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Summary Management Information Systems
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Management information systems, managing the digital firm. Fourteenth edition, Kenneth C. Laudon, Jane P. Laudon
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SUMMARY MANAGEMENT INFORMATION SYSTEMSLIZA JANSEN
CONTENT
CHAPTER 1 7
1.1 HOW ARE INFORMATION SYSTEMS TRANSFORMING BUSINESS, AND WHY ARE THEY SO
ESSENTIAL FOR RUNNING AND MANAGING A BUSINESS TODAY? 7
HOW INFORMATION SYSTEM ARE TRANSFORMING BUSINESS 7
WHAT’S NEW IN MANAGEMENT INFORMATION SYSTEMS? 7
GLOBALIZATION CHALLENGES AND OPPORTUNITIES: A FLATTENED WORLD 7
THE EMERGING DIGITAL FIRM 7
STRATEGIC BUSINESS OBJECTIVES OF INFORMATION SYSTEMS 7
1.2 WHAT IS AN INFORMATION SYSTEM? HOW DOES IT WORK? 8
WHAT IS AN INFORMATION SYSTEM? 8
DIMENSIONS OF INFORMATION SYSTEMS 9
IT ISN’T JUST TECHNOLOGY: A BUSINESS PERPECTIVE ON INFORMATION SYSTEMS 10
COMPLEMENTARY ASSETS: ORGANIZATIONAL CAPITAL AND THE RIGHT BUSINESS MODEL 10
1.3 WHAT ACADEMIC DISCIPLINES ARE USED TO STUDY INFORMATION SYSTEMS AND HOW
DOES EACH CONTRIBUTE TO AN UNDEERSTANDING OF INFORMATION SYSTEMS 10
TECHNICAL APPROACH 10
BEHAVIORAL APPROACH 10
APPROACH OF THIS TEXT: SOCIOTECHNICAL SYSTEMS 11
CHAPTER 2 12
2.1 WHAT ARE BUSINESS PROCESSES? HOW ARE THEY RELATED TO INFORMATION SYSTEMS? 12
BUSINESS PROCESSES 12
HOW INFORMATION TECHNOLOG IMPROVES BUSINESS PROCESSES. 12
2.2 HOW DO SYSTEMS SERVE THE DIFFERENT MANAGEMENT GROUPS IN A BUSINESS AND HOW
DO SYSTEMS THAT LINK THE ENTERPRISE IMPROVE ORGANIZATIONAL PERFORMANCE? 12
SYSTEMS FOR DIFFERENT MANAGEMENT GROUPS 12
SYSTEMS FOR LINKING THE ENTERPRISE 13
E-BUSINESS, E-COMMERCE, AND E-GOVERNMENT 13
2.3 WHY ARE SYSTEMS FOR COLLABORATION AND SOCIAL BUSINESS SO IMPORTANT AND WHAT
TECHNOLOGIES DO THEY USE 14
WHAT IS COLLABORATION 14
WHAT IS SOCIAL BUSINESS 14
BUSINESS BENEFITS OF COLLABORATION AND SOCIAL BUSINESS 14
BUILDING A COLLABORATIVE CULTURE AND BUSINESS PROCESS 14
TOOLS AND TECHNOLOGIES FOR COLLABORATION AND SOCIAL BUSINESS 14
2.4 WHAT IS THE ROLE OF THE INFORMATION SYSTEMS FUNCTION IN A BUSINESS 15
THE INFORMATION SYSTEMS DEPARTMENT 15
ORGANIZING THE INFORMATION SYSTEMS FUNCTION 16
CHAPTER 3 17
3.1 WHICH FEATURES OF ORGANIZATIONS DO MANAGERS NEED TO KNOW ABOUT TO BUILD AND
USE INFORMATION SYSTEMS SUCCESSFULLY? 17
WHAT IS AN ORGANIZATION? 17
FEATURES OF ORGANIZATIONS 17
3.2 WHAT IS THE IMPACT OF INFORMATION SYSTEMS ON ORGANIZATIONS? 18
