Why Information Systems (IS)? Most organizations need IS to survive and prosper. IS can help companies extend their reach to faraway locations, offer new products & services. IS reshape jobs & work flows and perhaps influentially change the way companies conduct business. Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

The Competitive Business Environment Four powerful worldwide changes have altered the business environment. Those are: Emergence of the global economy Transformation of industrial economies Transformation of the business enterprise The emerging digital firm Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Emergence of the Global Economy Today, IS provide the communication and analytic power that firms need for conducting trade and managing businesses on a global scale. Companies are also distributing core business functions in product design, manufacturing, finance, and customer support to locations in other countries where the work can be performed more cost effectively. Communicating with distributors and suppliers, operating 24 hours a day in different national environments, coordinating global work teams, and servicing local and international reporting needs require powerful IS responses. Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Transformation of Industrial Economies The United States, Japan, Germany, and other major industrial powers are being transformed from industrial economies to knowledge- and information-based service economies, whereas manufacturing has been moving to low-wage countries. Knowledge-based products and services of great economic value, such as credit cards, overnight package delivery, and worldwide reservation systems, are based on new information technologies. Information technology constitutes more than 70 percent of the invested capital in service industries such as finance, insurance, and real estate. IS are needed to optimize the flow of information and knowledge within the organization and to help management maximize the firm’s knowledge resources. Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Transformation of the Business Enterprise The new style of business firm is a flattened (less hierarchical), decentralized, flexible arrangement of generalists who rely on nearly instant information to deliver mass-customized products and services uniquely suited to specific markets or customers. The new manager relies on informal commitments and networks to establish goals (rather than formal planning), a flexible arrangement of teams and individuals working in task forces, and a customer orientation to achieve coordination among employees. The new manager appeals to the knowledge, learning, and decision making of individual employees to ensure proper operation of the firm. Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

The Emerging Digital Firm A digital firm is one where nearly all of the organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated. Four major systems that help define the digital firm are: Supply chain management systems – seeking to automate the relationship between suppliers and the firm to optimize the planning, sourcing, manufacturing, and delivery of products and services Customer relationship management systems – attempting to develop a coherent, integrated view of all the relationships a firm maintains with its customers Enterprise systems – creating an integrated enterprise-wide IS to coordinate key internal processes of the firm, integrating data from manufacturing and distribution, sales, finance, and human resources Knowledge management systems – seeking to create, capture, store, and disseminate firm expertise and knowledge Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

What is an Information System (IS)? Definition: A set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making, coordination, and control in an organization Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Information Systems (IS) Information systems contain information about significant people, places, and things within the organization or in the environment surrounding it. Information – data that have been shaped into a form that is meaningful and useful to human beings 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. Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Information Systems (IS) Three activities in an information system produce the information. Those are: Input: Capturing or collecting raw data from within the organization or from its external environment Processing: Converting the raw input into a more meaningful form (information) Output: Transferring the processed information to the people who will use it Feedback: Returning output to appropriate members of the organization to help them evaluate or correct the input stage Raw Data Information Feedback Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon