What is an Information System: Digital Technologies in a Global Society Flashcards
How are information systems transforming global business?
IT is used to respond quicker to customer demand, reduce inventories to the lowest possible level through data predictions (and trends like just-in-time inventory) and achieve operational efficiency
Globalization, through increased IT tools for collaboration
Just-in-time inventory
Reduces overhead costs and get to market faster
You use information systems and data prediction to make it work
Digital Firm and its characteristics (4)
The characteristics:
oNearly all of the organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated.
oCore business processes are accomplished through digital networks spanning the entire organization or linking multiple organizations.
oTime shifting: Business is conducted continuously 24/7 and not just a 9-5 workday
oSpace shifting: Work takes place in a global workshop as well as within national boundaries, and any physical work is accomplished wherever in the world it is best accomplished.
More flexible to respond to change than physical firms
Business Processes
A collection of activities required to produce a product or service (how work is organized, coordinated and focused to produce a valuable product or service)
A set of logically related tasks and behaviors that organizations develop over time to produce specific business results and how the activities are organized and coordinated
Examples of business processes could be fulfilling an order, developing a new product, creating a marketing plan, hiring an employee
See picture for more examples
Key corporate assets
Intellectual property, core competencies and financial and human assets
In a digital firm, these are managed through digital means
Strategic business objectives achieved through information systems
- Operational excellence –> E.g. the Walmart system which automatically sends a note to the suppliers whenever a customer buys an i
- New products, services and business models –> e.g. The idea of e-books, where you have an e-book reader and then you can read the books online. That’s a new product / service. This is still the same business model as
- Customer and supplier intimacy –> e.g. Amazon knows your previous purchases and can thus give you personal recommendations for you when you open the app or website.
- Improved decision making –> managers can use real time data instead of forecasrs
- Competitive advantage
- Survival –> e.g. ATM machines, which was not really to give a competitive advantage, but as soon as the ATM technology came out, you couldn’t really survive in the industry without also getting ATMs. The same goes for online banking, which is now a vital part of banking.
Business model
How a company produces, delivers and sells a product or service to create wealth
e.g. The idea of e-books, where you have an e-book reader and then you can read the books online. That’s a new product / service. This is still the same business model as normal bookstores, but if you e.g. Offer a subscription, that’ll be a new business model too
Information Technology (IT)
All the hardware and software that a firm needs to use to achieve its business objectives
Computer machines, storage devices, smartphones, software (Windows, Microsoft Office, computer programs)
Information system
A set of interrelated components that collect, process, store and distribute information to support decision making and control in an organization
Provide solutions to organizational problems via information systems that use computers and computer programs to provide information
Data
raw bits of facts which has not yet been sorted into understandable information
streams of raw facts representing events (before they have been arranged and organized into information people can understand and use)
Information
data that has been shaped into a form that is meaningful and useful to people
Functions of an information system (hint: I, P, O, F)
- Input –> captures and collects raw data from within the organization or from its external environment
- Processing –> converts this raw input into a meaningful form
- Output –> Transfers the processed information to the people who will use it
- Feedback –> Output that is returned to appropriate members of the organization to help them evaluate or correct the input stage
See picture
Three dimensions of systems / the interrelated components of an information system
Organization /organizational choices –> the people, the structure, the business processes, the politics and culture
Management / management choices –> make decisions and action plans to solve organizational problems
Technology / technology choices / the information technology infrastructure –> the hardware and software, intranets, extranets, networks
See model
The structure of a company
- Senior management: long range strategic decisions about products and services and ensures financial performance of the firm
- Middle management: carries out the programs and plans of senior management
- Operational management: monitoring daily activities of the business
- Knowledge workers (engineers, scientists, architects), design products/services and create new knowledge for the firm
- Data workers (secretaries, clerks) assist with scheduling and communications at all levels of the firm
- Production / service workers: produce the product or deliver the service
See model
Data management technology
Software used for organizing data on physical storage media
Networking and telecommunications technology
consists of physical devices and software, which links the hardware and transfers data from one physical location to another
Network
links two or more computers to share data or resources - could be a printer, but could also be the Internet
Intranets
corporate networks based on Internet technology
Extranets
private intranets extended to authorized users outside the organizations (e.g. Used for coordination with other firms for collabing on a design or making purchases)
World Wide Web
service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting and displaying information in a page format on the internet
Complementary assets + organizational assets, managerial assets, social assets
assets required to derive value from a primary investment investments in automobiles requires complementary investments in highways, roads, gas station, regulations
Can be divided into organizational assets, managerial assets and social assets
• Organizational assets/investments (efficient business processes, supportive organizational culture that values efficiency)
• Managerial assets/investments (strong senior management support for IT investment, incentive for management innovation, teamwork and collaboration projects)
• Social assets/investments (coordination between social actors) (technology standards (you can access website regardless of device brand), laws and regulation, outside firms that can assist in implementation)
The contemporary approaches to information systems
Technical approach –> the tech is what matters
Behavioral approaches –> the organization is what matters because the technology is just a tool
Sociotechnical perspective: tech, management, organization – the middle of the two, you need to know about the tech but also about the people
See model
Technical Approach
Focus on mathematically based models to study information systems and physical technology and formal capabilities of the system
Computer Science: Establishing theories of computability, methods of computation, methods of efficient data storage/access
Management Science: Development of models for decision-making and management practices
Operations Research: Mathematical techniques for optimizing selected parameters of organizations, e.g. Transportation, inventory control, transaction costs
Behavioral Approach
Concerned with behavioral issues arising in the development and long term maintenance of information systems
Mainly concentrates on changes in attitude, management and organizational policy and behavior in regards to information systems and technology
Sociotechnical View
What we learned from the book
Optimal organizational performance is achieved by jointly optimizing both the social and technical systems used in production
See model
Trends of Information Systems today
- It’s becoming more obvious that the return of investment on IT is higher than on other investments
- Expanding E-commerce
- Mobile digital platforms
- Systems that improve customer experience, reduce inventories, predict and respond to demand
- AI
- The Internet of Things
- Globalization: internet has reduces costs of operating on a global scale
