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Digital organisation summary
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TEST BANK FOR MANAGEMENT INFORMATION SYSTEMS MANAGING THE DIGITAL FIRM 17TH EDITION KENNETH C. LAUDON, JANE P. LAUDON
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Digital organisation summary
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Engelse samenvatting boek Management Information Systems (Business Studies OE313a)
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DIGITAL ORGANISATIONINTRODUCTION............................................................................................................................................. 2
1. Information systems in global business today............................................................................................. 3
1.1. How are information systems transforming business, and why are they so essential for running and
managing a business today?................................................................................................................................3
1.2. Information systems......................................................................................................................................6
2. Global e-business and collaboration........................................................................................................... 9
2.1 What are business processes? How are they related to IS’s?........................................................................9
2.2 How do systems serve the different management groups in a business, and how do systems that link the
enterprise improve organizational performance?.............................................................................................10
2.3 Why are systems for collaboration and social business so important, and what technologies do they use?
............................................................................................................................................................................13
2.4 What is the role of the information systems function in a business?..........................................................16
3. Information systems, organizations, and strategy.....................................................................................18
3.1 Which features of organizations do managers need to know about to build and use IS’s successfully?....18
3.2 What is the impact of information systems on organizations?...................................................................20
3.3 How do Porter’s competitive forces model, the value chain model, synergies, core competencies, and
network economics help develop competitive strategies using IS’s?................................................................21
3.4 What are the challenges posed by strategic IS’s, and how should they be addressed?..............................26
4. Securing information systems................................................................................................................... 28
4.1 Why are information systems vulnerable to destruction, error, and abuse?..............................................28
4.2 What is the business value of security and control?....................................................................................32
4.3 What are the components of an organizational framework for security and control?...............................33
4.4 What are the most important tools and technologies for safeguarding information resources?...............35
1
,INTRODUCTION
A digital organization = implements information systems and technologies to realize its
strategic objectives in order to achieve a competitive advantage and create stakeholder
value in a rapidly changing environment.
Strategic objectives to achieve a competitive advantage
Strategies for a competitive advantage:
1. Lowest cost
The company tries to be the most cost efficient so they can offer a lower price. (Ryanair)
2. Differentiated product
The company is popular because of the product, they can choose their own price. (Tesla)
3. Market niche
The company focuses on a specific part of the market. They use technology to get to
know their niche, collect data and target their customer. (Brauzz)
4. Customer and supplier intimacy
The company tries to build a long relationship with the customer, but also with the
supplier. The company collects a lot of data to make recommendations. (Netflix)
The role of information systems in these companies is to
- Support the company on its current course, or
- Support the company (or driver) in a fundamental change of the current course (Netflix).
Rapidly changing environment
Trends and challenges:
- Sustainability
Limits of the planet (emissions, energy, water, and circularity)
Human-centric (wellbeing, empowerment, skilled, war for talent)
- Resilience (weerstand)
Covid-19, Ukraine war, climate change, supply chain disruptions, …
As a company, do you become more flexible? Information systems can help with
realizing resilience.
- Customer expectations
Constantly changing
Transparency (how was the product made?), personalization (>< mass production),
experience (everything easy and digital for the customer).
Implementing information systems
Technology is only one piece of the puzzle.
Digitizing organizations is an architectural exercise with building blocks (management,
organization, and technology). Implementing information systems and technology alone
does not deliver a competitive advantage.
People like to believe that we are in the 5th industrial revolution, which is about making your
company more sustainable. “The transition to a sustainable, human-centric and resilient
European industry.”
2
,1.Information systems in global business today
1.1. How are information systems transforming business, and why are
they so essential for running and managing a business today?
A whole new world of doing business
5 trends:
1) Fast-evolving IT innovations
Cloud computing = saving files in the cloud.
Big data and Internet of Things = transformation from dumb objects to smart objects
(fridges, tables, … are being connected to the internet and have new features).
AI and machine learning = using collected data to make predictions (for example
predictive maintenance on a machine, predicting when there will be a problem).
Blockchain = making something, that is not secure, secure. It makes it impossible for
a company to change a block of data in the chain.
AR/VR/XR/Metaverse = the virtual world, used a lot for training or simulations.
5G
These innovations are enabling entrepreneurs and firms to create new products and
services, develop new business models and transform the day-to-day conduct of business.
Gartner Hype Cycle: shows the expectations of how
technology will evolve over time.
After the innovation trigger, companies will try
to invest in the technology.
They expect too much from it and they don’t get
the value they expected. They will stop investing
and create the trough of disillusionment.
Some companies will keep on believing and the
technology will get a second, third, … generation
leading to its plateau of productivity.
2) New Business Models coming up
For example, the online streaming music and video industry has forever been changed.
3) E-commerce expansion
E-commerce is possible because of new business models. E-commerce can be applied in
selling physical products (Zalando), selling services (Netflix, Spotify, Coursera) and in
selling both (Amazon, Swap fiets).
4) Management changes
Managers use social networks and collaboration tools to get data (social media to see
what customers and employees are thinking) and communicate better.
Business intelligence applications accelerate.
Managers now have online, nearly instant access to really important information they
need for accurate and timely decisions.
3
, 5) Changes in firms and organizations
Companies put less emphasis on hierarchy and structure and more on employees
taking on multiple roles and tasks and collaborating with others on a team.
Companies put greater emphasis on competency and skills.
They emphasize higher-speed and more-accurate decision making based on data and
analysis. They are more aware of changes in technology, consumer attitudes and
culture.
They demonstrate a greater willingness to interact with and listen to consumers.
They show better understanding of the importance of information technology.
Globalization challenges and opportunities: a flattened world
The internet and global communication have changed how and where business is done.
Drastic reduction of costs of operating and transacting on global scale. The possibility to
generate new businesses changed the way that leaders operate.
Competition for jobs, markets, resources, and ideas with highly educated, motivated
populations in low-wage areas in the less-developed world.
Growing interdependence of global economies.
Requires new understandings of skills, markets, and opportunities.
Information systems enable globalization of commerce.
The emerging Digital Firm/Organization
A digital firm can be defined along several dimensions:
A digital firm is one in which nearly all 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 = 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 are managed digitally (intellectual property, core competencies
and financial and human assets).
Any piece of information required to support key business decisions is available anytime and
anywhere in the firm.
Digital firms sense and respond to their environments far more rapidly than traditional firms,
giving them more flexibility to survive in turbulent times.
Digital firms offer extraordinary opportunities for more flexible global organization and
management.
In digital firms, both time shifting and space shifting are the norm.
Time shifting = business being conducted continuously, 24/7, rather than in narrow
“workday” time bands.
Space shifting = work is accomplished physically wherever in the world it is best
accomplished.
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