Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Chapter 1

Managing the Digital Firm

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Objectives

1. What is the role of information systems in todays competitive business environment? 2. What exactly is an information system? What do managers need to know about information systems?

3. How are information systems transforming organizations and management?

1.2 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Objectives

4. How have the Internet and Internet technology transformed business and government? 5. What are the major management challenges to building and using information systems?

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Management Challenges

1. Design competitive and effective systems. 2. Understand system requirements of global business environment. 3. Create information architecture that supports organizations goal.

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Management Challenges

4. Determine business value of information systems. 5. Design systems people can control, understand and use in a socially, ethically responsible manner.

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

The Competitive Business Environment and the Emerging Digital Firm

Four powerful worldwide changes that have altered the business environment: 1. 2. 3. 4.
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Globalization Rise of the Information Economy Transformation of the Business Enterprise Emergence of the Digital Firm
2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

The Competitive Business Environment and the Emerging Digital Firm

Globalization
Management and control in a global marketplace Competition in world markets Global workgroups Global delivery systems

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

The Competitive Business Environment and the Emerging Digital Firm

Rise of the Information Economy

Knowledge- and information-based economies New products and services Knowledge: a central productive and strategic asset Time-based competition Shorter product life Turbulent environment Limited employee knowledge base

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

The growth of the information economy

Figure 1-1
1.9 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

The Competitive Business Environment and the Emerging Digital Firm

Transformation of the Business Enterprise

Flattening Decentralization Flexibility Location independence Low transaction and coordination costs Empowerment Collaborative work and teamwork

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

Information technology capital investment 1980-2003

Figure 1-2
1.11 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

The Competitive Business Environment and the Emerging Digital Firm

Emergence of the Digital Firm

Digitally enabled relationships with customers, suppliers, and employees Core business processes accomplished via networks Digital management of key corporate assets Rapid sensing and responding to environmental changes

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

What Is an Information System?

A set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

What Is an Information System?

Data: Streams of raw facts representing

events such as business transactions

Information: Clusters of data that are

meaningful and useful to human beings

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

Data and information

Figure 1-3
1.15 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

Functions of an information system

Figure 1-4
1.16 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

What Is an Information System?

Formal Systems
Fixed definitions of data and procedures for collecting, storing, processing, disseminating, and using these data Can be computer-based or manual

Computer-based Information Systems

Use computer hardware and software to process and disseminate information

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

Information systems are more than computers

Figure 1-6
1.18 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

A Business Perspective on Information Systems

Information systems literacy: Broad-based

understanding of information systems that includes behavioral knowledge about organizations and individuals using information systems and technical knowledge about computers

Computer literacy: Knowledge about

information technology, focusing on understanding how computer-based technologies work

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

A Business Perspective on Information Systems

Major Business Functions

Sales and marketing Manufacturing Finance Accounting Human resources

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

A Business Perspective on Information Systems

Key Elements of an Organization

People Structure Operating Procedures Politics Culture

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

A Business Perspective on Information Systems

Management Levels
Senior managers: make long-range strategic decisions about products and services Middle managers: carry out the programs and plans of senior management Operational managers: monitor the firms daily activities

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Why Information Systems?

A Business Perspective on Information Systems

Information Technology (IT) Infrastructure

Computer hardware Computer software Storage technology Communications technology

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Contemporary Approaches to Information Systems

Contemporary approaches to information systems

Figure 1-8
1.24 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Contemporary Approaches to Information Systems

Sociotechnical Systems
Management Information Systems (MIS) System performance optimized when technology and organization adjust to each other for a satisfactory fit

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Contemporary Approaches to Information Systems

A sociotechnical perspective on information systems

Figure 1-9
1.26 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

The interdependence between organizations and information systems

Figure 1-10
1.27 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

The Widening Scope of Information Systems

1950s: Technical changes

1960s-70s: Managerial controls 1980s-90s: Institutional core activities Today: Digital information webs extending beyond the enterprise

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

The widening scope of information systems

Figure 1-11
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Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

The Network Revolution and the Internet

The Internet
International network of networks Universal technology platform: Any computer can communicate with any other computer World Wide Web and Web sites

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

The Network Revolution and the Internet

What You Can Do on the Internet

Communicate and collaborate Access information Participate in discussions Supply information Find entertainment Exchange business transactions

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

New Options for Organizational Design: The Digital Firm and the Collaborative Enterprise

Flattening organizations
Separating work from location Reorganizing workflows Increasing flexibility Redefining organizational boundaries

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

Flattening organizations

Figure 1-12
1.33 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

Redesigned workflow for insurance underwriting

Figure 1-13
1.34 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

The Digital Firm

Electronic commerce Electronic business Digital market: Information system that links buyers and sellers to exchange information, products, services, payments

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

Electronic business and electronic commerce in the emerging digital firm

Figure 1-14
1.36 2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Toward the Digital Firm

The Digital Firm

Electronic Commerce (e-commerce): buying and selling goods and services electronically
Electronic Business: executing all the firms business processes with Internet technology Intranet: private, secure business network based on Internet technology

Extranet: extension of intranet to authorized external users

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Learning to Use Information Systems

The Challenges of Information Systems: Key Management issues

Positive Impacts of Information Systems

Faster calculations and paperwork Analysis of customer purchase patterns and preferences More efficient business services Medical advances Instant global distribution of information

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2005 by Prentice Hall

Essentials of Management Information Systems, 6e

Chapter 1 Managing the Digital Firm

Learning to Use Information Systems

The Challenges of Information Systems: Key Management issues

Negative Impacts of Information Systems

Automation leading to job elimination Privacy concerns System outages and shutdowns Health problems, repetitive stress injury Illegal distribution of intellectual property

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2005 by Prentice Hall