1. Management of Information Technology
Introductory Comments

2. Elements for Study of Information Systems
Text’s Three Themes
Enterprise Systems
E-Business
Information Technology
Three Roles
Systems User
Systems Evaluator
Systems Designer

3. Input-Process-Output Model for Info systems and Business Processes

4. Systems, Components, and Hiding Complexity
Note that the diagram omits that System 1.2 consumes inputs A & E and produces outputs C & B. Data flow diagram leveling (Ch 2) makes these relationships clearer.

5. A Hierarchy of Information Qualities

6. How does organizational strategy determine information systems structure?
An organization’s goals and objectives are determined by its competitive strategy.
In turn, an organization’s competitive strategy determines every information system’s
Structures
Features
Functions
Organizational Strategy Determines Information Systems

7. What Five Forces Determine Industry Structure?
Porter’s Five Forces Model of Industry Structure

8. What Five Forces Determine Industry Structure?

9. What is Competitive Strategy
Porter’s Four Competitive Strategies

10. What is a Value Chain?
Each competitive strategy requires a system whose benefits outweigh the risks and provide value to the customer.
Value is defined as the amount of money a customer is willing to spend on a product, service, or resource.
The difference between the value that an activity generates and the cost of the activity is the margin.
A value chain is a network of value-creating activities and is divided into primary activities and support activities.

11. What is a Value Chain?
Porter’s Value Chain Model

12. Primary Activities in the value chain include:
What is a Value Chain?
Primary Activities in the value chain include:
Inbound logistics activities involve receiving and managing raw materials.
Operations activities transform raw materials into final products or create services.
Outbound logistic activities deliver finished products to customers.
Marketing and Sales activities create marketing strategies and sell products or services to customers.
Services activities provide after-sale customer support for products or services.

13. What is a Value Chain?
Support Activities in the value chain indirectly enhance production of products and services.
Firm infrastructure includes general management, finance, accounting, legal, and government affairs (if necessary).
Human Resources recruits, compensates, evaluates and trains employees.
Technology Development includes research and development for new processes or techniques.
Procurement finds suppliers and vendors for raw materials, creates contracts, and negotiates prices of raw materials.

14. How Do Business Processes Generate Value?
A Sample Business Process

15. How Do Business Processes Generate Value?
Improved Business Process

16. How Does Competitive Strategy Determine Business Processes and Structure of Information Systems?
Each business must first analyze its industry and choose a competitive strategy. Will it be a low-cost provider or differentiate its products from competitors?
Then it must design its business processes to span value-generating activities.
Once those decisions have been made, a business can structure an information system that supports its business processes.

17. How Do Information Systems Provide Competitive Advantages?
There are two ways businesses can respond to the five competitive forces.
They can gain a competitive advantage via their products and services.
They can gain a competitive advantage by developing superior business processes.

18. How Do Information Systems Provide Competitive Advantages?
A business can gain a competitive advantage via its products by
Creating new products and services, or
Enhancing its existing products or services, or
Differentiating its products and services from its competitors
Information systems can help create a competitive advantage by being part of the product or by providing support to the product.

19. How Do Information Systems Provide Competitive Advantages?
A company can gain a competitive advantage by using business processes to
Lock in customers via high switching costs, making it too expensive for the customer to switch to a competitor.
Lock in suppliers via easy-to-use connections, discouraging them from changing to another business.
Create entry barriers for new competitors, thereby raising the costs to enter the market.
Establish alliances with other organizations and set standards, reducing purchase costs and providing benefits for everyone.
Reduce costs which in turn reduces prices and increases profitability.

20. Summary: Why information systems are developed
Information Systems are the means for executing business processes, activating the value chain, and achieving the business’s strategy