Seventeenth Edition: Information Systems in Global Business Today

Management Information Systems
(MIS): Managing the Digital Firm

Seventeenth Edition
Chapter 1
Information Systems in Global
Business Today
Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved
Learning Objectives
1 How are information systems transforming business, and why are they
so essential for running and managing a business today?
2 What is an information system? How does it work? What are its
management, organization, and technology components? Why are
complementary assets essential for ensuring that information
systems provide genuine value for organizations?
3 What academic disciplines are used to study information systems, and
how does each contribute to an understanding of information
systems?
The Role of Information Systems
Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved.
How IS Transforming Business?
• Global spending on information technology (IT) and IT
services: nearly $3.8 trillion in 2019; $160 billion spent on
management consulting and services
• Organizational, management, and cultural changes are
often required for firms to derive full business value from IT
investments
Figure 1.1 Information Technology
Capital Investment
What’s New in MIS?
• I T Innovations
– Cloud computing, big data, Internet of Things
– Mobile digital platform
– AI and machine learning
– Use of social networks for business objectives
• New Business Models
– Online streaming and downloadable video
 Examples: Netflix, Apple TV Channels, Amazon
• E-commerce Expansion
– E-commerce worldwide expands to nearly $3.6 trillion in 2019
– Growth in social commerce spurred by growth of mobile platform
– Mobile retail e-commerce growing more than 20 percent a year,
reaching almost $300 billion in 2020
• Management Changes
– Managers becoming more mobile
– Managers use social networks, collaboration tools
– Business intelligence applications accelerate
• Firms and Organizations Change
– More collaborative, less emphasis on hierarchy and
structure
– Greater emphasis on competencies and skills
– Higher-speed/more accurate decision making based on data
and analysis
– More willingness to interact with consumers (social media)
– Better understanding of the importance of I T
Coronavirus Pandemic Impact
• Class Discussion
– What are the management, organization, and
technology issues raised by this problem?
– Identify the information technologies used to provide a
solution to this problem. Was this a successful
solution? Why or why not?
Coronavirus Pandemic Impact
• Class Discussion
– Will working from home become the dominant way of
working in the future? Why or why not?.
Globalization: A Flattened World
• Internet and global communications have greatly changed

how and where business is done
– Drastic reduction of costs of operating and transacting
on global scale
– Competition for jobs, markets, resources, ideas
– Growing interdependence of global economies
– Requires new understandings of skills, markets,
opportunities
The Emerging Digital Firm
• In a fully digital firm:
– Significant business relationships are digitally enabled
and mediated
– Core business processes are accomplished through
digital networks
– Key corporate assets are managed digitally
• Digital firms offer greater flexibility in organization and
management
– Time shifting, space shifting
Strategic Business Objectives of
Information Systems
• Growing interdependence between:
– Ability to use information technology
– Ability to implement corporate strategies and achieve
corporate goals
Figure 1.2 The Interdependence Between
Organizations and Information Systems
Strategic Business Objectives of
Information Systems
• Firms invest heavily in information systems to achieve six
strategic business objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival
Operational Excellence
• Improved efficiency results in higher profits
• Information systems and technologies help improve
efficiency and productivity
• Example: Walmart
– Power of combining information systems and best
business practices to achieve operational efficiency—
and over $524 billion in sales in 2019
– Most efficient retail store in world as result of digital
links between suppliers and stores
New Products, Services, and
Business Models
• Information systems and technologies enable firms to create
new products, services, and business models
• Business model: how a company produces, delivers, and sells
its products and services
• Example: Apple
– Transformed old model of music distribution with iTunes
– Constant innovations—iPod, iPhone, iPad, etc.
Customer and Supplier Intimacy
• Customers who are served well become repeat customers who
purchase more
– Example: Mandarin Oriental Hotel
– Uses I T to foster an intimate relationship with its customers,
keeping track of preferences, etc.
• Close relationships with suppliers result in lower costs
– Examples: Mandarin Oriental Hotel and J C Penney (in text)
– J C Penney uses I T to enhance relationship with supplier in
Hong Kong
Improved Decision Making
• Without accurate information, managers must use
forecasts, best guesses, and luck, resulting in
misallocation of resources, inventory, employees
• Real-time data improves ability of managers to make
decisions
– Example: Verizon’s web-based digital dashboard to
provide managers with real-time data on customer
complaints, network performance, line outages, etc.
Competitive Advantage
• Often results from achieving previous business objectives
• Advantages over competitors
– Charging less for superior products, better performance,
and better response to suppliers and customers
– Examples: Apple, Walmart, UP S are industry leaders
because they know how to use information systems for this
purpose
Survival
• Businesses may need to invest in information systems out
of necessity; it is simply the cost of doing business
• Keeping up with competitors
– Citibank’s introduction of AT Ms
• Federal and state regulations and reporting requirements
– Toxic Substances Control Act and the Sarbanes-Oxley
Act
What is the role of information
systems in the Church?
How can Information Systems
support the gospel mission?
Mathew 28:18-20
Discuss it in a breakout session (5 minutes)
Perspectives on
Information Systems
What Is an Information System?
• Information systems: interrelated components that

