02 IS in Global Business
02 IS in Global Business
02 IS in Global Business
in Global Business
Today
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1.1 © 2010 by Prentice Hall
LEARNING OBJECTIVES
• How are information systems
transforming business, and what is
their relationship to globalization?
• Explain why information systems
are so essential in business today.
• Define an information system and
describe its management,
organization, and technology
components.
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1.2 © 2010 by Prentice Hall
LEARNING OBJECTIVES
(Continued)
• Define complementary assets and
explain how they ensure that
information systems provide genuine
value to an organization.
• Describe the different academic
disciplines used to study information
systems and explain how each
contributes to our understanding of
them.
• Explain what is meant by a
1.3 sociotechnical systems perspective. 3
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How are information systems transforming
business, and what is their relationship to
globalization?
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1.4 © 2010 by Prentice Hall
How and why information systems
transforming business.
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1.6 © 2010 by Prentice Hall
Management Information Systems
Operational excellence:
Improvement of efficiency to attain higher profitability
New products, services, and business models:
IT/IS are the major enabling tools for firms to create
new products and services , as well as new business
models.
Customer and supplier intimacy:
Serving customers raises revenues and profits
Better communication with suppliers lowers costs
Improved decision making
Correct data on Real time data leads to better decisions
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Hall 2011 Hall
Management Information Systems
Competitive advantage
Delivering better performance
Charging less for superior products
Responding to customers and suppliers in real
time
Survival
Information technologies as necessity of
business
May be:
Industry-level changes, e.g. Bank’s introduction
of ATMs
Governmental regulations requiring record-
keeping
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Hall 2011 Hall
Interdependence between Information
systems and its Business
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1.10 © 2010 by Prentice Hall
Perspectives on Information Systems
Raw data from a supermarket checkout counter can be processed and organized to produce meaningful
information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent
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for a specific store or sales territory. © 2010 by Prentice Hall
Perspectives on Information Systems
Levels in a Firm
Business organizations are hierarchies consisting of three principal levels: senior management,
middle management, and operational management. Information systems serve each of these16
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levels. Scientists and knowledge workers often work with middle management.© 2010 by Prentice Hall
Perspectives on Information Systems
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1.18 © 2010 by Prentice Hall
Perspectives on Information
Systems
Business perspective on
information systems:
Managers and business firms invest in IT
and systems because they provide real
economic value to the business.
Investments in information technology will
result in superior returns:
Productivity increases
Revenue increases
Decreasing cost
1.19 Superior long-term strategic positioning 19
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Perspectives on Information
Systems
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
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Perspectives on Information Systems
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1.23 © 2010 by Prentice Hall
Perspectives on Information Systems
Complementary assets:
Assets required to derive value from a primary
investment
Firms supporting technology investments with
investment in complementary assets receive
superior returns
E.g.: invest in technology and the people to
make it work properly
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1.24 © 2010 by Prentice Hall
Complementary assets include:
Organizational investments, e.g.
Appropriate business model
infrastructure
IT- enabled educational programs, Laws and
1.25 regulations 25
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Contemporary Approaches to
Information Systems
The study of information systems deals with issues and insights contributed
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from technical and behavioral disciplines.
1.26 © 2010 by Prentice Hall
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
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1.27 © 2010 by Prentice Hall
Contemporary Approaches to
Information Systems
Sociotechnical view
Combines computer science, management science,
operations research and practical orientation
with behavioral issues like sociology, economics, and
psychology .
• Optimal organizational performance is achieved by
jointly optimizing both the social and technical
systems.
• Adopting a sociotechnical systems perspective helps
to avoid purely technical approach or behavior
approach to IS.
• Technology must be changed and designed in such a
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1.28 way as to fit organizational and individual
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