Information Management Summary
Chapter 1: Managing in the Digital World
Open innovation is a new approach. Instead of relying on tightly controlled
internal research projects, companies are opening up their research and
development efforts to a broad audience (Figure 1). Customers, suppliers, and
other companies are invited to participate more directly in different phases of
the innovation process, and companies are working more collaboratively with
universities.
Many companies take these ideas even further and open up the research and
development efforts to anyone who wishes to participate online or in person.
Further, new tools like interactive 3D visualization and rapid prototyping
technologies like 3D printing allow for tremendously lowered barriers to entry Figure 1 Open innovation entails
opening up the innovation process
to innovation. to outside entities, including
academia, individual innovators,
As with many innovations themselves, this innovative way of innovating would
research labs, other companies, or
not be possible without information systems. suppliers.
Information Systems Today
Today, information systems (IS) are ubiquitous: information systems are all around us, whether you see them or
not. Cities use information systems for adaptive traffic control systems or variable speed limits. Cars use
information systems for everything from ignition control to airbags to distance control and park assist systems.
Many innovative business models, ranging from Airbnb to Uber, are built on or around information systems.
Chances are that each year you see more information systems than you did the year before, and these systems
are a more fundamental and important part of your social, academic, and work life than ever before.
The Emergence of the Digital World
Increasing global competitiveness has forced companies to find ways to be better and to do things less
expensively. The answer for many firms continues to be to use information systems to do things better, faster,
and cheaper. Many organizations use information systems to support innovative business models, or build their
entire business models around technological innovations. Likewise, using global telecommunications networks,
companies can more easily integrate their operations to access new markets for their products and services as
well as access a large pool of talented labor in countries with lower wages.
Advances in cloud computing (think Gmail, Office Online, or Dropbox) allow for accessing e-mails, files, notes, and
the like, from different devices, further enhancing portability and mobility. In effect, we are in a virtuous cycle
where changes in technology lead to social changes and social changes shape technological changes.
Knowledge Workers and the Knowledge Society
Knowledge workers are typically professionals who are relatively well
educated and who create, modify, and/or synthesize knowledge as a
fundamental part of their jobs. They often possess valuable real-world
skills; they are continually learning how to do their jobs better; they
have much better career opportunities and far more bargaining power
than workers ever had before. Given the importance of education and
learning to knowledge workers and the firms that need them,
education would become the cornerstone of the knowledge society.
Possessing knowledge would be as important as possessing land,
labor, or capital (if not more so) (Figure 2).
Figure 2 Knowledge has become as important
as—and many feel more important than—
land, labor, and capital resources.
,Additionally, getting a college degree will qualify you for many jobs that would not be available to you otherwise
and will distinguish you from other job candidates. Finally, a college degree is often a requirement to qualify for
career advancement and promotion opportunities once you do get that job.
There are many alternatives to the term knowledge society. Others have referred to this phenomenon as the
knowledge economy, the new economy, the digital society, the network era, the Internet era, and other names.
We simply refer to this as the digital world.
An e-business is an organization that uses information technologies or systems to support nearly every part of its
business. Thus, the lines between “knowledge workers” and “manual workers” are blurring, to the point that
some argue that “every worker is a knowledge worker”
The Digital Divide
In the new economy there is a digital divide, where those with access to information systems have great
advantages over those without access to information systems. The digital divide is one of the major ethical
challenges facing society today when you consider the strong linkage between computer literacy and a person’s
ability to compete in the digital world.
Globalization and Societal Issues in the Digital World
Globalization—the integration of economies throughout the world, enabled by innovation and technological
progress (International Monetary Fund, 2002). You can see the effects of globalization in many ways, such as the
greater international movement of commodities, money, information, and labor as well as the development of
technologies, standards, and processes to facilitate this movement.
Globalization, opportunities and challenges
For organizations, globalization has opened up many opportunities, brought about by falling transportation and
telecommunication costs. To a large extent fueled by movies, television, and other forms of media, the increasing
globalization has moved cultures closer together. The rapid rise of a new middle class in many developing
countries has enabled established companies to reach new markets, enabling them to sell their products to
literally millions of new customers. At the same time, with the decrease in communication costs, companies can
now draw on a large pool of skilled professionals from all over the globe. Companies are choosing to outsource
business activities for a variety of reasons; the most important reasons include the following:
To reduce or control costs.
To free up internal resources.
To gain access to world-class capabilities.
To increase the revenue potential of the organization.
To reduce time to market.
To increase process efficiencies.
To be able to focus on core activities.
To compensate for a lack of specific capabilities or skills.
Organizations face governmental challenges related to differences in political systems, regulatory environments,
laws, standards, or individual freedoms. Likewise, geo-economic challenges include differences in infrastructure,
demographics, welfare, or workers’ expertise. Lastly, organizations face cultural challenges, such as dealing with
differences in languages, beliefs, attitudes, religions, or life focus but also different viewpoints regarding
intellectual property
Societal Issues in the Digital World
One such issue is demographic changes— changes in the structure of populations such as related to age, birth
rates, and migration. These differences in demographic changes will also shift the balance of demand and supply
of labor; further, differences in welfare are likely to further increase, and many countries are already experiencing
both positive and negative effects of mass migrations.
Rapid urbanization—the movement of rural populations to urban areas, to a point where 50 percent of the
world’s population is now living in cities. Sustaining this growth while providing livable environments for the
inhabitants will pose major challenges.
