Lecture 2
Information Systems
in Business Today (Cont.)
Information Systems in Business Today (Cont.)-
The Role of Information Systems in Business Today (Cont.)
The Interdependence Between Organization & IT
In contemporary systems, there is a growing interdependence between a firm’s
information systems and its business capabilities. Changes in strategy, rules, and
business processes increasingly require changes in hardware, software,
databases, and telecommunications. Often, what the organization would like to
do depends on what its systems will permit it to do.
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Management Information Systems
Information Systems in Business Today (Cont.)-
Dimensions of Information Systems
An Information system represents a combination of
management, organization, and technology element.
To fully understand information systems, a manager must
understand the broader organization, management, and
information technology dimensions of systems and their
power to provide solutions to challenges and problems in the
business environment.
Hence, it incorporates an understanding of the management
and organizational dimensions of systems as well as the
technical dimensions of systems as information systems
literacy.
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Information Systems in Business Today (Cont.)-
Dimensions of Information Systems (Cont.)-
1. Organization Dimension
Hierarchy of authority and responsibility
– Senior management
– Middle management
– Operational management
– Knowledge workers
– Data workers
– Production or service workers
Separation of business functions
– Sales and marketing
– Human resources
– Finance and accounting
– Manufacturing and production
Unique business processes
Unique business culture
Organizational politics
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Information Systems in Business Today (Cont.)-
Dimensions of Information Systems (Cont.)-
1. Organization Dimension (Cont.)- 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
these levels.
Scientists and knowledge workers
often work with middle
management.
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Information Systems in Business Today (Cont.)-
Dimensions of Information Systems (Cont.)-
2. Management Dimension
Managers set organizational strategies for responding to business
challenges
In addition, managers must act creatively:
– Creation of new products and services
– Occasionally re-creating the organization
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Information Systems in Business Today (Cont.)-
Dimensions of Information Systems (Cont.)-
3. Technology Dimension
Computer hardware and software
Data management technology
Networking and telecommunications technology
– Networks, the Internet, intranets, and extranets, World Wide
Web (Assignment)
IT infrastructure: provides a platform that system is built on
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Information Systems in Business Today (Cont.)-
Perspectives on Information Systems (Cont.)
A business perspective on information systems
– An information system is an instrument for creating value
– Investments in information technology will result in
superior returns:
• Productivity increases
• Revenue increases
• Superior long-term strategic positioning
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Information Systems in Business Today (Cont.)-
Business Information Value Chain
Business Information Value Chain
– Raw data is acquired and transformed through stages that add
value to that information
– Value of information system determined in part by the extent to
which it leads to better decisions, greater efficiency, and higher
profits
Business Perspective
– Calls attention to the organizational and managerial nature of
information systems
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Information Systems in Business Today (Cont.)-
Business Information Value Chain (Cont.)
From a business perspective, information systems are part of a series of value-adding
activities سلسلة من األنشطة ذات القيمة المضافةfor acquiring, transforming, and distributing
information that managers can use to improve decision making, enhance organizational
performance, and, ultimately, increase firm profitability.
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Information Systems in Business Today (Cont.)-
Perspectives on Information Systems (Cont.)
Investing in information technology does not guarantee
good returns
Considerable variation in the returns’ firms receive from
systems investments
Factors:
– Adopting the right business model
– Investing in complementary assets (organizational and
management capital)
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Information Systems in Business Today (Cont.)-
Perspectives on Information Systems (Cont.)
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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Information Systems in Business Today (Cont.)-
Perspectives on Information Systems (Cont.)
Complementary assets include:
– Organizational assets, e.g.,
• Appropriate business model
• Efficient business processes
– Managerial assets, e.g.,
• Incentives for management innovation
• Teamwork and collaborative work environments
– Social assets, e.g.,
• The Internet and telecommunications infrastructure
• Technology standards
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Information Systems in Business Today (Cont.)-
Contemporary Approach To Information Systems
The study of information systems deals with issues and insights
contributed from technical and behavioral disciplines.
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Information Systems in Business Today (Cont.)-
Contemporary Approach To Information Systems (Cont.)
Technical approach
– Emphasizes mathematically based models
– Computer science, management science, operations research
Behavioral approach
– Behavioral issues (strategic business integration, implementation, etc.)
– Psychology, economics, sociology
Management Information Systems
– Combines computer science, management science, operations research
and practical orientation with behavioral issues
Four main actors
– Suppliers of hardware and software
– Business firms
– Managers and employees
– Firm’s environment (legal, social, cultural context)
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Information Systems in Business Today (Cont.)-
Approach of this Course
Approach of this book: Socio-technical view
– Optimal organizational performance achieved by jointly
optimizing both social and technical systems used in production
– Helps avoid purely technological approach
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Information Systems in Business Today (Cont.)-
Approach of this Course (Cont.)-
A Socio-Technical Perspective on Information Systems
In a socio-technical perspective, the performance of a system is
optimized when both the technology and the organization mutually
adjust to one another until a satisfactory fit is obtained.
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