information system in global business toaday.pptx

Chapter 1
Information system in global business
today

Basic concept of MIS
• Management
Can be defined as achieving goals in a way
that makes the best use of all the available
resources
Can be defined as a function or process and is
the art of planning, staffing, coordinating and
controlling

• Information
Information is the processed data or
Information may be considered as data that
has been organized and processed
Information increases understanding and
helps people in taking intelligent decision
To make a useful decision, information must
be delivered to the right person, at the right
time, in the right place

Characteristics of Information
• Good information is that which is used and
creates value
• The characteristics of good information are:
1. Accuracy
2. Complete
3. Timeliness
4. Relevant
5. Consistent
6. Reliability

Contd.
1. Accuracy
 Accuracy of an information depends upon
the truthfulness with which data is collected
from either primary or secondary sources
 Decisions are incorrect and may have disaster
if inaccurate information is obtained.

Contd.
2. Complete
Information is considered as complete if it tells
its user all what he/she wishes to know about
a particular situation/problem
The decision maker needs complete
information for solving problems without any
manipulation

contd
3. Timeliness
Information should be available when needed
i.e. right information to right person at the
right time
Delayed information loose its importance

Contd.
4. Relevance
Available information needs to be updated all
the time so that it could match its current
utility
5. Reliability
Information should be reliable and external
force relied upon indication.

Contd.
6. Consistent
All the information should be consistent and
should be based on same assumption, time
period and other factors.

Process of converting data into information
Data collection-cleaning-classification-sorting-
processing-storing-retrieval -dissemination
1. Collection:- Survey, interview, newspaper etc.
2. Cleaning:- reduce noise and redundancy
3. Sorting, adding, merging
4. Summarization and Report generation

System
Can be defined as a group of interrelated
components working together toward a
common goal by accepting input and
producing output
Each individual components of a system has
its own goal but together these parts works in
harmony so that the goal and the common
goal of the system are harmonize.

Contd.
 A system has three basic interacting
components or functions:
 Input
Processing
Output

Management Information System
 Can be defined as a system that provides
information to support managerial functions
like planning, organizing, controlling and
coordinating
MIS includes files, hardware, software, models
of processing, storing, retrieving and
transmitting information to the users.

Information Technology
 It is the technology which supports activities
involving the creation, storage, manipulation
and communication of information together
with their related methods and application
It includes tools and techniques that supports
the design and development of information
system i.e. hardware, software,
communication network etc.

Basic strategy of IT in the business use
1. Lower cost
 Use IT to reduce the cost of business process
2. Innovate
 Create new products and services that
include IT components
 Make radical changes to business process
with IT that dramatically reduce cost,
improve quality

Contd.
3. Promote Growth
Use IT to manage regional and global business
expansion
Use IT to diversify and integrate into other
products and services

Conts.
4. Develop Alliance
Develop enterprises information systems
linked by the internet and extranet that
support strategic business relationship with
customers, suppliers and others.

Information System
Information system can be defined technically
as a set of interrelated components that collect
, processes, stores and distribute information
to support decision making and control in an
organization.
IS contains information about significant
people , place and things within the
organization or in the environment
surrounding

Components of IS
Basically IS has five resources:
a) People: people are the users who uses the
system. Normally there are two types of
people resources:
 end-user: who uses IS
 IS specialist: system analyst, system
developers, system operators

IS components contd….
b) Hardware resources: includes all physical
devices that helps to process and store the
required information. E.g. harddisk, computer
c) Software resources: It is simply a collection of
programs, files and all set of information
processing instruction which control the
hardware components.eg. Application
software, system software

IS components contd…
d) Data resources: Data are the raw fact and
figures which can have different forms like
alphanumeric, image data etc. Data in the
system might be product, descriptions,
customer records, employee files etc.
e) Network: It is a path through which signal
travels from one machine to another. Normally
it consists of communication media,
communication processor and control S/W.

IS contd….
Information system can be of formal or informal.
Formal systems are designed and developed
using a set of well-established organizational
policies, procedure and principles to co-ordinate
and facilitate communication between different
functional unit
Informal system, on the other hand do not follow
any formal or pre-established rules for collecting,
processing, storing and distributing data.

