The post Management Information System appeared first on HKT Consultant.
]]>MIS professionals create information systems for data management (i.e., storing, searching, and analyzing data). In addition, they manage various information systems to meet the needs of managers, staff and customers. By working collaboratively with various members of their work group, as well as with their customers and clients, MIS professionals are able to play a key role in areas such as information security, integration, and exchange. As an MIS major, you will learn to design, implement, and use business information systems in innovative ways to increase the effectiveness and efficiency of your company.
Main contentSee more from basic to advanced
The post Management Information System appeared first on HKT Consultant.
]]>The post How Information Systems Are Transforming Business appeared first on HKT Consultant.
]]>By June 2017, more than 140 million businesses worldwide had dot-com Internet sites registered. Today, 220 million Americans shop online, and 190 million will purchase online. In 2017, FedEx moved about 16 million packages daily in 220 countries and territories around the world, mostly overnight, and the United Parcel Service (UPS) moved more than 28 million packages daily. Businesses are using information technology to sense and respond to rapidly changing customer demand, reduce inventories to the lowest possible levels, and achieve higher levels of operational efficiency. Supply chains have become more fast-paced, with companies of all sizes depending on just-in-time inventory to reduce their overhead costs and get to market faster.
As newspaper print readership continues to decline, in 2017 more than 180 million people read a newspaper online, and millions more read other news sites. Online digital newspaper readership is growing at 10 percent annually, about twice as fast as the Internet itself. About 128 million people watch a video online every day, 85 million read a blog, and 30 million post to blogs, creating an explosion of new writers and new forms of customer feedback that did not exist five years ago (eMarketer, 2018). Social networking site Facebook attracted 214 million monthly visitors in 2018 in the United States and more than 2 billion worldwide. Businesses are using social networking tools to connect their employees, customers, and managers worldwide. Most Fortune 500 companies now have Facebook pages, Twitter accounts, and Tum- blr sites.
E-commerce and Internet advertising continue to expand. Google’s U.S. online ad revenues surpassed $32 billion in 2017, and Internet advertising continues to grow at more than 20 percent a year in the United States, reaching more than $107 billion in revenues in 2018 (eMarketer, 2018).
New federal security and accounting laws requiring many businesses to keep e-mail messages for five years, coupled with existing occupational and health laws requiring firms to store employee chemical exposure data for up to 60 years, are spurring the annual growth of digital information at the estimated rate of 5 exabytes annually, equivalent to 37,000 new Libraries of Congress.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
The post How Information Systems Are Transforming Business appeared first on HKT Consultant.
]]>The post What’s New in Management Information Systems? appeared first on HKT Consultant.
]]>IT Innovations. A continuing stream of information technology innovations is transforming the traditional business world. Examples include the emergence of cloud computing, the growth of a mobile digital business platform based on smartphones and tablet computers, big data and the Internet of Things (IoT), business analytics, machine learning systems, and the use of social networks by managers to achieve business objectives. Most of these changes have occurred in the past few years. These innovations are enabling entrepreneurs and innovative traditional firms to create new products and services, develop new business models, and transform the day-to-day conduct of business. In the process, some old businesses, even industries, are being destroyed while new businesses are springing up.
New Business Models. For instance, the emergence of online video services for streaming or downloading, such as Netflix, Apple iTunes, and Amazon, has forever changed how premium video is distributed and even created. Netflix in 2018 attracted more than 125 million subscribers worldwide to what it calls the “Internet TV revolution.” Netflix has moved into premium TV show production with nearly 1,000 original shows such as American Vandal, Suburra, The Crown, Friends From College, No Country For Old Men, House of Cards, and Orange Is the New Black, challenging cable and broadcast producers of TV shows, and potentially disrupting cable network dominance of TV show production. Apple’s iTanes now accounts for 67 percent of movie and TV show downloads and has struck deals with major Hollywood studios for recent movies and TV shows. A growing trickle of viewers are unplugging from cable and using only the Internet for entertainment.