manage information (collect, process, store, distribute to:
– Support decision making and control
– Help with analysis, visualization, and product creation
• Information technology: the hardware and software a
business uses to achieve objectives
Data vs Information
• Data: streams of raw facts
• Information: data shaped into meaningful, useful form
Figure 1.3 Data and Information
• Activities in an information system that produce

information:
– Input
– Processing
– Output
– Feedback
• There is sharp distinction between computer or computer
program versus information system
What is an Information System?
• Feedback
– Output is returned to appropriate members of
organization to help evaluate or correct input stage
• Computer/computer program vs. Information Ssystem
– Computers and software are technical foundation and
tools, similar to the material used to build a house
– Information System is about using these tools to
provide solution
Figure 1.4 Functions of an
Information System
Dimensions of Information Systems
• Organizations
• Management
• Technology
Figure 1.5 Information Systems Are

More Than Computers
Organizations Dimension
• Information Systems are integral part of organization
• Key element of organizations
– People
– Structure
– Business Process
– Politics & Culture
Figure 1.6 Levels in a Firm
Management Dimension
• 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
• Information Systems support manager for decision making
Information Technology Dimension
• Computer hardware and software
• Data management technology
• Networking and telecommunications technology
– Networks, the Internet, intranets and extranets, World
Wide Web
• I T infrastructure: provides platform that system is built on
Activity
Think of how Lazada uses information systems to support
these dimensions
• Organization
• Management
• Information Technology
Breakout Session (5 minutes)
A Business Perspective
on Information Systems
• Information system is instrument for creating value
• Investments in information technology should result in
superior returns
– Productivity increases
– Revenue increases
– Superior long-term strategic positioning
• Business information value chain
– 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 perspective
– Calls attention to organizational and managerial nature of
information systems
• Investing in information technology does not guarantee good
returns
• There is considerable variation in the returns firms receive from
systems investments
• Factors
– Adopting the right business model
– Investing in complementary assets (organizational and
management capital)
Figure 1.7 The Business Information
Value Chain
Complementary Assets: Organizational
Capital and the Right Business Model
• Assets required to derive value from a primary investment

• Firms supporting technology investments with investment
in complementary assets receive superior returns
• Example: Invest in technology and the people to make it
work properly
Complementary Assets: Organizational
Capital and the Right Business Model
• Complementary assets
– Examples of organizational assets
 Appropriate business model
 Efficient business processes
– Examples of managerial assets
 Incentives for management innovation
 Teamwork and collaborative work environments
– Examples of social assets
 The Internet and telecommunications infrastructure
 Technology standards
A Christian Perspectives
What is in your hands? (Exodus 4:2)
• How can we look at Information Systems in Christian
perspective?
Contemporary Approaches to
Information Systems
Figure 1.9 Contemporary Approaches
to Information Systems
Technical Approach
• Emphasizes mathematically based models
• Computer science, management science, operations
research
Behavioral Approach
• Behavioral issues (strategic business integration,
implementation, etc.)
• Psychology, economics, sociology
Summary
• Role of Information System
• Business Perspectives of Information Systems
• Approaches of Information Systems
Copyright
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How has information technology transformed business?

What are some of the new information technologies discussed in the text?

Management Information Systems

(MIS): Managing the Digital Firm

• Internet and global communications have greatly changed

Discuss it in a breakout session (5 minutes)

• Information systems: interrelated components that

• Activities in an information system that produce

Figure 1.5 Information Systems Are

• Assets required to derive value from a primary investment

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