Information systems are the foundation for conducting business today. In many industries, survival and even existence without extensive use of IT is inconceivable, and IT plays a critical role in increasing productivity. Although information technology has become more of a commodity, when coupled with complementary changes in organization and management, it can provide the foundation for new products, services, and ways of conducting business that provide firms with a strategic advantage.
3. What exactly is an information system? How does it work? What are its management, organization and technology components?
* Define an information system and describe the activities it performs.
An information system is a set of interrelated components that work together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization. In addition to supporting decision making, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products.
* List and describe the organizational, management, and technology dimensions of information systems.
Organization: The organization dimension of information systems involves issues such as the organization’s hierarchy, functional specialties, business processes, culture, and political interest groups. Management: The management dimension of information systems involves setting organizational strategies, allocating human and financial resources, creating new products and services and re-creating the organization if necessary. Technology: The technology dimension consists of computer hardware, software, data management technology, and networking/telecommunications technology.
* Distinguish between data and information and between information systems literacy and computer literacy. Information literacy: is the ability to find, learn and use information. It doesn’t rely on what you can remember but what you can locate and use. The process of learning in an information literate environment involves being able to find the information rather than memorize it. Computer literacy: is the ability to use the computer. This is an understanding of how to use productivity software on the computer such as word processing, excel, and powerpoint presentation researchs. It is also having knowlege on how to use the internet, collabaration tools, and technology.
4. What are complementary assets? Why are complementary assets essential for ensuring that information systems provide genuine value for an organization? * Define complementary assets and describe their relationship to information technology. Complementary assets are those assets required to derive value from a primary investment. Firms must rely on supportive values, structures, and behavior patterns to obtain a greater value from their IT investments. Value must be added through complementary assets such as new business processes, management behavior, organizational culture, and training.
* Describe the complementary social, managerial, and organizational assets required to optimize returns from information technology investments.
* Supportive culture that values efficiency and effectiveness
* Appropriate business model
* Efficient business processes
* Decentralized authority
* Strong senior management support for technology investment and change
* Incentives for management innovation
* Teamwork and collaborative work environments
* The Internet and telecommunications infrastructure
* IT-enriched educational programs raising labor force computer literacy
* Standards (both government and private sector)
1. What are business processes? How are they related to information systems? * Define business processes and describe the role they play in organizations. A business process is a logically related set of activities that define how specific business tasks are performed. Business processes are the ways in which organizations coordinate and organize work activities, information, and knowledge to produce their valuable products or services. How well a business performs depends on how well its business processes are designed and coordinated. Well-designed business processes can be a source of competitive strength for a company if it can use the processes to innovate or perform better than its rivals. Conversely, poorly designed or executed business processes can be a liability if they are based on outdated ways of working and impede responsiveness or efficiency. * Describe the relationship between information systems and business processes.
Information systems automate manual business processes and make an organization more efficient. Data and information are available to a wider range of decision-makers more quickly when information systems are used to change the flow of information. Tasks can be performed simultaneously rather than sequentially, speeding up the completion of business processes. Information systems can also drive new business models that perhaps wouldn’t be possible without the technology.
3. How do systems that link the enterprise improve organizational performance? * Explain how enterprise applications improve organizational performance. An organization operates in an ever-increasing competitive and global environment. The successful organization focuses on the efficient execution of its processes, customer service, and speed to market. Enterprise applications provide an organization with a consolidated view of its operations across different functions, levels, and business units. Enterprise applications allow an organization to efficiently exchange information among its functional areas, business units, suppliers, and customers.
* Define enterprise systems, supply chain management systems, customer relationship management systems, and knowledge management systems and describe their business benefits. Enterprise systems integrate the key business processes of an organization into a single central data repository. This makes it possible for information that was previously fragmented in different systems to be shared across the firm and for different parts of the business to work more closely together.
Business benefits include:
* Information flows seamlessly throughout an organization, improving coordination, efficiency, and decision making. * Gives companies the flexibility to respond rapidly to customer requests while producing and stocking only that inventory necessary to fulfill existing orders. * Increases customer satisfaction by improving product shipments, minimizing costs, and improving a firm’s performance. * Improves decision making by improving the quality of information for all levels of management. That leads to better analyses of overall business performance, more accurate sales and production forecasts, and higher profitability.