E-commerce Expansion. E-commerce generated about $700 billion in revenues in 2017 and is estimated to grow to nearly $950 billion by 2020. E-commerce is changing how firms design, produce, and deliver their products and services. E-commerce has reinvented itself again, disrupting the traditional marketing and advertising industry and putting major media and content firms in jeopardy. Facebook and other social networking sites such as YouTube, Twitter, and Tumblr, along with Netflix, Apple Music, and many other media firms, exemplify the new face of e-commerce in the twenty-first century. They sell services. When we think of e-commerce, we tend to think of selling physical products. While this iconic vision of e-commerce is still very powerful and the fastest-growing form of retail in the United States, growing up alongside is a whole new value stream based on selling services, not goods. It’s a services model of e-commerce. Growth in social commerce is spurred by powerful growth of the mobile platform: 85 percent of Face- book’s users access the service from mobile phones and tablets. Information systems and technologies are the foundation of this new services-based e-commerce. Mobile e-commerce hit $229 billion in 2017 and is growing at 30 percent a year.
Management Changes. The management of business firms has changed: With new mobile smartphones, high-speed wireless Wi-Fi networks, and tablets, remote salespeople on the road are only seconds away from their managers’ questions and oversight. Management is going mobile. Managers on the move are in direct, continuous contact with their employees. The growth of enterprise-wide information systems with extraordinarily rich data means that managers no longer operate in a fog of confusion but instead have online, nearly instant access to the really important information they need for accurate and timely decisions. In addition to their public uses on the web, social networking tools, wikis, and blogs are becoming important corporate tools for communication, collaboration, and information sharing.
Changes in Firms and Organizations. Compared to industrial organizations of the previous century, new fast-growing twenty-first-century business firms put less emphasis on hierarchy and structure and more emphasis on employees taking on multiple roles and tasks and collaborating with others on a team. They put greater emphasis on competency and skills rather than position in the hierarchy. They emphasize higher-speed and more-accurate decision making based on data and analysis. They are more aware of changes in technology, consumer attitudes, and culture. They use social media to enter into conversations with consumers and demonstrate a greater willingness to listen to consumers, in part because they have no choice. They show better understanding of the importance of information technology in creating and managing business firms and other organizations. To the extent organizations and business firms demonstrate these characteristics, they are twenty-first- century digital firms.
You can see some of these trends at work in the Interactive Session on Management. Millions of managers rely heavily on the mobile digital platform to coordinate suppliers and shipments, satisfy customers, and manage their employees. A business day without these mobile devices or Internet access would be unthinkable.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
The post What’s New in Management Information Systems? appeared first on HKT Consultant.
]]>The post Can You Run the Company with Your iPhone? appeared first on HKT Consultant.
]]>Network Rail runs, maintains, and develops the rail tracks, signaling, bridges, tunnels, level crossings, and many key stations for most of the rail network in England, Scotland, and Wales. Keeping trains running on time is one of its top priorities. To maintain 20,000 miles of track safely and efficiently, skilled workers must be equipped with appropriate tools and work across thousands of sites throughout the rail network, 24 hours a day. Network Rail uses a group of custom apps for its 22,000 iPhone and iPad devices to streamline maintenance operations, quickly capture incident data, and immediately share critical information.
Several apps help Network Rail improve railway performance and safety. The Close Call app helps employees report hazards as they are found so problems can be addressed quickly. The MyWork app gives maintenance teams all the information they need to start and complete repair tasks. The Sentinel app allows field managers to electronically scan ID cards to verify that workers are qualified to perform specific tasks.
The iPhone and iPad apps provide maintenance technicians with current technical data, GPS locations, and streamlined reports, replacing cumbersome reference books and rain-soaked paperwork that slowed the repair process. Many service calls start with hazardous conditions reported by Network Rail employees themselves. Rather than waiting hours to fill out a report at the depot, workers can take pictures of dangerous situations right away, using the Close Call app to describe situations and upload photos to the call center. Once provided with the hazard’s GPS coordinates, the call center will usually schedule repairs within 24 hours.
MyWork gives maintenance workers a simple overview of all of the jobs each team needs to complete during a specific shift. This mobile app clusters jobs by location, skills required, and opening and closing times. Using precise map coordinates, workers can find sites easily and finish jobs more quickly. By electronically delivering daily job schedules to over 14,000 maintenance staff members, MyWork has enabled them to complete over a half a million work orders to date while minimizing interruptions.
