Business Information Systems
Chapter 1 – Managing in the digital world
Digital innovation: product, process, or business model that is perceived as new, requires
some significant changes on the part of the adopters, and is embodied in or enabled by IT
- Rapid technological developments and radical changes in how organizations deal
with information
Digitalization: taking something that used to be physical/ analog and transforming it to be
digital
- Zoom: physical, face-to-face meetings -> virtual meetings
Moore’s law: rapid performance improvements of IT components due to exponential
growth in computing power, the number of transistors, data processing, network capacity
- Zoom: made possible to use this by exponential growth in computing power, data
processing, network capacity, algorithms
Network effects: the value of a network (or tool or application based on a network)
increases with the number of other users. Few users, network has little or no value
- Zoom: one person using it does not work
Phases of digital innovation: discovery, development, diffusion, impact
Managers should be digital innovators: understand new technologies enable
transformations in the way we live and work and how companies organize
Knowledge worker: product of digital age, professionals who are relatively well educated
and who create, modify, and synthesize knowledge as a fundamental part of their job
Knowledge society emerges where information is more important than land, labor, and
capital resources and with the growth and rise in importance of knowledge workers
E-business: an organization that uses information technologies or systems to support nearly
every part of its business
E-commerce: the use of internet and related technologies to support commerce
Digital divide: those with access to information systems have great advantages over those
without access to information systems.
Increase in Digital density (the amount of connected data per unit of activity), every unit of
activity generates ever more connected data, enabling new value added interactions and
business models through radical innovations
- Connections: Five IT megatrends: mobile, social media, internet of things, cloud
computing, big data
o Internet of Things (IoT)—a network of broad range of physical objects
(computers) that can automatically share data over the internet
o Industrial Internet of things(IIoT): the use of IoT technologies in
manufacturing
, o Cloud computing: making hardware, software, and data available on-demand
via a network. Store data and maintain information systems infrastructure
and use the Internet as the platform to access applications and data stored in
the cloud
o Companies in information era are creating value from data, not from people
o Wearable technology: clothing that incorporates electronic technologies
- Interactions: network effects
- Data: Big Data: large and complex datasets analyzed computationally to reveal
patterns, trends relating to human behavior and interactions and are high volume,
variety (i.e., many different types of data), and velocity through 24/7 connectivity
Computer literacy: knowing how to use a computer and use certain applications, not
sufficient in today’s world
Computer fluency: the ability to independently learn new technologies as they emerge and
assess their impact on work and life, will set you apart in the future.
Information systems: people build hardware, software, telecommunication networks and
use it to collect, create, process, store, and distribute useful data in organizational setting
Interrelated (inseparable) components of IS:
- Technology IT: hardware, software, networks
- Organization: structure, culture, process, strategy
- Individuals: work, motivation, user friendliness
Primary function is converting data into information
Need for IS because of: increasing need for information processing (complex and global
markets) and increasing availability of data (big data)
- Technological innovation: computers, internet, mobile, smart devices, wearables, AI
Deal with all that information by reducing need for information processing, and increasing
capacity for information processing (through IS and technological capabilities)
IS is positively related to financial results, operational efficiency, and competitive advantage
because IS can provide value through:
- Automating by doing things more efficiently, faster, consistently, and more precisely
- Learning by improving business process based on available information, better
- Supporting the organizational strategy by doing things smarter
- Strategic planning: convert vision into measurable performance targets
Position strategies used by organization
- Low-cost leadership strategy: offer best prices in the industry
- Differentiation strategy: provide better products than competitors
- Best-cost provider strategy: offering reasonably good quality products
Technological determinism: implementing new technology will always improve
performance
Globalization: the integration of economies throughout the world, enabled by innovation
and technological progress such as information technology
, Technological change: development of low-cost computing platforms and communication
technologies, low-cost communication systems (skype), low-cost global telecommunication
infrastructure (internet)
Outsourcing: the moving of business processes or tasks to another company or another
country (onshore – domestic or offshore)
- Outsourcing on global scale (costumer service):
- Reduce or control costs, increase process efficiency, increase revenue potential
- Free up internal resources, focus on core activities
- Gain access to world-class capabilities, reduce time to market
Data: raw symbols (characters and numbers), no meaning in and of themselves, are of little
value until process, recorded by observation, not organized to convey specific meaning
Information: data that is formatted, organized, or processed to make it useful and
transformed into information with the help of IS, representation of reality
Knowledge: ability to understand information, form opinions, and make decisions or
predictions based on the information = skills + experience + accumulated learning +
judgement
Information technology: hardware, software, telecommunication networks
- Hardware: physical computer equipment (table, computer, keyboard)
o Computer hardware has replaced these physical artifacts, providing the
technologies to input and process data and output useful information
- Software: set of programs that tell the computer to perform a certain task
o 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
- Telecommunication networks: a group of two or more computer systems linked
together with the hardware
o Telecommunication networks allow computers to share data and services,
enabling the global collaboration, communication, and commerce
Hardware -> smaller, more processing and storage capacity
Software -> smarter, interconnected
Networks -> larger scope, mobile, interconnected
Challenge of the information age: digital innovation has increased the amount of available
information and the capacity to store and transmit it. How to make sense of all the data and
turn it into information, deriving value from it…
Technology is not a magic bullet: implementing will not improve performance by itself.
IS has a positive influence on organizational performance through user acceptance, social
influence, organizational culture and structure, fit with business processes, partners and
technology, IT knowledge and expertise
