The Information Systems Revolution

Transforming Business and Management

Class Activity

• Break into groups of four and – Introduce yourself to the members of your

group and describe yourself to the members of your group

– Information technology can help companies to…

– Identify five knowledge- and information-intense products

VW Mexico and the Internet

• SAP’s ERP system integrated with the web to reduce part ordering time from 10 to 5 days– Enabled dealer to use a browser and get order

information through an intranet on the worldwide web

VW Mexico and the Internet

• SAP’s ERP system integrated with the web to reduce part ordering time from 10 to 5 days– Enabled dealer to use a browser and get order

information through an intranet on the worldwide web

Information Systems…

Can help companies to:– Extend their reach to faraway locations– Offer new products and services– Reshape jobs and work flows, and perhaps

profoundly change the way they conduct business

Three Powerful Worldwide Changes

1. Globalization

2. Transformation of industrial economies to knowledge and information-based economies

3. Transformation of the enterprise

Globalization

• Management & Control In A Global Marketplace

• Competition In World Markets

• Global Work Groups

• Global Delivery Systems

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Globalization

• Information systems are a powerful ally enabling businesses to– Communicate with distributors, suppliers, and

customers worldwide– Operate 24/7– Serve local and international reporting needs– Compete globally by bringing your products

and services to a global market

Transformation of Industrial Economies…

• To knowledge- and information-based service economies.– Increase need for white-collar workers– Manufacturing has moved to low-wage

countries– Knew knowledge- and information-intense

products

Transformation of Industrial Economies…

• To knowledge- and information-based service economies.– Increase need for white-collar workers– Manufacturing has moved to low-wage

countries.– Knew knowledge- and information-intense

products

Transformation of Industrial Economies…

• To knowledge- and information-based service economies.– Increase need for white-collar workers– Manufacturing has moved to low-wage

countries. For how long?– Knew knowledge- and information-intense

products

LABOR FORCE COMPOSITION 1900-1996

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0%

10%

20%

30%

40%

50%

60%

70%

YEAR

% SERVICE% WHITE COLLAR% BLUE COLLAR% FARMING

Economic Transformation

• Knowledge-based Economies• Productivity• New Products & Services• Knowledge As An Asset• Time-based Competition• Shorter Product Life• Turbulent Environment• Limited Employee Knowledge Base

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Knowledge- and Information-Intense Products

• Credit cards

• Overnight package delivery

• Worldwide reservation systems

Transformation Of The Enterprise

• Flattening• Decentralization• Flexibility• Location Independence• Low Transaction Costs• Empowerment• Collaborative Work

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What is an Information System

• A set of interrelated components that– Collects data - INPUT– Transforms data - PROCESS– Disseminates information - OUTPUT

SYSTEMSYSTEM

INPUT OUTPUTPROCESS

FEEDBACK

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FUNCTIONS OF AN INFORMATION SYSTEMFUNCTIONS OF AN INFORMATION SYSTEM

INPUT OUTPUTPROCESS

FEEDBACK

INFORMATION SYSTEMINFORMATION SYSTEM

ENVIRONMENTENVIRONMENT

Customers Suppliers Customers Suppliers

Regulatory Regulatory Stockholders CompetitorsStockholders CompetitorsAgenciesAgencies

ORGANIZATIONORGANIZATION

What is an information system?

• An organizational and management solution, based on information technology, to a challenge posed by the environment.

INFORMATION SYSTEMSINFORMATION SYSTEMS

ORGANIZATIONSORGANIZATIONS TECHNOLOGYTECHNOLOGY

MANAGEMENTMANAGEMENT

INFORMATIOINFORMATIONN

SYSTEMSSYSTEMS

The Key Elements of an Organization

• People

• Structure and operating procedures

• Politics

• Culture

People

1. Knowledge workers– Product or service designers and knowledge

creators

2. Data workers– The paper-pushers

3. Production or service workers– Producers/service providers

Structure

• Sales and Marketing

• Manufacturing

• Finance

• Accounting

• Human Resources

SOCIOTECHNICAL PERSPECTIVE

Information systems are sociotechnical systems. Though they are composed of machines devices, and “hard” physical technology, they require substantial social, organizational, and intellectual investment to make them work properly

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APPROACHES TO INFO SYSTEMS

SOCIOLOGYSOCIOLOGY

POLITICAL POLITICAL SCIENCESCIENCE

PSYCHOLOGYPSYCHOLOGY

COMPUTER COMPUTER

SCIENCESCIENCEOPERATIONS OPERATIONS

RESEARCHRESEARCH

MANAGEMENTMANAGEMENT

SCIENCESCIENCE

MISMIS

TECHNICAL APPROACHESTECHNICAL APPROACHES

BEHAVIORAL APPROACHESBEHAVIORAL APPROACHES

Behavioral Approach

• Focuses on strategic business integration, design, implementation, and utilization

• Focuses on changes in– Attitude– Management and organizational policy– Behavior

SYSTEM INTERDEPENDENCE

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASEDATABASE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

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INTERDEPENDENCEINTERDEPENDENCE

Information System Impacts

• What a business would like to do in five years is often dependent on what its systems will be able to do– Becoming the high-quality or low-cost

producer– Developing new products– Increasing employee productivity

• 1950s: TECHNICAL CHANGES• 60s-70s: MANAGERIAL CONTROL• 80s-90s: INSTITUTIONAL CORE ACTIVITIES

GROWING IMPORTANCE

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SCOPE OF INFO SYSTEMS

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Computing Power

• Doubling every 18 months

• The performance of the microprocessors have improved 25,000 times since their invention 25 years ago

• Soaring power has spawned powerful communications networks the largest of which is…

What You Can Do On The Internet• Communicate & Collaborate

– e-mail

• Access Information – Databases

• Discussions– Chats

• Obtain Information– FTP

• Entertainment – Play…, view…, read…, animate…

• Business Transactions– Advertise, sell, and purchase

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The Number of Internet Users

• Greater than 250 million today!

New Options For Organizational Design

• Flattening Organizations• Separating Work From Location• Increasing Flexibility• Refining Organizational Boundaries• Reorganizing Work Flows

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The Changing Management Process

• Enterprise Resource Planning

• Electronic Commerce

• Electronic Business

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Enterprise Resource Planning

Software Integrates All Facets:

• Planning, Manufacturing, Inventory, Sales, Finance, Accounting

• Transactions Alert All Involved Factors

• Updates Files, Speeds Action, Cuts Cost

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Electronic Commerce

• Internet Links Buyers, Sellers

• Lowers Transaction Costs

• Goods & Services Advertised, Bought, Exchanged Worldwide

• B2B Transactions Increasing

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Electronic Business

• Intranet: Business Builds Private, Secure Network

• E-mail, Web Documents, Group Software Extends Effective Communication & Control

• Virtual Organization

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SALES & MARKETING

COMPANY

FINANCE COMPANY

LOGISTICS

COMPANY

DESIGN

COMPANY

MANUFACTURING

COMPANY

VIRTUAL ORGANIZATION

CORECORE

COMPANYCOMPANY

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CHALLENGE OF INFO SYSTEMS

• STRATEGIC: Maintaining a competitive edge

• GLOBALIZATION:Integrated systems

• INFO ARCHITECTURE: Development

• INVESTMENT: What is the value?

• RESPONSIBILITY & CONTROL: Ethics

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