1
, ECONOMIC IMPACTS 18
ORGANIZATIONAL AND BEHAVIORAL IMPACTS 19
THE INTERNET AND ORGANIZATIONS 19
IMPLICATIONS FOR THE DESIGN AND UNDERSTANDING OF INFORMATION SYSTEMS 19
3.3 HOW DO PORTER’S COMPETITIVE FORCES MODEL, THE VALUE CHAIN MODEL, SYNRGIES, CORE
COMPETENCIES, AND NETWORK ECONOMICS HELP COMPANIES DEVELOP COMPETITIVE
STRATEGIES USING INFORMATION SYSTEMS? 20
PORTER’S COMPETITIVE FORCES MODEL 20
INFORMATION SYSTEM STRATEGIES FOR DEALING WITH COMPETITIVE FORCES 20
THE INTERNET’S IMPACT ON COMPETITIVE ADVANTAGE 21
BUSINESS VALUE CHAIN MODEL 21
SYNERGIES, CORE COMPETENCIES, AND NETWORKBASED STRATEGIES 21
3.4 WHAT ARE THE CHALLENGES POSED BY STRATEGIC INFORMATION SYSTEMS AND HOW
SHOULD THEY BE ADRESSED 22
SUSTAINING COMPETITIVE ADVANTAGE 22
ALIGINING IT WITH BUSINESS OBJECTIVES 22
MANAGING STRATEGIC TRANSITIONS 22
CHAPTER 5 23
5.1 WHAT IS IT INFRASTRUCTURE AND WHAT ARE THE STAGES AND DRIVERS OF IT
INFRASTRUCTURE EVOLUTION 23
DEFINING IT INFRASTRUCTURE 23
EVOLUTION OF IT INFRASTRUCTURE 23
TECHNOLOGY DRIVERS OF INFRASTRUCTURE EVOLUTION 24
5.2 WHAT ARE THE COMPONENTS OF IT INFRASTRUCTURE 25
COMPUTER HARDWARE PLATFORMS 25
OPERATING SYSTEM PLATFORMS 25
ENTERPRISE SOFTWARE APPLICATIONS 25
DATA MANAGEMENT AND STORAGE 25
NETWORKING/TELECOMMUNICATIONS PLATFORMS 26
INTERNET PLATFORMS 26
CONSULTING AND SYSTEM INTEGRATION SERVICES 26
5.3 WHAT ARE THE CURRENT TRENDS IN COMPUTER HARDWARE PLATFORMS? 26
THE MOBILE DIGITAL PLATFORM 26
CONSUMERIZATION OF IT AND BYOD 26
QUANTUM COMPUTING 26
VIRTUALIZATION 27
CLOUD COMPUTING 27
GREEN COMPUTING 27
HIGH-PERFORMANCE AND POWER-SAVING PROCESSORS 28
5.4 WHAT ARE THE CURRENT TRENDS IN COMPUTING SOFTWARE PLATFORMS? 28
LINUX AND OPEN SOURCE SOFTWARE 28
SOFTWARE FOR THE WEB: JAVA, HTML, AND HTML5 28
WEB SERVICES AND SERVICE-ORIENTED ARCHITECTURE 28
SOFTWARE OUTSOURCING AND CLOUD SERVICES 29
5.5 WHAT ARE THE CHALLENGS OF MANAGING IT INFRASTRUCTURE AND MANAGEMENT
SOLUTIONS? 29
DEALING WITH PLATFORM AND INFRASTRUCTURE CHANGE 29
MANAGEMENT AND GOVERNANCE 29
MAKING WISE INFRASTRUCTURE INVESTMENTS 29
CHAPTER 6 31
2
, 6.3 WHAT ARE THE PRINCIPAL TOOLS AND TECHNOLGOIES FOR ACCESSING INFORMATION FROM
DATABASES TO IMPROVE BUSINESS PERFORMACE AND DECISION MAKING? 31
THE CHALLENGE OF BIG DATA 31
BUSINESS INTELIGENCE INFRASTRUCTURE 31
ANALYTICAL TOOLS: RELATIONSHIPS PATTERNS, TRENDS 32
DATABASES AND THE WEB 33
CHAPTER 7 34
7.1 WHAT ARE THE PRINCIPAL COMPONENTS OF TELECOMMUNICATIONS NETWORKS AND KEY
NETWORKING TECHNOLOGIES 34
NETWORKING AND COMMUNICATION TRENDS 34
WHAT IS A COMPUTER NETWORK? 34
KEY DIGITAL NETWORKING TECHNOLOGIES 34
7.2 WHAT ARE DIFFERENT TYPES OF NETWORKS 35
SIGNALS: DIGITAL VS. ANALOG 35
TYPE OF NETWORKS 36
TRANSMISSION MEDIA AND TRANSMISSION SPEED 36
7.3 HOW DO THE INTERNET AND INTERNET TECHNOLGY WORK AND HOW DO THEY SUPPORT
COMMUNICATION AND E-BUINESS.? 36
WHAT IS THE INTERNET? 36
INTERNET ADDRESSING AND ARCHITECTURE 37
INTERNET SERVICES AND COMMUNICATION TOOLS 37
THE WEB 38
7.4 WHAT ARE THE PRINCIPAL TECHNOLOGIES AND STANDARDS FOR WIRELESS NETWORKING,
COMMUNICATION, AND INTERNET ACCES? 40
CELLULAR SYSTEMS 40
WIRELESS COMPUTER NETWORKS AND INTERNET ACCESS 41
RFID AND WIRELESS SENSOR NETWORKINGS 41
CHAPTER 9 42
9.1 HOW DO ENTERPRISE SYSTEMS HELP BUSINESS ACHIEVE OPERATIONAL EXCELLENCE 42
WHAT ARE ENTRERPRISE SYSTEMS 42
ENTERPRISE SOFTWARE 42
BUSINESS VALUE OF ENTERPRISE SYSTEMS 42
9.2 HOW DO SUPPLY CHAIN MANAGEMENT SYSTEMS COORDINATE PLANNING, PRODUCTION,
AND LOGISTICS WITH SUPPLIERS. 42
THE SUPPLY CHAIN 42
INFORMATION SYSTEMS AND SUPPLY CHAIN MANAGEMENT 43
SUPPLY CHAIN MANAGEMENT SOFTWARE 43
GLOBAL SUPPLY CHAINS AND THE INTERNET 43
BUSINESS VALUE OF SUPPLY CHAIN MANAGEMENT 43
9.3 HOW DO CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS HELP FIRMS ACHIEVE
CUSTOMER INTIMACY? 44
WHAT IS CUSTOMER RELATIONSHIP MANAGEMENT? 44
CUSTOMER RELATIONSHIP MANAGEMENT SOFTWARE 44
OPERATIONAL AND ANALYTICAL CRM 45
BUSINESS VALUE OF CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS 45
9.4 WHAT ARE THE CHALLENGES POSED BY ENTERPRISE APPLICATIONS AND HOW ARE ENTERPRISE
APPLICATIONS TAKING ADVANTAGE OF NEW TECHNOLOGIES? 45
ENTERPRISE APPLICATION CHALLENGES 45
NEXT-GENERATION ENTERPRISE APPLICATIONS 45
CHAPTER 10 46
3
, 10.1 WHAT ARE THE UNIQUE FEATURES OF E-COMMERCE, DIGITAL MARKETS, AND DIGITAL
GOODS? 46
E-COMMERCE TODAY 46
THE NEW E-COMMORECE: SOCIAL, MOBILE, LOCAL 46
WHY E-COMMERCE IS DIFFERENT 46
KEY CONCEPTS IN E-COMMERCE: DIGITAL MARKETS AND DIGITAL GOODS IN A GLOBAL
MARKETPLACE 47
10.2 WHAT ARE THE PRINCIPAL E-COMMERCE BUSINESS AND REVENUE MODELS. 48
TYPES OF E-COMMERCE 48
E-COMMERCE BUSINESS MODELS 48
E-COMMERCE REVENUE MODELS 49
10.3 HOW HAS E-COMMERCE TRANSFORMED MARKETING 50
BEHAVIORAL TARGETING 50
SOCIAL E-COMMERCE AND SOCIAL NETWORK MARKETING 50
10.4 HOW HAS E-COMMERCE AFFECTED BUSINESS-TO-BUSINESS TRANSACTIONS? 51
ELECTRONIC DATA INTERCHANGE (EDI) 51
NEW WAYS OF B2B BUYING AND SELLING 51
10.5 WHAT IS THE ROLE OF M-COMMERCE IN BUSINESS AND WHAT ARE THE MOST IMPORTANT
M-COMMERCE APPLICATIONS? 52
LOCATION-BASED SERVICES AND APPLICATIONS 52
10.6 WHAT ISSUES MUST BE ADDRESSED WHEN BUILDING AN E-COMMERCE PRESENCE? 52
DEVELOP AN E-COMMERCE PRESENCE MAP 52
DEVELOP A TIMELINE: MILESTONES 52
CHAPTER 11 53
11.1 WHAT IS THE ROLE OF KNOWLEDGE MANAGEMENT SYSTEMS IN BUSINESSES? 53
IMPORTANT DIMENSIONS OF KNOWLEDGE 53
THE KNOWLEDGE MANAGEMENT VALUE CHAIN 53
TYPES OF KNOWLEDGE MANAGEMENT SYSTEMS 54
11.2 WHAT TYPES OF SYSTEMS ARE USED FOR ENTERPRISE-WIDE KNOWLEDGE MANAGEMENT
AND HOW DO THEY PROVIDE VALUE FOR BUSINESSES? 54
ENTERPRISE CONTENT MANAGEMENT SYSTEMS 54
LOCATING AND SHARING EXPERTISE 55
LEARNING MANAGEMENT SYSTEM 55
11.3 WHAT ARE THE MAJOR TYPES OF KNOWLEDGE WORK SYSTEMS AND HOW DO THEY PROVIDE
VALUE FOR FIRMS? 55
KNOWLEDGE WORKERS AND KNOWLEDGE WORK 55
REQUIREMENTS OF KNOWLEDGE WORK SYSTEMS 55
EXAMPLES OF KNOWLEDGE WORK SYSTEMS 56
CHAPTER 12 57
12.1 WHAT ARE THE DIFFERNET TYPES OF DECISIONS AND HOW DOES THE DECISION-MAKING
PROCESS WORK? HOW DO INFORMATION SYSTEMS SUPPORT HE ACTIVITIES OF MANAGERS AND
MANAGEMENT DECISION MAKING? 57
BUSINESS VALUE OF IMPROVED DECISION MAKING 57
TYPES OF DECISIONS 57
THE DECISION-MAKING PROCESS 57
MANAGERS AND DECISION MAKING IN THE REAL WORLD 57
HIGH-VELOCITY AUTOMATED DECISION MAKING 58
12.2 HOW DO BUSINESS INTELLIGENCE AND BUSINESS ANALYTICS SUPPORT DECISION MAKING? 59
WHAT IS BUSINESS INTELLIGENCE 59
THE BUSINESS INTELLIGENCE ENVIRONMENT 59
BUSINESS INTELLIGENCE AND ANALYTICS CAPABILITIES 59
4
, MANAGEMENT STRATEGIES FOR DEVELOPING BI AND BA CAPABILITIES 60
12.3 HOW DO DIFFERENT DECISION-MAKING CONSITUENCIES IN AN ORGANIZATION USE BUSINESS
INTELLIGENCE? WHAT IS THE ROLE OF INFORMATION SYSTEMS IN HELPING PEOPLE WORKING IN A
GROUP MAKE DECISIONS MORE EFFICIENTLY? 61
DECISION SUPPORT FOR OPERATIONAL AND MIDDLE MANAGEMENT 61
DECISION SUPPORT FOR SENIOR MANAGEMENT: BALACED SCORECARD AND ENTERPRISE
PERFORMANCE MANAGEMENT METHODS 61
GROUP DECISION-SUPPORT SYSTEMS (GDSS) 62
CHAPTER 13 63
13.1 HOW DOES BUILDING NEW SYSTEMS PRODUCE ORGANIZATIONAL CHANGE? 63
SYSTEMS DEVELOPMENT AND ORGANIZATIONAL CHANGE 63
BUSINESS PROCESS REDESIGN 63
13.2 WHAT ARE THE CORE ACTIVITI4ES IN THE SYSTEMS DEVELOPMENT PROCESS? 64
SYSTEM ANALYSIS 64
SYSTEMS DESIGN 64
COMPLETING THE SYSTEMS DEVELOPMENT PROCESS 64
13.3 WHAT ARE THE PRINCIPAL METHODOLOGIES FOR MODELING AND DESIGNING SYSTEMS? 65
STRUCTURED METHODOLOGIES 65
OBJECT-ORIENTED DEVELOPMENT 66
COMPUTER-AIDED SOFTWARE ENGINEERING 66
13.4 WHAT ARE ALTERNATIVE METHODS FOR BUILDING INFORMATION SYSTEMS? 66
TRADITIONAL SYSTEMS LIFE CYCLE 67
PROTOTYPING 67
END-USER DEVELOPMENT 67
APPLICATION SOFTWARE PACKAGES AND OUTSOURCING 67
13.5 WHAT ARE NEW APPROACHES FOR SYSTEM BUILDING IN THE DIGITAL FIRM ERA 68
RAPID APPLICATION DEVELOPMENT (RAD) 68
COMPONENT-BASED DEVELOPMENT AND WEB SERVICES 68
MOBILE APPLICATION DEVELOPMENT: DESIGNING FOR A MULTI-SCREEN WORLD 69
CHAPTER 14 70
14.1 WHAT ARE THE OBJECTIVES OF PROJECT MANAGEMENT AND WHY IS IT SO ESSENTIAL IN
DEVELOPING INFORMATION SYSTEMS 70
RUNAWAY PROJECTS AND SYSTEM FAILURE 70
PROJECT MANAGEMENT OBJECTIVES 70
14.2 WHAT METHODS CAN BE USED FOR SELECTING AND EVALUATING INFORMATION SYSTEMS
PROJECTS AND ALIGNING THEM WITH THE FIRM’S BUSINESS GOALS? 70
MANAGEMENT STRUCTURE FOR INFORMATION SYSTEM PROJECTS 70
LINKING SYSTEMS PROJECTS TO THE BUSINESS PLAN 71
INFORMATION REQUIREMENTS AND KEY PERFORMANCE INDICATORS 71
PORTFOLIO ANALYSIS 71
SCORING MODELS 71
14.3 HOW CAN FIRMS ASSESS THE BUSINESS VALUE OF INFORMATION SYSTEMS 71
INFORMATION SYSTEM COSTS AND BENEFITS 71
REAL OPTIONS PRICING MODELS 72
LIMITATIONS OF FINANCIAL MODELS 72
14.4 WHAT ARE THE PRINCIPAL RISK FACTORS IN INFORMATION SYSTEMS PROJECTS, AND HOW
CAN THEY BE MANAGED. 72
DIMENSIONS OF PROJECT RISK 72
CHANGE MANAGEMENT AND THE CONCEPT OF IMPLEMENTATION 72
CONTROLLING RISK FACTORS 73
DESIGN FOR THE ORGANIZATION 74
5
, PROJECT MANAGEMENT SOFTWARE TOOLS 74
CHAPTER 15 75
15.1 WHAT MAJOR FACTORS ARE DRIVING THE INTERNATIONALIZATION OF BUSIBESS? 75
DEVELOPING AN INTERNATIONAL INFORMATION SYSTEMS ARCHITECTURE 75
THE GLOBAL ENVIRONMENT: BUSINESS DRIVERS AND CHALLENGES 75
STATE OF THE ART 76
15.2 WHAT ARE THE ALTERNATIVE STRATEGIES FOR DEVELOPING GLOBAL BUSINESS 76
GLOBAL STRATEGIES AND BUSINESS ORGANIZATION 76
GLOBAL SYSTEMS TO FIT THE STRATEGY 77
REORGANIZING THE BUSINESS 77
15.3 WHAT ARE THE CHALLENGES POSED BY GLOBAL INFORMATION SYSTEMS AND MANAGEMENT
SOLUTIONS FOR THESE CHALLENGES. 78
A TYPICAL SCENARIO: DISORGANIZATION ON A GLOBAL SCALE 78
GLOBAL SYSTEMS STRATEGY 78
THE MANAGEMENT SOLUTION: IMPLEMENTATION 78
15.4 WHAT ARE THE ISSUES AND TECHNICAL ALTERNATIVES TO BE CONSIDERED WHEN
DEVELOPING INTERNATIONAL INFORMATION SYSTEMS 79
COMPUTING PLATFORMS AND SYSTEMS INTEGRATION 79
CONNECTIVITY 79
SOFTWARE LOCALIZATION 80
6
,CHAPTER 1
1.1 HOW ARE INFORMATION SYSTEMS TRANSFORMING BUSINESS, AND WHY ARE
THEY SO ESSENTIAL FOR RUNNING AND MANAGING A BUSINESS TODAY?
