©2002, Pearson Education Canada 1.1 c h a p t e r 1 1 MANAGING THE DIGITAL FIRM: CANADA AND BEYOND CANADA AND BEYOND

©2002, Pearson Education Canada 1.2 Learning Objectives Analyze the role of information systems (IS) in today’s competitive business environment Define an information system from both a technical and business perspective, and distinguish between computer literacy & IS literacy (continued...)

©2002, Pearson Education Canada 1.3 Learning Objectives Explain how information systems are transforming organizations and management Assess the relationship between the digital firm, electronic commerce, electronic business and Internet technology (continued...)

©2002, Pearson Education Canada 1.4 Learning Objectives (Continued) Identify the major management challenges of building and using information systems

©2002, Pearson Education Canada 1.5 Management Challenges Why information systems? Contemporary approaches to information systems New role of info systems in organizations Learning to use information systems: new opportunities with technology

©2002, Pearson Education Canada 1.6 Why Information Systems? Organizations need IS to survive and prosper New challenges in the Canadian environment –Emergence of the global economy –Transformation of industrial economies –Transformation of the enterprise –Emergence of the digital firm

©2002, Pearson Education Canada 1.7 What is an Information System? A set of interrelated components that –collect (or retrieve), –process, –store, and –distribute information to support decision-making and control in an organization.

©2002, Pearson Education Canada 1.8 DATA vs. INFORMATION Raw facts Represent events E.g. sales from a cash register Organized data Meaningful to people E.g. sales trends, comparison of brands

©2002, Pearson Education Canada 1.9 Four activities in an IS 1. INPUT2.PROCESSING 3.OUTPUT 4. FEEDBACK

©2002, Pearson Education Canada 1.10 Interaction with the IS Information System ORGANIZATION SUPPLIERS CUSTOMERS REGULATORY AGENCIES STOCKHOLDERS COMPETITORS

©2002, Pearson Education Canada 1.11 A Business Perspective on IS Info Systems ORGANIZATIONSTECHNOLOGY MANAGEMENT

©2002, Pearson Education Canada 1.12 Literacy Components Information Systems Literacy –Broad understanding of computer-based IS –Encompasses management & organizational dimensions –Includes technical dimensions (IT) Computer Literacy –Knowledge of technical dimensions (IT)

©2002, Pearson Education Canada 1.13 IS Support Business Functions Sales & Marketing Manufacturing & Production Finance Accounting Human Resources

©2002, Pearson Education Canada 1.14 People in the Organization Managers Knowledge Workers –Create knowledge for the organization Data Workers –Process the organization’s paperwork Production & Service Workers

©2002, Pearson Education Canada 1.15 Management in the Organization Senior managers –Long term strategic decisions Middle managers –Carry out plans of senior management Operational managers –Monitor organization’s daily activities

©2002, Pearson Education Canada 1.16 Information Technology (IT) Infrastructure Computer Hardware Computer Software Storage Technology Communications Technology

©2002, Pearson Education Canada 1.17 Approaches to IS Technical Approach –Emphasizes mathematically based models to study IS Behavioural Approach

©2002, Pearson Education Canada 1.18 Two Approaches to IS SOCIOLOGY ECONOMICS PSYCHOLOGY COMPUTERSCIENCE OPERATIONSRESEARCH MANAGEMENTSCIENCE TECHNICAL APPROACHES MIS BEHAVIOURAL APPROACHES

©2002, Pearson Education Canada 1.19 The Preferred Approach to IS IS performance is optimized when both the organization and the technology adjust to each other, until a good fit is obtained The Sociological Approach:

©2002, Pearson Education Canada 1.20 Interdependence of IS and the Organization hardware telecommunications database software INFORMATION SYSTEMORGANIZATION Business strategy Rules & procedures

©2002, Pearson Education Canada 1.21 The Impact of the Internet Communicate & Collaborate Access Information Participate in Discussions Supply Information Find Entertainment Exchange Business Transactions

©2002, Pearson Education Canada 1.22 Impact of IS on Organizational Design Flattening organizations Separating work from location Reorganizing workflows Increasing organizational flexibility Changing management process Redefining organizational boundaries

©2002, Pearson Education Canada 1.23 Internet-based technologies Intranet –An internal network based on Internet technologies Extranet –Private intranet that is accessible to authorized outsiders

©2002, Pearson Education Canada 1.24 The Emerging Digital Firm Electronic market –A marketplace that is created by computer & communications technologies, linking buyers and sellers E-commerce –buying & selling goods and services electronically E-business –Organizational communication, coordination & management using Internet technologies

©2002, Pearson Education Canada 1.25 The Emerging Digital Firm

©2002, Pearson Education Canada 1.26 Key Management Issues Strategic Challenge: –How can business use IT to become competitive, effective and digitally enabled? Globalization Challenge Information Architecture & Infrastructure Challenge IS Investment Challenge Responsibility & Control Challenge

©2002, Pearson Education Canada 1.27 Positive Impacts of IS Perform calculations & process paperwork faster than people Help companies learn about their customer’s preferences & purchases Provide new efficiencies (e.g. ATMs) Provide advances in medicine Internet allows distribution of information widely and quickly

©2002, Pearson Education Canada 1.28 Negative Impacts of IS May replace people & eliminate jobs May allow organizations to violate personal privacy System outages can cause critical shutdowns Heavy users may experience health problems Internet can be used to distribute illegal copies of software and violate intellectual property regulations

©2002, Pearson Education Canada 1.29 c h a p t e r 1 1 MANAGING THE DIGITAL FIRM: CANADA AND BEYOND CANADA AND BEYOND