MIS Lec#1.ppt
- 2. Information Systems in Global Business Today • Smartphones, texting, e-mail, and online conferencing have all become essential tools of business. One hundred twenty-two million people in the United States access the Internet using mobile devices in 2012, which is half of the total Internet user population. • By June 2012, more than 104 million businesses worldwide had dot-com Internet sites registered. • As newspaper readership continues to decline, more than 150 million people read a newspaper online, and millions more read other news sites.
- 3. • Social networking site Facebook attracted 162 million monthly visitors in 2012 in the United States, and over 900 million worldwide. Google+ has attracted over 100 million users in the United States. • Businesses are starting to use social networking tools to connect their employees, customers, and managers worldwide. • Many Fortune 500 companies now have Facebook pages, and Twitter accounts. • Despite the economic slowdown, e-commerce and Internet advertising continue to expand. • Google’s online ad revenues surpassed $36 billion in 2011, and Internet advertising continues to grow at more than 10 percent a year, reaching more than $39.5 billion in revenues in 2012.
- 4. WHAT’S NEW IN MANAGEMENT INFORMATION SYSTEMS? • New businesses and industries appear, old ones decline, and successful firms are those that learn how to use the new technologies. • Table 1.1 summarizes the major new themes in business uses of information systems. • There are three interrelated changes in the technology area: (1) the emerging mobile digital platform, (2) the growing business use of "big data,“ and (3) the growth in “cloud computing,” where more and more business software runs over the Internet.
- 5. • IPhones, iPads, BlackBerrys, and Android tablets and smartphones are not just gadgets or entertainment outlets. They represent new emerging computing platforms based on an array of new hardware and software technologies.
- 8. • More and more business computing is moving from PCs and desktop machines to these mobile devices. • Managers are increasingly using these devices to coordinate work, communicate with employees, and provide information for decision making. We call these developments the “emerging mobile digital platform.” • Managers routinely use online collaboration and social technologies in order to make better, faster decisions. • The strength of cloud computing and the growth of the mobile digital platform allow organizations to rely more on telework, remote work, and distributed decision making.
- 9. • This same platform means firms can outsource more work, and rely on markets (rather than employees) to build value. • It also means that firms can collaborate with suppliers and customers to create new products, or make existing products more efficiently.
- 11. GLOBALIZATION CHALLENGES AND OPPORTUNITIES • The emergence of the Internet into a full-blown international communications system has drastically reduced the costs of operating and transacting on a global scale. Communication between a factory floor in Shanghai and a distribution center in Rapid Falls, South Dakota, is now instant and virtually free. Customers can now shop in a worldwide marketplace, obtaining price and quality information reliably 24 hours a day. Firms producing goods and services on a global scale achieve extraordinary cost reductions by finding low-cost suppliers and managing production facilities in other countries.
- 12. THE EMERGING DIGITAL FIRM • All of the changes we have just described, coupled with equally significant organizational redesign, have created the conditions for a fully digital firm. • A digital firm is one in which nearly all of the organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated. • Core business processes are accomplished through digital networks spanning the entire organization or linking multiple organizations.
- 13. • Business processes refer to the set of logically related tasks and behaviors that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated. • Developing a new product, generating and fulfilling an order, creating a marketing plan, and hiring an employee are examples of business processes, and the ways organizations accomplish their business processes can be a source of competitive strength. • Key corporate assets—intellectual property, core competencies, and financial and human assets—are managed through digital means. • In a digital firm, any piece of information required to support key business decisions is available at any time and anywhere in the firm.
- 14. • Digital firms sense and respond to their environments far more rapidly than traditional firms, giving them more flexibility to survive in turbulent times. • Digital firms offer extraordinary opportunities for more flexible global organization and management. In digital firms, both time shifting and space shifting are the norm. • Time shifting refers to business being conducted continuously, 24/7, rather than in narrow “work day” time bands of 9 a.m. to 5 p.m. • Space shifting means that work takes place in a global workshop, as well as within national boundaries. Work is accomplished physically wherever in the world it is best accomplished.
- 15. • Many firms, such as Cisco Systems, 3M, and IBM, are close to becoming digital firms, using the Internet to drive every aspect of their business. Most other companies are not fully digital, but they are moving toward close digital integration with suppliers, customers, and employees. Many firms, for example, are replacing traditional face-to-face meetings with “virtual” meetings using videoconferencing and Web conferencing technology. • Today’s service industries— finance, insurance, and real estate, as well as personal services such as travel, medicine, and education—could not operate without information systems. Similarly, retail firms such as Walmart and Sears and manufacturing firms such as General Motors and General Electric require information systems to survive and prosper. Just as offices, telephones, filing cabinets, and efficient tall buildings with elevators were once the foundations of business in the twentieth century, information technology is a foundation for business in the twenty-first century.
