–Improvement of efficiency to attain higher profitability
–Information systems, technology an important tool in achieving greater efficiency and
productivity
–Walmart’s Retail Link
Operational excellence
System links suppliers to stores for superior replenishment system
Walmart’s Retail Link
___________describes how company
produces, delivers, and sells product or service to create wealth.
Business Models
– Business Model
– Information systems and technology a major enabling tool
•Examples: Apple’s iPad, Google’s Android OS,
and Netflix
New products, services, and business models
–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: JCPenneys
information system which links Sales records to contract manufacturer
Customer and supplier intimacy
– 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
–Example: Verizon’s Web-based digital dashboard to provide managers with real-time data on customer
complaints, network performance, line outages, and so on.
Improved decision making
–Delivering better performance
–Charging less for superior products
–Responding to customers and suppliers in real time
–Examples: Apple, Walmart, UPS
Competitive advantage
–Information technologies as necessity of business
–Industry-level changes
•Example: Citibank’s introduction of ATMs
– Governmental regulations requiring recordkeeping
•Examples: Toxic Substances Control Act, Sarbanes-Oxley Act
Survival
–Set of interrelated components.
–Collect, process, store, and distribute
information
–Support decision making, coordination, and control
Information System
streams of raw facts
Data
data shaped into meaningful form.
Information
Captures raw data from organization or
External environment
Input
Converts raw data into meaningful form
Processing
Transfers processed information to people or activities that use it
Output
Output is returned to the appropriate members of Organization to help evaluate or correct input stage.
Feedback
technical foundation
and tools, similar to the material and tools used to build a house.
Computer and software
Hierarchy of authority
• Senior management
• Middle management
• Operational management
•Knowledge workers
•Data workers
•Production or service workers
– Separation of business functions
–Unique business processes
–Unique business culture
–Organizational politics
Organizational dimension of information
systems
– Managers set organizational strategy for
responding to, business challenges
–In addition, managers must act creatively:
•Creation of new products and services
• Occasionally re-creating the organization
Management dimension of information systems
Separation of business functions
• Sales and marketing
• Human resources
• Finance and accounting
• Manufacturing and production
– Computer hardware and software
–Data management technology
–Networking and telecommunications technology
•Networks, the Internet, intranets and
extranets, World Wide Web
– IT infrastructure
Technology dimension of information systems
provides platform that system
is built on
IT Infrastructure
– Information system is instrument for creating
value
–Investments in information technology will result
in superior returns:
•Productivity increases
•Revenue increases
•Superior long-term strategic positioning
Business perspective on information systems
–Raw data acquired and transformed through stages that add value to that information
–Value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits
Business information value chain