,Global shifts in economic power—changes in countries’ purchasing power and control over natural resources
(resource scarcity, climate change)—where established economies are losing their dominating positions in the
world’s economy, resulting in the need to resolve political struggles.
Five IT Megatrends That Shape the Digital Future
we’re seeing five (intertwined) “megatrends” that influence
individuals, organizations, and society (Figure 3).
Understanding the influence of these megatrends will be
increasingly important: Individuals will increasingly feel the
impact of these megatrends on their private and work lives,
and businesses need to have a business strategy that is fit
for today’s digital world and the digital future.
Mobile In most developed countries, the vast Figure 3 Five mega IT trends
majority of adults have a mobile phone, and
typically, people have their mobile phones within their reach 24/7. For organizations, this increase in
mobility has a wide range of implications, from increased collaboration to the ability to manage a
business in real time to changes in the way new (or existing) customers can be reached.
Social Media Largely based on the network effect—referring to the notion that the value of a network
(or tool or application based on a network) increases with the number of other users. In other words, if a
network has few users, it has little or no value.
Internet of Things (IoT) A network of a broad range of physical objects that can automatically share
data over the Internet. Such objects (or “things”) can range from an automobile tire equipped with a
pressure sensor to a smart meter enabling remote monitoring of energy consumption to a cow with an
injectable ID chip. Industrial Internet of Things (IIoT)—enables the convergence of information
technology and operations technology, offering the potential for tremendous improvements in efficiency,
product quality, agility, and flexibility, allowing companies to mass-produce customized products, better
monitor supply chains, and so on.
Cloud Compounding Now, much of the functionality previously offered by applications installed on
each individual computer is offered by applications “in the cloud,” accessed via a web browser.
Increasingly, not only the applications but also the data reside in the cloud, to be accessed at any time
from anywhere. Cloud computing can enable advanced analytics of massive amounts of Big Data
generated by mobile devices, sensors, or users of social networks.
Big Data Together, these transformations of our social and work interactions enabled by 24/7
connectivity have given rise to a fifth trend, Big Data. Big Data are typically described as extremely large
and complex datasets, which are characterized as being of high volume, variety (i.e., many different types
of data), and velocity (i.e., the data are being collected and analyzed at ever-increasing rates).
Digital information (Data, Bits, Bytes)
Only +/-magnetic poles (disks, external memory); or signal/no signal code (pulses) (data-communication).
Binary coding (binary digit=BIT): 3=11; 5=101; 8=1000.
American Standard Code for Information Interchange (ASCII) has combinations of 1 and 0 codes for 128
English characters; example lower case “j” is 1101010.
Byte: 7 bits for characters and one bit for checks.
- 4 bytes (32 bits machine), 8 bytes (64 bits) processers can process 4 or 8 bytes in one clock run/pulse
(herz)
Without this, smart industry, big data, block chain, Internet, globalized business etc. would not exist.
- Question: Can society do without systems and the Internet? What would happen if….?
Information Systems Defined
An information system (IS) is the combination of people and information technology that create, collect, process,
store, and distribute useful data. Information technology (IT) includes hardware, software, and
telecommunications networks.
, Hardware refers to physical computer equipment, such as a computer, tablet, or printer, as well as
components like a computer monitor or keyboard.
Software refers to a program or set of programs that tell the
computer to perform certain tasks.
Telecommunications networks refer to a group of two or more
computer systems linked together with communications
equipment.
While traditionally the term information technology referred to the
hardware, software, and networking components of an information
system, the difference is shrinking, with many using the terms IS and IT
synonymously. It is important to note that while many of today’s
technologies operate autonomously, they don’t build themselves and do
not exist for their own sake; rather, they are created to serve a useful
purpose for people. Also, any information system involves data that are
useful, for someone, somewhere. In Figure 4, the relationships among
Figure 4 An information system is the
the IS components is shown.
combination of people and information
It is important to note that people use various terms to describe the field technology that create, collect, process,
store, and distribute useful data.
of information systems, such as management information systems,
business information systems, computer information systems, and simply
systems.
Data: The Root and Purpose of Information Systems
Earlier, we defined information systems as the combination of people and information technology that create,
collect, process, store, and distribute useful data. We begin by talking about data, the most basic element of any
information system.
Data Unformatted data, or simply data, are raw symbols,
such as characters and numbers. Data have no meaning in
and of themselves and are of little value until processed.
- Data quality: consisting of completeness, accuracy,
timeliness, validity, and consistency.
Information Data can be formatted, organized, or
processed to be useful; they are transformed into
information, which can be defined as a representation of
reality, and can help to answer questions about who,
Figure 5 Data, information, and knowledge.
what, where, and when. Without information systems, it
would be difficult to transform raw data into useful information.
Knowledge The ability to understand information, form opinions, and make decisions or predictions
based on the information.
Hardware, Software, and Telecommunications Networks: The Components of
Information Systems
Computer hardware today includes not only “traditional” computer components but a variety of other input and
output devices, including sensors, cameras, actuators, and the like. Software enables organizations to utilize the
hardware to execute their business processes and competitive strategy by providing the computer hardware with
instructions on what processing functions to perform. Finally, the telecommunications networks allow computers
to share data and services, enabling the global collaboration, communication, and commerce we see today.
People: The Builders, Managers, and Users of Information Systems
With the growing value of data for competitive advantage, every company can now be considered a technology
company, needing people with the right skill set to help optimize its business processes. The career opportunities
for a person with IS training continue to be strong. In addition to an ample supply of jobs, earnings for IS
professionals will remain strong.