- 16. • What a business would like to do in five years often depends on what its systems will be able to do. Increasing market share, becoming the high-quality or low-cost producer, developing new products, and increasing employee productivity depend more and more on the kinds and quality of information systems in the organization.
- 18. Operational Excellence • Businesses continuously seek to improve the efficiency of their operations in order to achieve higher profitability. Information systems and technologies are some of the most important tools available to managers for achieving higher levels of efficiency and productivity in business operations, especially when coupled with changes in business practices and management behavior. Walmart, the largest retailer on earth, exemplifies the power of information systems coupled with brilliant business practices and supportive management to achieve world-class operational efficiency. In fiscal year 2012, Walmart achieved $460 billion in sales—nearly one-tenth of retail sales in the United States—in large part because of its Retail Link system, which digitally links its suppliers to every one of Walmart’s stores. As soon as a customer purchases an item, the supplier monitoring the item knows to ship a replacement to the shelf. Walmart is the most efficient retail store in the industry, achieving sales of more than $28 per square foot, compared to its closest competitor, Target, at $23 a square foot. Other retail firms producing less than $12 a square foot.
- 19. Customer and Supplier Intimacy • When a business really knows its customers, and serves them well, the customers generally respond by returning and purchasing more. This raises revenues and profits. Likewise with suppliers: the more a business engages its suppliers, the better the suppliers can provide vital inputs. This lowers costs. How to really know your customers, or suppliers, is a central problem for businesses with millions of offline and online customers.
- 20. • The Mandarin Oriental in Manhattan and other high-end hotels exemplify the use of information systems and technologies to achieve customer relationship. These hotels use computers to keep track of guests’ preferences, such as their preferred room temperature, check-in time, frequently dialed telephone numbers, and television programs, and store these data in a large data repository. Individual rooms in the hotels are networked to a central network server computer so that they can be remotely monitored or controlled. When a customer arrives at one of these hotels, the system automatically changes the room conditions, such as dimming the lights, setting the room temperature, or selecting appropriate music, based on the customer’s digital profile. The hotels also analyze their customer data to identify their best customers and to develop individualized marketing campaigns based on customers’ preferences.
- 21. • JCPenney exemplifies the benefits of information systems- enabled supplier intimacy. Every time a dress shirt is bought at a JCPenney store in the United States, the record of the sale appears immediately on computers in Hong Kong at the TAL Apparel Ltd. supplier, a contract manufacturer that produces one in eight dress shirts sold in the United States. TAL runs the numbers through a computer model it developed and then decides how many replacement shirts to make, and in what styles, colors, and sizes. TAL then sends the shirts to each JCPenney store, bypassing completely the retailer’s warehouses. In other words, JCPenney’s shirt inventory is near zero, as is the cost of storing it.
- 22. Improved Decision Making • Many business managers operate in an information fog bank, never really having the right information at the right time to make an informed decision. Instead, managers rely on forecasts, best guesses, and luck. The result is over or underproduction of goods and services, misallocation of resources, and poor response times. These poor outcomes raise costs and lose customers. In the past decade, information systems and technologies have made it possible for managers to use real-time data from the marketplace when making decisions. For instance, Verizon Corporation, one of the largest telecommunication companies in the United States, uses a Web- based digital dashboard to provide managers with precise real- time information on customer complaints, network performance for each locality served, and line outages or storm-damaged lines. Using this information, managers can immediately allocate repair resources to affected areas, inform consumers of repair efforts, and restore service fast.
- 23. Competitive Advantage • When firms achieve one or more of these business objectives— operational excellence; new products, services, and business models; customer/supplier intimacy; and improved decision making—chances are they have already achieved a competitive advantage. Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales and higher profits that your competitors cannot match.
- 24. Survival • Business firms also invest in information systems and technologies because they are necessities of doing business. Sometimes these “necessities” are driven by industry-level changes. For instance, after Citibank introduced the first automated teller machines (ATMs) in the New York region in 1977 to attract customers through higher service levels, its competitors rushed to provide ATMs to their customers to keep up with Citibank. Today, virtually all banks in the United States have regional ATMs and link to national and international ATM networks, such as CIRRUS. Providing ATM services to retail banking customers is simply a requirement of being in and surviving in the retail banking business.
- 25. WHAT IS AN INFORMATION SYSTEM? • An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization.