1. Chapter 1: Digital Firm 9.200 Information Systems for Management1 Chapter 1 Digital Firm

2. Chapter 1: Digital Firm 9.200 Information Systems for Management2 Why Information Technology (IT)? Organizations need IT to perform everyday work IT involved in every activity – product/service creation, marketing, sales, accounting, human resources management, short and long range decision making… Most of work today is about creating & manipulating information

3. Chapter 1: Digital Firm 9.200 Information Systems for Management3 Organizations need IT to be successful cost savings product/service quality improvement customer satisfaction market share “bottom line” – profitability or accomplishing social goals Why Information Technology (IT)?

4. Chapter 1: Digital Firm 9.200 Information Systems for Management4 New challenges in the Competitive environment Emergence of the global economy Transformation of industrial economies Transformation of the enterprise - emergence of new organizational forms, “digital firm” Why Information Technology (IT)?

5. Chapter 1: Digital Firm 9.200 Information Systems for Management5 What is Information Technology? Tools for managing information. Computer software & hardware and devices for creating, collecting, storing, retrieving, organizing, transferring and using data and information. Computer software & hardware (e.g., MS Office & PC) Devices: (A) electronic: calculators, organizers, etc.; (B) non-electronic (file cabinets, etc.)

6. Chapter 1: Digital Firm 9.200 Information Systems for Management6 What is an Information System (IS)? A set of interrelated components – IT, data and procedures - for managing certain kind of data to deliver specific information and accomplish certain organizational/management goals. managing certain kind of data (e.g., collecting, storing data on sales transaction) to deliver specific information (e.g., total sales per day/week/month, average sales, sales per salesperson…) accomplishing certain organizational/management goals (e.g., monitoring sales, controlling inventory levels, deciding on future orders, deciding on rewarding salespersons)

7. Chapter 1: Digital Firm 9.200 Information Systems for Management7 Data and Information Data Raw facts (e.g., product name, quantity sold, price, sale date) Information Organized data (e.g., summed quantities & prices of sold products, sold product list ordered alphabetically) Meaningful to people (e.g., help understand what is sold, how much money is made, etc.)

8. Chapter 1: Digital Firm 9.200 Information Systems for Management8 Four Activities (Parts) in an IS INPUT IT, PROCEDURES PROCESSING IT, PROCEDURES OUTPUT IT, PROCEDURES FEEDBACK INFORMATION SYSTEM Example: UPS Package Tracking System DATA INFORM- ATION

9. Chapter 1: Digital Firm 9.200 Information Systems for Management9 Roles of IS: A Business Perspective Information Systems ORGANIZATION (People, Structure, Processes; Needs and Problems) MANAGEMENT INFORMATION TECHNOLOGY IS is management solution for organizational needs & problems.

10. Chapter 1: Digital Firm 9.200 Information Systems for Management10 Roles of IS: Business Benefits Perspective Productivity (faster work, more work done in unit of time) Help accomplish organizational goals (product quality, service quality like in health care, customer service, market share increase, profit, etc.) Help redesign organizations (new forms – “digital firm”) Help redesign business (e.g., Internet and electronic commerce)

11. Chapter 1: Digital Firm 9.200 Information Systems for Management11 New Organizational Forms (Designs) - “Digital Firm” Flattening organizations Distributing work in physical space Redefining organizational boundaries Reorganizing business processes More room to professional work and ethics Changing management methods Mass customized products, micromarketing IT and ISes enable all of these Examples: Cisco Systems, Nygard (cases)

12. Chapter 1: Digital Firm 9.200 Information Systems for Management12 Business Uses of the Internet Communicate & Collaborate Find Information (products, suppliers, customers) Supply Information (Promote products) Perform Business Transactions (buy, sell, negotiate, exchange) – Electronic Commerce

13. Chapter 1: Digital Firm 9.200 Information Systems for Management13 Electronic Commerce (E-commerce) Buy & sell on the Internet (usually; private computer networks also used). Two kinds of transactions: Business-to-Consumer (e.g., http://www.chapters.indigo.ca/http://www.chapters.indigo.ca/ Business-to-Business (ordering, purchasing; e.g., http://www.nygard.com/ - case)http://www.nygard.com/ Electronic market/marketplaces Web site for matching buyers and sellers (e.g., http://www.expedia.ca ; check links About Expedia and Sell Through Expedia)http://www.expedia.ca

14. Chapter 1: Digital Firm 9.200 Information Systems for Management14 Key Management Issues Strategic Challenge: How can organizations use IT to become more competitive? (e-commerce, redesigning organization) Globalization Continuous IT innovation Drawing business value from IT/IS Ethical use of ISes Control costs of modern IT/IS (investments/returns, training and usage time, labor surplus, system downtime, system security, health problems, intellectual property violations)