1. 1.1 01 Week Chapter 1: Information Systems in Global Business Today Copyright © Prentice Hall, 2007

2. 1.2 LEARNING OBJECTIVES Management Information Systems Chapter 1 Information Systems in Global Business Today Explain why information systems are so essential in business today. Define an information system from both a technical and a business perspective. Identify and describe the three dimensions of information systems.

3. 1.3 Assess the complementary assets required for information technology to provide value to a business. Identify and describe contemporary approaches to the study of information systems and distinguish between computer literacy and information systems literacy. LEARNING OBJECTIVES (Continued) Management Information Systems Chapter 1 Information Systems in Global Business Today

4. 1.4 NBA Teams Make a Slam Dunk with IT Problem: management cannot make good decisions about how to improve the performance of teams and of individual players because it lacked precise data about plays. Solutions: Build IS to provide better information, rely on “best guesses” based on videotapes of games. Synergy Sports Technology solution makes it possible for basketball management to use objective statistical data about players, plays and outcomes to improve their decision making about what players should or shouldn’t do to most effectively counter their opponents. Management Information Systems Chapter 1 Information Systems in Global Business Today

5. 1.5 NBA Teams Make a Slam Dunk with IT Management Information Systems Chapter 1 Information Systems in Global Business Today Management Technology Organization Business Challenges Information System Business Solutions Develop team strategy Evaluate players Coach players Match video of plays with statistical data Tag and index plays Capture videos Maintain protected Web site Download video to iPods Lack of performance statistics High cost of players Intense competitive pressure Analyze player performance Analyze team performance Improve performance Increase revenue

6. 1.6 The Role of Information Systems in Business Today How information systems are transforming business Globalization opportunities The emerging digital firm Strategic business objectives of information systems Operational excellence New products, services, and business models Customer and supplier intimacy Improved decision making Competitive advantage Survival Management Information Systems Chapter 1 Information Systems in Global Business Today

7. 1.7 How Information Systems are Transforming Business Management Information Systems Chapter 1 Information Systems in Global Business Today In 2007, FedEx moved over 100 million packages in the US, mostly overnight and UPS moved 3.7 billion packages worldwide. Businesses sought to sense and respond to rapidly changing customer demand, reduce inventories to the lowest possible levels, and achieve higher levels of operational efficiency. By June 2008, more than 80 million businesses worldwide had dot-com Internet sites registered (60 million in the US alone). Today 138 million Americans shop online, and 117 million have purchased online. Everyday about 34 million Americans go online to research a product or service.

8. 1.8 How Information Systems are Transforming Business (cont.) Management Information Systems Chapter 1 Information Systems in Global Business Today E-commerce and Internet advertising are booming: Google’s online ad revenues surpassed $ 16.5 billion in 2007 Internet advertising continues to grow at more than 25 percent a year, reaching more than $ 28 billion in revenues in 2008 New federal security and accounting laws, requiring many businesses to keep e-mail messages for five years, coupled with existing occupational and health laws requiring firms to store employee chemical exposure data for up to 60 years, are spurring the growth of digital information now estimated to be 5 exabytes annually, equivalent to 37,000 new Libraries of Congress.

9. 1.9 Management Information Systems Chapter 1 Information Systems in Global Business Today The Role of Information Systems in Business Today Information Technology Capital Investment Figure 1-1 Information technology investment, defined as hardware, software, and communications equipment, grew from 34% to 51% between 1980 and 2008. Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 2008.

10. 1.10 What’s New in Management Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today In the technology area, there are 3 interrelated changes: 1.The emerging mobile digital platform (think iPhones, BlackBerrys, and tiny Web-surfing netbooks) 2.The growth of online software as a service 3.The growth in “cloud computing” where more and more business software runs over the Internet

11. 1.11 What’s New in Management Information Systems (cont.) Management Information Systems Chapter 1 Information Systems in Global Business Today Technology ChangeBusiness Impact Cloud computing platform emerges as a major business area of innovation A flexible collections of computers on the Internet begins to perform tasks traditionally performed on corporate computers More powerful, energy efficient computer processing and storage devices Intel’s new PC, processor chips consume 50% less power, generate 30% less heat, and are 20% faster than the previous models, packing over 400 million transistors on a dual-core chip Growth in software as a service (SaaS)Major business applications are now delivered online as an Internet service rather than as boxed software or custom system Netbooks emerges as a growing presence in the PC marketplace, often using open source software Small, lightweight, low-cost, energy efficient, net centric, sub- notebooks use Linux, Google Docs, open source tools, flash memory, and the Internet for their applications, storage, and communications. A mobile digital platform emerges to compete with the PC as a business system Apple opens its iPhone software to developers, and then opens an Applications Store on iTunes where business users can download hundreds of applications to support collaboration. Location-based services, and communication with colleagues.

