Summary Business Modeling (L&L book)
Chapter 1: Information Systems in the Digital Age
1.1 The role of Information Systems in Business today
If you and your business are not connected to the internet and wireless
networks, chances are not being as effective as you could be. It is a new world of
doing business.
What’s new in MIS (Management Information Systems)?
There is the continual change in technology, management use of the technology,
and the impact on business success. Successful firms are those that learn how to
use the new technologies.
Technology
o The mobile digital platform composed of smartphones and tablet
devices
o The growing business use of big data
o The growth in cloud computing, where more business software runs
over the Internet
Management
o Online collaboration and social networking (Google Drive,
SharePoint)
o Business intelligence applications accelerate (more powerful data
analytics)
o Virtual meetings proliferate (video conferencing)
Organizations
o Social business (social media)
o Telework gains momentum in the workplace (remote work
programs)
o Co-creation of business value (value shift from products to
solutions)
The strength of cloud computing and the growth of the mobile digital platform
mean that organization can rely more on telework, remote work, and distributes
decision making.
What does globalization have to do with management information systems?
EVERYTHING
Internet service firms, like Google and eBay, can replicate their business models
and services in multiple countries without having to redesign their expensive,
fixed-cost information systems infrastructure.
Business drivers of Information Systems
Operational excellence
Improve the efficiency of operations -> achieve higher profitability
New Products, Services and Business Models
Information Systems and technologies are a major enabling tool for firms
to create new products/services, as well as entirely new business models.
o Business model: describes how a company produces, delivers, and
sells a product/service to create wealth
Customer and Supplied Intimacy
, Getting to know its customers and services them well -> customers
respond by returning and purchasing more -> raises revenues and profits
o Suppliers: the more a business engages its suppliers, the better the
suppliers can provide vital inputs -> lowers costs
Improved Decision Making
Operating in fog bank: never having right information at the right time to
make an decision (rely on forecasts, best guesses, luck) -> IS made it
possible to use real-time data from the marketplace when making
decision.
Competitive Advantage
Doing things better than your competitors, charging less for superior
products, and responding to customers and suppliers in real time -> add
up to higher sales
Survival
Necessities of doing business driven by industry-level changes
When firms can’t achieve these objectives, they become challenges/problems
that receive attention. Managers and employees who are aware of these
challenges often turn to information systems.
1.2 Perspectives on Information Systems and Information Technology
Information technology (IT): consists of all the hardware and software that a
firm needs to use to achieve its business objectives
- Includes: computers, storage technology, mobile handheld devices,
software, computer programs
Information system (IS): set of interrelated components that collect, process,
store, and distribute information to support decision making, coordinating, and
control in an organization
- Help managers/workers analyze problems, visualize complex subjects,
create new products
- Contain information about: people, places, things within the organization
or environment
o Information: data that have been shaped into a form that is
meaningful and useful to human beings
o Data: 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
Three activities produce the information that organizations need:
Input: collects 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 people who will use it or to
the activities for which it will be used
Feedback: output that is returned to appropriate members of the
organization to help them evaluate or correct the input stage
Computers and programs cannot produce the information a particular
organization needs, but they are part of an information system.
,Information systems literacy: behavioral as well as a technical approach to
studying information systems
Computer literacy: knowledge of information technology
Management information systems (MIS): tries to achieve this broader
information systems literacy, deals with behavioral issues as well as technical
issues surrounding the development, use and impact of information systems
used by managers and employees in the firm
Dimensions of Information Systems
Organizations
Accomplishes and coordinates work through a structured hierarchy and through
its business processes and has its own culture
Business processes: logically related tasks and behavior for accomplishing
work
o Developing a new product, fulfilling an order, hiring a new employee
o Include formal rules that have been developed over a long time
Culture: fundamental set of assumptions, values, and ways of doing
things, that has been accepted by most of its members
o Parts of an organization’s culture can always be found embedded in
its IS
Different levels/specialties in an organization create different interests and
points of view -> often conflict -> basis for organizational politics.
People
A business is only as good as the people who work there and run it.
Managers must do more than manage, they also create new products/services
and re-create the organization from time to time.
Technology is relative inexpensive today, but people are very expensive,
because people are the only ones capable of business problem solving and
converting information technology into useful business solutions.
Technology
Information technology is one of many tools managers use to cope with
change/complexity.
Computer hardware: physical equipment used for input, processing, and
output activities in an information system
Computer software: consists of the detailed, preprogrammed instructions
that control and coordinate the computer hardware components in
information system
Data management technology: consists of software governing the
organization of data on physical storage media
Networking and telecommunications technology: consisting of physical
devices and software, links the various pieces of hardware and transfers
data from one physical location to another
Network: links two or more computers to share data or resources (e.g.
printer)
Internet is the mostly used network.
o Intranets: internal corporate networks bases on Internet technology
o Extranets: private intranets extended to authorized users outside
the organization
, World Wide Web: service the Internet provides that uses universally
accepted standards for storing, retrieving, formatting and displaying
information in a page format on the Internet
Information Technology (IT) infrastructure : provides the foundation, or
platform, on which the firm can build its specific information systems
o UPS invest heavily in Information Systems technology to make its
business more efficient and customer oriented.
1.3 Understanding Information Systems: A Business Problem-Solving
Approach
Problem solving approach
1. Problem identification:
o Understand what kind of problem exists
o Problems have to be properly defined by people in an organization
before they can be solved
Three different dimensions of business problems
Organizational: poor business processes, unsupportive culture,
political infighting, changes in the organization’s surrounding
environment
Technology: insufficient or aging hardware, outdated software,
inadequate database capacity, insufficient network capacity,
incompatibility of old systems with new technology
People: employee training, difficulties of evaluating performance,
legal/regulatory compliance, ergonomics, poor/indecisive
management, employee support
2. Solution design:
Design solutions to the problem(s) you have identified
o There are usually many solutions to any given problem.
o Most successful solutions result from an integrated approach in
which changes in organization and people accompany new
technologies
3. Solution evaluation and choice:
Choose the best solution
o Factors to consider: costs, feasibility and length of time of the
solution
o A solution that does not have the support of all major interests in
the business can quickly turn into a disaster.
4. Implementation:
The best solution is one that can be implemented.
o Involves building the solution and introducing it into the
organization
Includes purchasing or building the software and hardware
o Change management: refers to the many techniques used to bring
about successful change in a business
o Measurement of outcomes
After a solution has been implemented, it must be evaluated
to determine how well it is working and whether any
additional changes are required to meet the original
objectives