Information Technology (IT)
IT consists of all the H/W and S/W that a firm needs
to use in order to achieve its business objectives.
Information technologies are tools and techniques
that support the design and development of IS.
IT is one of many tools that managers use to cope
with change. Eg. H/W,S/W,data management
technology, networking and telecom technology,
WWW.

IT and IS
Information systems and information
technologies are interrelated
If any of them is not handled properly,
organizations will not be taking any business
advantages.

Computer literacy
Computer literacy is the knowledge of how a
computer and its component work.
To use the IS users need to be computer
literate
Users should know about the operations of
computers such as inputting, processing,
storing, outputting and controlling.

Information literacy
It is the ability to create and use IS to achieve
the competitive advantage
It includes computer literacy, business insights
and understanding of the organization,
management, IT and problem solving
technique.

Data and Information
Data are the raw fact and figures from which
we start to get information
Information is the processed data

Management Information System
MIS is defined as system that provides
information to support managerial functions
like planning, organizing, directing, controlling,
coordinating and staffing information in a
systematic and a routine manner.
The primary goal of MIS is to support
organizational decision making.

Objectives of MIS
Facilitate decision making process by
furnishing information in proper timeframe.
Helps in highlighting critical factors
Core competencies
Helps to create the paperless industry
Increase productivity and efficiency
Enhance supply chain management

1.1 The role of Information System
in business today
 IS and IT have revolutionized firm and
industries.
 Information systems are transferming business
and the visible result of this include the
massive use of cell phone and wireless
communication devices
 Internet has drastically reduced the cost of
business operating on a global scale

The role of Information System in
business today Contd….
 Business responses to changes in their
environment are enhanced through digital
communications, allows for time shifting
( business being conducted 24 hrs * 7 days)
and space shifting (business being conducted
globally or beyond traditional geographic
boundries).
 Cloud computing, Mobile digital platform
allow more distributed work, decision making
and collaboration

 Now a days web 2.0 applications are widely
adopted by organization
 There is a growing interdependence between
a firm’s IS and its business capabilities
 Business firms invest heavily in IS to achieve
six strategic business objectives:

 Operational excellence
 New products and services
 Customer and supplier intimacy
 Improved decision making
 Competitive advantage
 Survival

 Operational excellence :
. Businesses can constantly improve their
efficiency of their operations in order to
achieve higher profitability
. They can do this by constantly having the
correct amount of stock in store so consumers
can always get want they want.

 New product and services
. IS play a major role for businesses in creating
new products and services.
. New business models can be created and these
can describe how a company produce, create
and sell their products.

. The better services a company provides its
consumers with more likely they are too come
back to them and as result the more they will
buy and the supplier therefore can supply raw
materials in time at lower cost.

. I.S systems make managers to use real time
data when making a decision , therefore make
better decisions and not have to waste time
looking for information.

. If companies use I.S. effectively they will
generally create a competitive advantage over
their rivals.
 Survival
. Business invest in IS to make their jobs as easy
as possibly and nowadays businesses should
invest in IS to survive in competitive business
market. E.g. Introduction of ATM

1.2 Contemporary approaches to IS
 The study of IS is a multidisciplinary field.
 No single theory or perspective dominates
 In general, the study of IS deals with issues
and insights contributed from technical and
behavioral disciplines.
a) Technical Approach
b) Behavioral Approach

contd….
a) Technical Approach:
 The technical approach to IS emphasizes
mathematically based model to study IS as
well as the physical technology and formal
capabilities of these systems.
 The discipline that contribute to the technical
approach are computer science,
management science and operations
research.

contd…..
b) Behavioral Approach
 An important part of the information system
field is concerned with behavioral issues that
arise in the development and long term
maintenance of IS.
 It concentrate on changes in attitudes,
management and organizational policy,
behavioral and developing system solutions to
real world problem.

Fig: contemporary approaches to IS
MIS
Mgmt.
science
Computer
science
Operations
research
Sociology
Economics
psychology
Technical
approach
Behavioral
approach

contd…
Four main actors
 Suppliers of hardware and software
 Business firm
 Managers and employees
 Firm’s environment (legal, social, cultural)

1.3 Global opportunities and
challenges in a flattened world
• Customer no longer need to present in local
business for product and services
• They can shop 24/7 for virtually anything
• Business firm can operate 24/7 from any
location around the world
• Employees must continually develop high level
skills through education and experience
• Internet has reduced cost of operating and
transaction on a global scale

1.4 The emerging Digital firm
• A digital firm is one in which nearly all of the
organization significant business relationship
with customer, supplier and employees are
digitally mediated and digitally enabled
• Core business processes are accomplished
through digital network spanning the entire
organization or linking multiple organization

1.4 The emerging Digital firm
contd…
• Digital firm is a digitally enabled environment
for the interaction and processing of
information among customers, employees and
stakeholders.
• Key corporate assets- intellectual property,
core competencies and financial and human
assets are managed through digital means
• Digital firm offer extra ordinary opportunities
for more flexible global orgn and mgmt

• In digital firm both time shifting and space
shifting are the basic norms

1.4.1 Strategic business objective
of IS
 Operational excellence
 New products and services
 Survival
Discussed in 1.1

1.4.2 Information System
 Definition…
 Dimension of Information System
• To understand IS, we must understand the
organization, management and technology
dimension of a system and their power to
provide solution to challenges and problem in
the business environment.

• The dimensions of IS are:
Organization( structure, culture)
Management(challenges, strategy, innovation)
Technology
1.4.2 Information System contd..

1. Organization
 Information systems are integral part of
organization
 The key elements of an organization are its
people, business process, politics and culture
 Organization have a structure that is
composed of different levels and specialist
1.4.2 Information System contd…

The structure define a clear vision of labor
Authority and responsibility in a business firms
are organized as a hierarchy
Senior mgmt makes long terms strategy about
product or services
Middle mgmt carries out the program and
plan of senior mgmt
Operational mgmt is responsible for
monitoring the dially activities of the business

2. Management
 Managers set organizational strategy for
responding to business challenges
 In addition, managers must act creativity:
creation of new products and services and
occasionally re-creating the organization
 Managers make decision and formulate action
plans to solve organizational problem

• They set the organizational strategies for
responding to those challenges and they
allocate the human and financial resources to
coordinate the work and achieve success.

3. Technology dimension of IS
 IT is one of many tools manager use to cope
with change
 The components used in IT are:
Computer hardware
Computer software
Data management technology
Network and telecom technology
IT infrastructure

1.5 Business perspective of IS
• Managers and business firm invest heavily in
IT and IS because they provide real economic
value to the business
• From a business point perspective, an IS is an
important instrument for creating values for
the firm
• Investments in IT will result in superior returns
like productivity increases, revenue increases,
superior long-term strategic positioning

• From a business perspective, information
systems are part of a series of value-adding
activities for acquiring, transforming and
distributing information that managers can
use to improve decision making, enhance
organizational performance and ultimately
increases firm profitability, which is known as
business information value chain.

contd…
• An IS represents an organizational and
management solution based on IT to a
challenge or problem faced by environment.
• Some firms achieve better results than others
• Studies of returns from IT investments show
that there is considerable variation in the
returns firm receive

• Reasons for lower return on investment
include failure to adopt the right business
model that fit the new technology or seeking
to preserve on old business model
• IT investment can not make organizations and
managers more effective unless they are
accompained by complementary assets: assets
required to derive value from a primary
invesment.

• Complementary assets include:
I. Organizational assets: these include a
supportive business culture that values
efficiency and effectiveness, an appropriate
business model, efficient business process,
decentralization of authority and a strong IS
development team.
II. Managerial assets: these include strong
senior management support for change,

, incentive systems that monitor and reward
individual innovation, focus on teamwork and
collaboration, training program and a
management culture that values flexibility and
knowledge.
III. Social assets: these are not made by the firm
but the society, other firms, governments and
other key market actors such as internet,
network etc.

What is new in MIS?
• Web 2.0 applications
• Cloud computing
• SaaS (Software as a service

information system in global business toaday.pptx

More Related Content

Similar to information system in global business toaday.pptx (20)

Recently uploaded (20)

information system in global business toaday.pptx