Itm day2

Information Technology for Management - An Introduction

Decision Making and Managerial Effectiveness Decision Making is the prime responsibility Effectiveness Depends upon awareness of Internal and External Environment Pervasiveness of Information Changing Decision Making Scenario

Declining margins Rapid change in Technology Increased Knowledge Intensity Scattered Resources Demanding Customer Higher Scale of Operation Changing Decision Making Scenario

Large amount of Capital expenditure Foundation of doing business Impacts Productivity Offers Strategic opportunity and advantage There are four reasons why IT makes a difference to the success of a business: Why Information Systems Matter

Besides Manufacturing Plant and Machinery, IT is the largest single component of capital investment in most of the companies About $1.8 trillion is spent each year by American businesses. India is also catching up with the global trend Managers and business students need to know how to invest this capital wisely The success of the business in the future may well depend on how IT investment decisions are made WHY INFORMATION SYSTEMS? Capital Management

Most businesses today could not operate without extensive use of information systems and technologies IT can increase market share (Think, how?) IT can help a business become a high-quality, low-cost producer IT is vital to the development of new products WHY INFORMATION SYSTEMS? Foundation of doing business

IT is one of the most important tools managers have to increase productivity and efficiency of businesses According to the Federal Reserve Bank, IT has reduced the rate of inflation by 0.5 to 1% in the last decade. For firms this means IT is a major factor in reducing costs It is estimated that IT has increased productivity in the economy by about 1% in the last decade. For firms this means IT is a major source of labor and capital efficiency WHY INFORMATION SYSTEMS Productivity

Create competitive advantage: IT makes it possible to develop competitive advantages New Business Models : Dell Computer has built its competitive advantage on an IT-enabled customer –segment-focused business model that other firms have not been able to imitate Tata Motors has been able to reduce the cost of input by creating more competitive environment in procurement online Mazda has been able to build its competitive advantage by customisation of vehicles WHY INFORMATION SYSTEMS Strategic Opportunity and Advantage

Create new services : eBay has developed the largest auction trading platform for millions of individuals and businesses. Competitors have not been able to imitate its success Differentiate yourself from your competitors: Amazon has become the largest book retailer in the U.S. on the strength of its huge online inventory and recommender system. Competitors have not been able to imitate its success Strategic Opportunity and Advantage:

Commoditization of technology is typically a spur to innovation and new business models, products and services Competitive advantage derives not from the technology, but on how businesses use the technology Innovations in business processes, management and organization are not easily copied from one firm to another How Much Does IT Matter ?

Internet growth and technology convergence Transformation of the business enterprise (Flat organizations) Growth of a globally connected economy (integration of markets) Growth of knowledge and information-based economies(IT enabled services) Emergence of the digital firm Why IT Now? Digital Convergence and the Changing Business Environment Growing impact of IT in business firms can be assessed from the following five factors:

Growth of the Internet: 120 million on line in the U.S., 1500 million global users The Internet is bringing about a convergence of telecommunications and computing: VOIP telephones. Growth in e-business, e-commerce, and e-government Internet is bringing about rapid changes in markets and market structure: financial services and banking The Internet is making many traditional business models obsolete: the corner music store and video store Internet growth and technology convergence

Flattening Decentralization Flexibility Transformation of the Business Enterprise :

Knowledge and information-based economies New products and services Knowledge as a central productive and strategic asset Rise of the Information Economy :

Time-based competition Shorter product life Turbulent environment Limited employee knowledge base Rise of the Information Economy :

Digitally enabled relationships with customers, suppliers, and employees Core business processes accomplished using digital networks Digital management of key corporate assets Emergence of the Digital Firm:

Data, Information & Knowledge One of the primary goals of Information Systems is to economically process data into information or knowledge. Data items refer to an elementary description of things, events, activities, and transactions that are recorded, classified, and stored, but not organized to convey any specific meaning. Information is data that have been organized so that they have meaning and value to the recipient. Knowledge consists of data or information that have been organized and processed to convey understanding, experience, accumulated learning, and expertise.

Hierarchy of Information 3 rd Generation (2003) _____________________________________________________________________________________________________ 2 nd Generation (1996-2002 ) _____________________________________________________________________________________________________ 1 st Generation (1990s ) Charts Intelligence Knowledge Information Data Data & Information

Information as a Corporate Resource Value Added Resource Has a Specific Cost Value Depends on purpose of use and degree of Utilisation High Rate of Obsolescence Requires Pruning to avoid congestion Quality of Information Accuracy, Promptness, Precision Completeness, Un-ambiguity

Process of Generation of Information Data Acquisition Data capture Data organisation and storage Data Pruning Data Transformation Rearranging (Sorting) Classifying Calculating and statistical analysis Summarising Info Management Communicating Reporting Data Visualisation

Information Needs of Business Operational Information Useful in exercising control Pertains to activities that are measurable Sources of data are internal Predictive element is low and has short term horizon Tactical Information Useful in allocation of resources Pertains to activities meant for implementation of top level plans Sources of data are partly internal and partly external Predictive element is focused on short term trends

Strategic Information Useful in making strategic choices Pertains to defining goals, priorities, policies for acquisition of corporate resources Sources of data is mainly external Predictive element is very high Focused on long term horizon and trends

USING INFO SYSTEMS AS A STRATEGIC TOOL

Levels of Management and Type of Information Lower Middle Top Strategic Tactical Operational

Defining Business Information System Information : Understanding that one derives from facts about a subject, with a view to reduce uncertainty regarding elements of an environment System : Set of inter-related elements, designed to achieve pre-determined objectives An Information system is a set of interrelated elements that acquire, process, store and disseminate information to support decision making, automating coordinating, control, analysis of business processes

Itm day2

More Related Content

What's hot (20)

Viewers also liked (7)

Similar to Itm day2 (20)

Recently uploaded (20)

Itm day2