HOW INFORMATION SYSTEM ARE TRANSFORMING BUSINESS
WHAT’S NEW IN MANAGEMENT INFORMATION SYSTEMS?
Three interrelated changes in the technology area:
1. The widespread adoption of the mobile computing platform
2. The growing business use of “big data”
3. The growth in “cloud computing”.
Developments in the mobile devices are called “mobile digital platform”
Managers routinely use online collaboration and social technologies in order to make better,
faster decisions.
Millions of managers rely heavily on the mobile digital platform to coordinate suppliers and
shipments, satisfy customers, and manage their employees.
GLOBALIZATION CHALLENGES AND OPPORTUNITIES: A FLATTENED WORLD
What does globalization have to do with management information systems? That’s simple:
everything.
THE EMERGING DIGITAL FIRM
Digital firm is one in which nearly all of the organization’s significant business relationships
with customers, suppliers, and employees are digitally enabled and mediated. Core business
processes are accomplished through digital networks spanning the entire organization or
linking multiple organizations.
Business processes refers to the set of logically related tasks and behaviors that
organizations develop over time to produce specific business results and the unique manner
in which these activities are organized and coordinated.
Key corporate assets – intellectual property, core competencies, and financial and human
assets – are managed through digital means.
Digital firms sense and respond to their environments far more rapidly than traditional firms.
Time shifting refers to business being conducted continuously, 24/7, rather than in a normal
working day.
Space shifting means that work takes place in a global workshop.
STRATEGIC BUSINESS OBJECTIVES OF INFORMATION SYSTEMS
Information systems are essential for conduction day-to-day business, as well as achieving
strategic business objectives.
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; and survival
7
, Operational excellence
Businesses continuously seek to improve the efficiency of the operations in order to achieve
higher probability.
New products, services, and business models
Business model describes how a company produces, delivers, and sells a product or service
to create wealth.
Customer and supplier intimacy
When a business really knows its customers, and serves them well, the customers generally
respond by returning and purchasing more. Likewise with suppliers: the more a business
engages its suppliers, the better the suppliers can provide vital inputs.
Improved decision making
Past, managers rely on forecasts, best guess, and luck.
Present, managers get real-time data from the marketplace when making decisions.
Competitive advantage
When firms achieve – operational excellence; new products, services and businesses models;
customer/supplier intimacy; and improved decision making – chances are that they have
already achieved a competitive advantages.
Survival
Business firms also invest in information systems and technologies because they are
necessities of doing business. Sometimes these ‘necessities’ are driven by industry-level
changes.
1.2 WHAT IS AN INFORMATION SYSTEM? HOW DOES IT WORK?
Information technology (IT) consist of all the hardware and software that a firm needs to
use in order to achieve its business objectives.
WHAT IS AN INFORMATION SYSTEM?
Information system can be defined technically as a set of interrelated components that
collect and retrieve, information to support decision making and control in an organization.
Information we mean data that have been shaped into a form that is meaningful and useful
to human beings.
Data, are streams of raw facts representing events occurring in organizations or the physical
environment before they have been organized and arranged into a form that people can
understand and use.
Input captures or collect raw data from within the organization or from its external
environment.
Processing converts this raw input into a meaningful form.
Output transfers the processed information to the people who will use it or to activities for
which it will be used.
8
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