12. 1.12 What’s New in Management Information Systems (cont.) Management Information Systems Chapter 1 Information Systems in Global Business Today Management ChangeBusiness Impact Management adopt online collaboration and social networking software to improve coordination, collaboration and knowledge sharing Google Apps, Google Sites, Microsoft;s Office Sharepoint and IBM’s Lotus Connections are used by over 100 million business decision makers worldwide to support blogs, project mgt, online meetings, personal profiles, social bookmarks, and online communities Business intelligence applications accelerate More powerful data analytics and interactive dashboards provide real-time performance information to managers to enhance management control and decision making Managers adopt millions of mobile tools such as smartphones and mobile Internet devices to accelerate decision making and improve performance The emerging mobile platform greatly enhances the accuracy, speed, and richness of decision making as well as responsiveness to customers Virtual meeting proliferateManagers adopt telepresence video conferencing and Web conferencing technologies to reduce travel time and cost while improving collaboration and decision makiong

13. 1.13 What’s New in Management Information Systems (cont.) Management Information Systems Chapter 1 Information Systems in Global Business Today Organizations ChangeBusiness Impact Web 2.0 applications are widely adopted by firms Web-based services enable employees to interact as online communities using blogs, wikis e-mail, and instant messaging services. Facebook and MySpace create new opportunities for business to collaborate with customers and vendors Telework gains momentum in the workplace The Internet, wireless laptop, iPhones, and Blackberrys make it possible for growing numbers of people to work away from the traditional office. 55% of US businesses have some form of remote work program Outsourcing productionFirm learn to use the new technologies to outsource production work to low wage countries Co-creation of business valueSources of business value shift from products to solutions and experiences and from internal sources to networks of suppliers and collaboration with customers. Supply chains and product development became more global and collaborative; customer interactions help firms define new products and service.

14. 1.14 What does globalization have to do with management information systems? The emergence of the Internet into a full-blown international communications system has drastically reduced the costs of operating and transacting on global scale. Communication between a factory floor in Shanghai and a distribution center in Rapid Falls, South Dakota, is now instant and virtually free. Customers now can shop in a worldwide marketplace, obtaining price and quality information reliably 24 hours a day. Globalization Challenges and Opportunities: A Flattened World Management Information Systems Chapter 1 Information Systems in Global Business Today

15. 1.15 What does globalization have to do with management information systems? (cont.) Firms producing goods and services on a global scale achieve extraordinary cost reductions by finding low-cost suppliers and managing production facilities in other countries. Internet service firms, such as Google and eBay, are able to replicate their business models and services in multiple countries without having to redesign their expensive fixed cost IS infrastructure. Half of the revenue of eBay in 2009 originates outside the US. Information systems enable globalization. Globalization Challenges and Opportunities: A Flattened World (cont.) Management Information Systems Chapter 1 Information Systems in Global Business Today

16. 1.16 Read the Interactive Session: Organizations, and then discuss the following questions: What are the advantages of working in a virtual environment like the one created by Accenture? What are the disadvantages? Would you like to work at a company like Accenture? Why or why not? Explain your answer. What kinds of companies could benefit from being run virtually like Accenture? Could all companies be run virtually like Accenture? Virtual Management at Accenture The Role of Information Systems in Business Today Management Information Systems Chapter 1 Information Systems in Global Business Today

17. 1.17 The Role of Information Systems in Business Today Management Information Systems Chapter 1 Information Systems in Global Business Today The Interdependence Between Organizations and Information Technology There is a growing interdependence between a firm’s information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do. Figure 1-2

18. 1.18 What is an information system? Dimensions of information systems –Organizations –Management –Technology It isn’t just a technology: A Business perspective on information systems Complementary assets: Organizational and management capital and the right business model Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

19. 1.19 Same Investment but Different Returns – Why?

20. 1.20 Complementary Assets Organizational assets –Supportive organizational culture that values efficiency and effectiveness –Appropriate business model –Decentralized authority –Distributed decision-making rights –Strong IS development team Managerial assets –Strong senior management support for technology investment and change –Incentives for management innovation –Teamwork and collaborative work environment –Training programs to enhance management decision skills –Management culture that values flexibility and knowledge-based decision - making

21. 1.21 Complementary Assets Social assets –The Internet and telecommunications infrastructure –IT-enriched educational programs raising labor force computer literacy –Standards (both government and private sector) –Laws and regulations creating fair, stable market environments –Technology and service firms in adjacent markets to assist implementation

22. 1.22 Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for a specific store or sales territory. Figure 1-3 Data and Information

23. 1.23 Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates value for the firm as an organizational and management solution to challenges posed by the environment. Figure 1-5 Information Systems Are More Than Computers

24. 1.24 Read the Interactive Session: Technology, and then discuss the following questions: What are the inputs, processing, and outputs of UPS’s package tracking system? What technologies are used by UPS? How are these technologies related to UPS’s business strategy? What problems do UPS’s information systems solve? What would happen if these systems were not available? UPS Competes Globally with Information Technology Perspectives on Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today

25. 1.25 Technical approach Emphasizes mathematically based models to study IS Computer science, management science and operations research Behavioral approach Does not ignore technology Concentrates on changes in attitudes, management and organizational policy and behavior. Approach of this text: sociotechnical systems Performance of a system is optimized when both the technology and the organization mutually adjust to one another until a satisfactory fit is obtained. Contemporary Approaches to Information Systems Management Information Systems Chapter 1 Information Systems in Global Business Today