MIS 2000 Chapter 1: Managing the Digital Firm

IS for Management Outline Digital Firm Data, Information, Knowledge Information System (IS) IS User Information Technology Characteristics of Useful Data Pros and cons (risks) associated with IS

Digital Firm Organization in which most of work is supported by electronic (digital) information systems (ISes). Examples in chapter: –Toyota’s order management system – links customers, dealerships, Toyota factories, & Toyota’s suppliers –Dell’s build-to-order system – similar –Wal-Mart's inventory & supplier management system –Fairmont hotels’ system tracking customers’ preferences –UPS’ parcel tracking system More… IS for Management1 of 9

Digital Firm IS for Management2 of 9 Changing operations (organizational processes) – UPS, Toyota, Dell Inter-organizational linkages and systems (Toyota, Dell) Flattening of organizations - less hierarchy (IBM’s transformation) Separating work from central location (Accenture) Mass customization strategy (Toyota, Dell)

Data, Information, Knowledge IS for Management3 of 9 Digital firm runs on digital data & information, i.e., on electronic IT supporting these. Data: Raw facts ( product name, quantity sold, price, sale date) Information: Organized & meaningful data (summed quantities of products sold, sales reports) –Helps understand what is sold, how much money is made More…

Data, Information, Knowledge IS for Management4 of 9 Knowledge: Memory structures in human brain What something is (definitions, relationships) Why something is (cause-effect relationships) How to do to something (procedures, skills, experience) Can be represented through data and information in communication, books, computers… Professionals Clerks Information Knowledge Data Managers

Information System (IS) Any system is a set of parts with a common purpose. Parts designed to perform different roles: –Input part – takes Data in –Process part – processes/transforms inputted Data –Output part – puts out organized, meaningful Data –Feedback part – takes environment’s response to outputted information IS for Management5 of 9

Information System (IS) IS for Management 6 of 9 An IS is a system provide information (data organized and meaningful) to users. ENVIRONMENT Other parts of an IS are: - DATA (input, processed, stored, feedback) - MANUAL PROCEDURES performed by Users. User – primary; manipulates data & IT User – secondary; consumes information INPUT - keyboard, mouse) PROCESSING, STORAGE, TRANSEFR - software & hardware parts OUTPUT - screen, printer FEEDBACK DATA Organized

Information Technology IS for Management7 of 9 Tools for managing data In a computer-based IS, each part (input, process…) is made from particular kinds of IT – special hardware & software There are other electronic devices that we also call IT: cell phones, calculators, personal digital assistants, gaming devices Pre-electronic technologies (paper)

IS for Management Characteristics of Useful Data IS for Management8 of 9 The business purpose of IS is to provide useful information Useful information builds on useful data: - accuracy - currency - completeness - relevance - economical

Pros and cons (risks) Associated with IS Pros (ups, advantages): Look at case firms in Chapter Cons (challenges, risks): –Directions of IT development (tech. risk) –Figuring how to change organization with IT (Dell) –Figuring how to compete with IT, strategy (Apple’s iPod & iTunes) –Financial risks (growing expenses) –More information and communication – always good? –Legal, ethical, responsible use of ITS (Fairmont, info privacy) IS for Management9 of 9