2. The iPhone is not a game changer, it’s an
industry changer.”
2007…..
• PC market
• Telecom companies
• Movie and TV business
• Gaming industry
SDKs: Software Development Kits
3. Firms invest heavily in information
systems to achieve six strategic business
objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier relationships
4. Improved decision making
5. Competitive advantage
6. Survival
4. Operational excellence
• Improvement of efficiency to attain higher
profitability
• Information systems, technology an important
tool in achieving greater efficiency and
productivity
• Walmart’s Retail Link system links suppliers to
stores for superior replenishment system.
Approx: $610 per square foot. Costco $1900
5. New products, services, and business models
• Business model: how company produces,
delivers, and sells product or service to create
wealth
• Information systems and technology: a major
enabling tool for new products, services,
business models
–Examples: Apple’s iPad/iPod/iPhone: music
industry, Netflix, Amazon, Google, Facebook
6. Customer and supplier relationships
• Serving customers well leads to customers
returning, which raises revenues and profits.
– Example: High-end hotels that use computers to
track customer preferences and used to monitor
and customize environment
• Intimacy with suppliers allows them to provide
vital inputs, which lowers costs.
– Example: JCPenney’s information system which
links sales records to contract manufacturer
7. Improved decision making
• Managers’ information Fog banks
• Without accurate information:
– Managers must use forecasts, best guesses, luck
– Results in:
• Overproduction, underproduction
• Misallocation of resources
• Poor response times
– Poor outcomes raise costs, lose customers
• Gathering, analyzing, and interpreting data for informed
business decisions.
• Example: Verizon’s Web-based digital dashboard to
provide managers with real-time data on customer
complaints, network performance, line outages etc.
8. Competitive advantage
• Delivering better performance
• Charging less for superior products
• Responding to customers and suppliers
in real time
• Examples: Online banking, Apple,
Walmart, FoodPanda, Amazon, Uber,
inDrive etc.
9. Survival
• Information technologies as necessity of
business
• Industry-level changes
–Example: Introduction of ATMs
• Governmental regulations requiring record-
keeping for transparency and reporting
–Examples: Toxic Substances Control Act,
Sarbanes-Oxley Act, retain all records for 30
years
11. Functions of an Information System
• An information system
contains information about
an organization and its
surrounding environment.
Three basic activities—input,
processing, and output—
produce the information
organizations need.
Feedback is output returned
to appropriate people or
activities in the organization
to evaluate and refine the
input. Environmental actors,
such as customers, suppliers,
competitors, stockholders,
and regulatory agencies,
interact with the
organization and its
information systems.
12. Business processes
• Collection of activities required to produce a
product or service.
• Performance of a business firm depends on
how well its business processes are designed
and coordinated.
13. Information Technology Capital Investment
Information technology capital investment, defined as hardware, software,
and communications equipment.
15. Technology Excesses?
• You can buy a new model item when it is released
or wait for the price to drop.
• You can keep buying new releases or continue to
use an “old” model.
• Answers depend on your needs, the features
offered, and the reliability of the old items.
• Plus the bling factor.
16. Investing in Information Technology
• Investing in information technology does not
guarantee good returns.
• There is considerable variation in the returns firms
receive from systems investments.
• Factors:
– Adopting the right business model
– Investing in complementary assets (automobile
companies rely on investments in highways, roads, gas
stations, repair facilities etc, to maximize the value of
their primary investment)
17. Recent Trends: Hardware
• Faster, Cheaper, Mobile
• Computers have become smaller and faster
• Hardware prices have dropped
• High growth in small, mobile devices for
communications and access to the Internet
18. Recent Trends: Software (Integrated,
Downloadable, Social)
• Integrated:
– Many “standards” are just de facto standards (Microsoft Windows,
Office, Internet Explorer, google, Chatgpt)
– Many companies have benefitted from “Enterprise Systems”
investments (e.g., electronic health records in hospitals)
• Downloadable:
– Software programs for smart phones downloadable from App stores
– Download speeds have increased so that even large files can be
downloaded by users
• Social:
– Growth of applications (such as Facebook, LinkedIn, twitter)
– Used by companies for marketing and branding activities
– Collaboration tools connect employees across distance
19. Recent Trends: Networks
• High demand for high speed Internet access
• Wireless technologies to replace hardwired
lines; support for mobile devices
anytime/anywhere
• Virtualization, cloud computing and the
internet of things (IoT)
20. Trends making Information Systems
important in business
• The capacity of data storage devices has grown
while their prices have decreased
• The variety and ingenuity of software applications
have increased
• “Bring your technology with you” cloud computing
• Convergence of technology innovations like smart
phones, mobile applications, organizational
systems, and cloud storage systems
• Increasing proportion of the global workforce is
computer literate
