1. Introduction Information Management

2. Objectives zUnderstand the role of Information Technology and Electronic Commerce in business zBe able to specify an information technology product for your company zBe literate in the fundamental vocabulary of technology infrastructure zAcquire basic personal IT skills

3. Trends in Information Technology zCost-Performance Improvement zCompeting With Information zInformation Superhighway zExtracting Knowledge from Data zNetworked Computers and Distributed Architectures zUser Friendly Systems

4. What Is Information? zData Raw facts. Computers store data. zInformation Data in the correct form. Output of an information system. zKnowledge Solutions to problems. Information and rules needed to solve specific problems. zWisdom Questions that should be asked.

5. Role of Information in Organizations ASSET COMMODITYRESOURCE

6. What is Information? zBusiness resources are: Land, Labor, Capital. ….Information zReplacement for traditional resources zMedium of exchange zProduct

7. Information zAdds to knowledge zHas surprise value zReduces uncertainty zLeads to action zChanges a decision zRelevant zVaries by function and level of management

8. Why Study Information Technology? Moore’s Law: Chip capacity doubles every 18 Months.

9. Next Generation 72% have a PC at home 72% used a computer before they were 10 59% expect to get their news from the Internet by 2000 66% call themselves Intermediate, Expert or Power users

10. The Value of Technology zElectric Power Growth Trends

11. The Value of Technology zIT Growth Trends

12. Information Systems Concepts 2 zIS Productivity Paradox zRealizing benefits from IS yIntegrated Information Systems yInterorganizational Information Systems yStrategic Information Systems yTransformational Information Systems

13. Why the Benefits of IT are Not Achieved zLack of knowledge about IT and IT management zIncompatible hardware and software zInefficiencies in work processes zIncompatible organizational cultures and climates IT Productivity Paradox

14. IS Productivity Paradox z$1 trillion dollars spent on computer and communication technologies since 1980 zSystematic relationship to financial performance? zPeople make the difference zFour pathways for realizing benefits

15. Definition: Information System za computerized system that processes data and produces information (SSC) za collection of components that collects, processes, stores, retrieves and disseminates information for a specific purpose za computer system designed to accomplish business objectives (IS Primer, Part I)

16. IS Categories

17. Types of Information Systems zCost displacement … Automation systems zImproved management … Transaction Processing and Information Reporting zStrategic support … Decision Support, Executive Information Systems and Expert Systems zBasis of competition … Data Warehousing, e-Business, Strategic Information Systems

18. Components of IS and Definition of System zSystem: A group of parts or components working together to accomplish a goal zComponents of IS: Data Hardware Software Trained personnel Procedures

19. Managing Information with Information Systems TECHNOLOGY + DATA + PROCEDURES + PEOPLE = INFORMATION SYSTEM

20. Benefits of IS zTypes yDistribution yEfficiency yAutomation zArise from changes in work tasks, procedures and arrangements not just from technology zPotential vs. Actual

21. Information Management in the 21st Century zSucceeding in a Global Environment zThe Focus on Quality and Performance zBusiness Process Redesign zBuilding Individual Capabilities and Productivity zTime to Market

22. Challenges for Effective Information Management zUsing Technology Appropriately to Meet Information Needs zDealing with Too Little, Too Much, or Conflicting Information zResponding in a Timely Fashion

23. 1

24. Types of Information Systems zTransaction Processing Systems (TPS) zInformation Reporting Systems (IRS) zDecision Support Systems (DSS) zExecutive Information (Support) Systems (EIS) zExpert Systems (ES)

25. Transaction Processing Systems zTransaction - Basic business event, act or process zTPS ybackbone of an org’s information systems ycapture data on “business events” ystore these data in databases yuse data to efficiently handle day-to-day business operations yprovide information needed by law ymay be complex

26. Transaction Processing Terms zBatch processing - transactions are collected as they occur and placed in groups or batches to be processed periodically zOn-line processing - data are processed as soon as transaction occurs

27. Transaction Processing: Question zWhich business events? zWhat data should be captured? zWhen should it be captured?

28. Transaction Processing: Guidelines zCapture sufficient data zKeep accurate zMinimize redundancy zKeep current

29. Information Reporting zRetrieving data stored in databases to produce predefined information reports for managers and other employees zRoutine reports zStructured problems zTypes of Reporting yPeriodic yException

30. Information Reporting: Questions zHow many reports should be produced? zWhen should reports be received? zWho should control the distribution of reports?

31. Information Reporting: Guidelines zKeep evaluating the report zHighlight important data zInclude positives and negatives

32. Decision Support zRetrieving data stored in databases and then combining these data with analytical rules to create on-demand (often ad hoc, normally interactive) reports to help employees make the decisions they face. zSemi-structured problems zSensitivity and goal seeking analysis

33. Decision Support: Functionality zDecision structures zAccess to data (Special database) zAnalytical tools (Model base) zUser-friendly interface

34. Decision Support: Questions zWhen should such support be restrictive rather than flexible? zWho should define and design these support tools?

35. Decision Support: Guidelines zInterface should be consistent with user’s cognitive view of problem zA DSS database is established separate from operational databases zIt may be desirable to restrict user’s actions

36. Executive Information zAlso called Executive Support Systems (ESS) zGeared toward top level managers zProvide drill down zHave excellent GUI zOffer status access zOffer access to external databases zMay include DSS

37. Executive Information: Questions zHow can use of the system be promoted? zWho should use the system?

38. Executive Information: Guidelines zTimeliness of information is critical. zThe system must provide broad, aggregated data with the ability to expand to the detail level. zThe system must be tailored to the needs of the managers within the specific company.

39. Expert Systems- Characteristics zArtificial Intelligence (AI) application zActs like expert zProvides explanations zMay be rule- or case-based zMay provide consistent, reproducible second opinion

40. Expert Systems: Components zKnowledge rule database zDomain database zDatabase management system zKnowledge Acquisition/Explanation subsystem zGUI zInference engine

41. Expert Systems: Questions zHow accurate is the information provided by the system? zHow should the system be used? zHow can the system be designed to respond to unusual situations? zHow can the system be updated? zHow can you give the system common sense?

42. Expert System: Guidelines zThe key to a good expert system is successful knowledge acquisition from the expert. zThe information must be timely and complete.

43. Strategic Information Systems zTactics ybecoming a low-cost producer yimproving products/services yintroducing new products/services ycreating barriers to entry ydiscourage customers from switching to competitors ygaining power position over suppliers or customers yproviding management with higher quality information xtimely xaccuracy xcompleteness u Such strategic benefits often are not realized. Why not? u When they are realized, they are usually short-lived. Why are they so difficult to sustain? u What is the basis by which an organization can realize a sustained competitive advantage through its information systems?

44. Strategic Information Systems zIS that help gain strategic advantage zSignificantly change manner in which business supported by the system is done zOutwardly aimed at direct competition zInwardly focus on enhancing the competitive position zCreate strategic alliances

45. Firm Infrastructure (general management, accounting, finance, strategic planning) Human Resource Management (recruiting, training, development) Technology Development (R&D< product and process improvement) Procurement (purchasing of raw materials, machines, supplies) Support Activities Primary Activities Inbound Logistics (raw materials handling and warehous- ing) Operations (machine assembling, testing) Outbound Logistics (warehous- ing and distribution of finished product) Service (installation, repair, parts) Marketing and Sales (advertising, promotion, pricing, channel relations)

46. Value Chain Model zChain of basic activities that add to firm’s products or services zPrimary activities zSecondary activities

47. Value Chain Primary Activities zInbound zOutbound zOperations zMarketing and Sales zAfter-Sale Services

48. Value Chain Support Activities zTechnology development zProcurement zHuman Resources Management zManagement Control yaccounting/finance ycoordination ygeneral management ycentral planning

49. Competitive Forces zThreat of entry of new competition zBargaining power of suppliers zBargaining power of buyers zThreat of substitute products or services zRivalry among existing firms

50. Strategies for Competitive Forces zNote - strength of force is determined by factors in industry zGain a competitive edge zBuild defenses against forces zFormulate actions to influence forces

51. Three Generic Strategies zCost leadership (lowest cost in i ndustry) zDifferentiation of products/services zFocus (fin ding a specialized niche)

52. Be Low Cost Producer - IT strategic if it can: zHelp reduce production costs & clerical work zReduce inventory, accounts receivable, etc. zUse facilities and materials better zOffer interorganizational efficiencies

53. Produce Unique Product - IT strategic if it can: zOffer significant component of product zOffer key aspect of value chain zPermit product customization to meet customer’s unique needs zProvide higher/unique level of customer service/satisfaction

54. Fill Market Niche - IT strategic if it can: zPermit identification of special needs of unique target market zSpot and respond to unusual trends

55. Strategic Questions zCan IT create barriers to entry? (new entrants) zCan IT build in switching costs? (buyers) zCan IT strengthen customer relationships? (buyers)

56. Strategic Questions (cont) zCan IT change the balance of power in supplier relationships? (suppliers) zCan IT change the basis of competition? (competitors) zCan IT generate new products?(competitors, substitutes)

57. Risks of IS Success zChange the Basis of Competition zLower Entry Barriers zPromote Litigation or Regulation zAwake Sleeping Giant zReflect Bad Timing zAre Too Advanced

58. Transformational Information Systems zRadical changes in an organization’s business processes zRadical changes in an organization’s structure zRadical changes in an industry’s value streams

59. Business Process Reengineering (BPR) zCompletely changes manner in which business is done zFewer steps, shorter cycle times zComplete, more expert handling of events zNot incremental improvement zTypically uses IT as an enabler zInvolves discontinuous thinking

60. Characteristics of BPR zCombining jobs zEmpowering employees zJobs done simultaneously zCustomizing product/service zWork performed where most logical zSingle point of customer contact

61. Transformational Information Systems zRadical changes in an organization’s structure yreduce layers of management yempower front-line workers yloosely couple work units zRadical changes in an industry’s value streams ydisintermediation ycreating new markets