In short, supply chain management systems help businesses better manage relationships with their suppliers. Objective of SCM: Get the right amount of products from the companies’ source to their point of consumption with the least amount of time and with the lowest cost. SCM provides information to help suppliers, purchasing firms, distributors, and logistics companies share information about orders, production, inventory levels, and delivery of products and services so that they can source, produce, and deliver goods and services efficiently. SCM helps organizations achieve great efficiencies by automating parts of these processes or by helping organizations rethink and streamline these processes. SCM is important to a business because through its efficiency it can coordinate, schedule, and control the delivery of products and services to customers. Business benefits include: * Decide when and what to produce, store, and move
* Rapidly communicate orders
* Track the status of orders
* Check inventory availability and monitor inventory levels
* Reduce inventory, transportation, and warehousing costs
* Track shipments
* Plan production based on actual customer demand
* Rapidly communicate changes in product design
Customer relationship management systems: enable a business to better manage its relationships with existing and potential customers. With the growth of the Web, potential customers can easily comparison shop for retail and wholesale goods and even raw materials, so treating customers better has become very important.
Business benefits include:
* CRM systems provide information to coordinate all the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention. This information helps firms identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales. * CRM systems consolidate customer data from multiple sources and provide analytical tools for answering questions such as: What is the value of a particular customer to the firm over his/her lifetime?
* CRM tools integrate a business’s customer-related processes and consolidate customer information from multiple communication channels, giving the customer a consolidated view of the company. * Detailed and accurate knowledge of customers and their preferences help firms increase the effectiveness of their marketing campaigns and provide higher-quality customer service and support.
Knowledge management systems : enable organizations to better manage processes for capturing and applying knowledge and expertise. These systems collect all relevant knowledge and experience in the firm, and make it available wherever and whenever it is needed to improve business processes and management decisions. They also link the firm to external sources of knowledge.
Business benefits include:
* KMS support processes for acquiring, storing, distributing, and applying knowledge, as well as processes for creating new knowledge and integrating it into the organization. * KMS include enterprise-wide systems for managing and distributing documents, graphics, and other digital knowledge objects; systems for creating corporate knowledge directories of employees with special areas of expertise; office systems for distributing knowledge and information; and knowledge work systems to facilitate knowledge creation. * KMS use intelligent techniques that codify knowledge and experience for use by other members of the organization and tools for knowledge discovery that recognize patterns and important relationships in large pools of data.
* Explain how intranets and extranets help firms integrate information and business processes. Because intranets and extranets share the same technology and software platforms as the Internet, they are easy and inexpensive ways for companies to increase integration and expedite the flow of information within the company (intranets alone) and with customers and suppliers (extranets). They provide ways to distribute information and store corporate policies, programs, and data. Both types of nets can be customized by users and provide a single point of access to information from several different systems.
5. What is the role of the information systems function in a business? * Describe how the information systems function supports a business. The information systems departments is the formal organizational unit responsible for information technology services. The information systems department is responsible for maintaining the hardware, software, data storage, and networks that comprise the firm’s IT infrastructure. Compare the roles played by programmers, systems analysts, information systems managers, the chief information officer (CIO), chief security officer (CSO), and chief knowledge officer (CKO). * Programmers are highly trained technical specialists who write the software instructions for computers. * Systems analysts constitute the principal liaisons between the information systems groups and the rest of the organization. The systems analyst’s job is to translate business problems and requirements into information requirements and systems.
* Information systems managers lead teams of programmers and analysts, project managers, physical facility managers, telecommunications mangers, or database specialists. * Chief information officer (CIO) is a senior manager who oversees the use of information technology in the firm. * Chief security officer (CSO) is responsible for information systems security in the firm and has the principle responsibility for enforcing the firm’s information security policy. The CSO is responsible for educating and training users and IS specialists about security, keeping management aware of security threats and breakdowns, and maintaining the tools and policies chosen to implement security. * Chief knowledge officer (CKO) helps design programs and systems to find new sources of knowledge or to make better use of existing knowledge in organizational and management processes.