microprocessors
have improved 25,000 times since their
invention 25 years ago
• Soaring power has spawned powerful
communications networks the largest of
which is…
 What You Can Do On The Internet
• Communicate & Collaborate
– e-mail
• Access Information
– Databases
• Discussions
– Chats
• Obtain Information
– FTP
• Entertainment
– Play…, view…, read…, animate…
• Business Transactions
– Advertise, sell, and purchase
1.19
*
 The Number of Internet Users
• Greater than 250 million today!
 New Options For Organizational
Design
• Flattening Organizations
• Separating Work From Location
• Increasing Flexibility
• Refining Organizational Boundaries
• Reorganizing Work Flows
*

1.20
 The Changing Management
Process
• Enterprise Resource Planning
• Electronic Commerce
• Electronic Business
*

1.21
 Enterprise Resource Planning
Software Integrates All Facets:
• Planning, Manufacturing, Inventory, Sales,
Finance, Accounting
• Transactions Alert All Involved Factors
• Updates Files, Speeds Action, Cuts Cost
*

1.22
 Electronic Commerce
• Internet Links Buyers, Sellers
• Lowers Transaction Costs
• Goods & Services Advertised, Bought,
Exchanged Worldwide
• B2B Transactions Increasing
*

1.23
 Electronic Business
• Intranet: Business Builds Private, Secure
Network
• E-mail, Web Documents, Group Software
Extends Effective Communication &
Control
• Virtual Organization
*

1.24
 VIRTUAL ORGANIZATION
MANUFACTURING DESIGN
COMPANY COMPANY

SALES & MARKETING CORE LOGISTICS

COMPANY COMPANY COMPANY

FINANCE COMPANY
1.25
 CHALLENGE OF INFO SYSTEMS

• STRATEGIC: Maintaining a competitive

edge
• GLOBALIZATION:Integrated systems
• INFO ARCHITECTURE: Development
• INVESTMENT: What is the value?
• RESPONSIBILITY & CONTROL: Ethics
*
1.26