British Airways is the largest airline in the United Kingdom, with operations in more than 200 airports worldwide. The airline has found many ways to use the iPad to improve customer service and operational efficiency. The airline has created more than 40 custom apps for over 17,000 iPads for its workforce that have transformed the way it does business.
Unforeseen disruptions can create long lines of passengers seeking flight information and rebooking. The FlightReact app used by British Airways mobilizes agents to scan a boarding pass, review the customer’s booking, look up alternate flight options, and rebook and reticket passengers—all within four minutes. iBanner allows agents to identify passengers transferring onto a specific flight, while iTranslate enables staff to communicate easily with travelers speaking any language.
Inside the airport, iPads and iPhones communicate with low-energy wireless Bluetooth signals from iBeacon, notifying customers of Wi-Fi access, gate locations, and flight updates. Beyond the terminal, mobile apps are helping British Airways to improve the aircraft turnaround process. British Airways has more than 70 planes at London Heathrow Terminal, five turning around at once, and each requiring a team of around 30 people. To shorten and streamline this process can generate huge business benefits.
Loading luggage and cargo onto an aircraft is one of the most complex parts of the turnaround process, requiring detailed communications between the turnaround manager (TRM), who coordinates and manages the services around the aircraft during departure and arrival, the offsite Centralized Load Control (CLC) team, and the pilot. With iPads running the iLoad Direct app, turnaround managers are able to monitor the aircraft loading process and share data with pilots and back-office staff in real time. TRMs can receive and input real-time data about the aircraft load’s contents, weight, and distribution. These data are essential to help the pilot calculate the right amount of fuel and position the plane for take-off. By streamlining communications between the ground crew, the CLC team, and the pilot, iLoad Direct and iPad speed up the pace at which aircraft become airborne. These mobile tools have helped British Airways achieve an industry-leading benchmark for aircraft turnaround.
In addition to facilitating managerial work, mobile devices are helping rank-and-file employees manage their work lives more effectively. Shyft is one of several smartphone apps that allow workers to share information, make schedule changes, and report labor violations. Thousands of employees at chains like Starbucks and Old Navy are using these apps to view their schedules and swap shifts when they’ve got a scheduling conflict or need extra work.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
The post Can You Run the Company with Your iPhone? appeared first on HKT Consultant.
]]>The post Globalization Challenges and Opportunities: A Flattened World appeared first on HKT Consultant.
]]>In 2005, journalist Thomas Friedman wrote an influential book declaring the world was now “flat,” by which he meant that the Internet and global communications had greatly reduced the economic and cultural advantages of developed countries. Friedman argued that the United States and European countries were in a fight for their economic lives, competing for jobs, markets, resources, and even ideas with highly educated, motivated populations in low-wage areas in the less-developed world (Friedman, 2007). This “globalization” presents both challenges and opportunities for business firms.
A significant percentage of the economy of the United States and other advanced industrial countries in Europe and Asia depends on imports and exports. In 2017, about 30 percent of the $20 trillion U.S. economy resulted from foreign trade, both imports and exports. In Europe and Asia, the number exceeded 50 percent. Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. Tech companies are particularly dependent on offshore revenue: 80 percent of Intel’s revenues in 2017 came from overseas sales of its microprocessors, while Apple got 60 percent of its revenue outside of the United States. Eighty percent of the toys sold in the United States are manufactured in China, while about 90 percent of the PCs manufactured in China use American-made Intel or Advanced Micro Design (AMD) chips. The microprocessor chips are shipped from the United States to China for assembly into devices.
It’s not just goods that move across borders. So too do jobs, some of them high-level jobs that pay well and require a college degree. In the past decade, the United States lost 7 million manufacturing jobs to offshore, low-wage producers. But manufacturing is now a very small part of U.S. employment (less than 12 percent of the labor force and declining). In a normal year, about 300,000 service jobs move offshore to lower-wage countries. Many of the jobs are in less-skilled information system occupations, but some are “tradable service” jobs in architecture, financial services, customer call centers, consulting, engineering, and even radiology. Yet at the same time the United States has lost so many jobs, it has added 33 million new service jobs.
The U.S. economy creates more than 3.5 million new jobs in a normal, non-recessionary year. Although only 1.1 million private sector jobs were created in 2011 due to slow economic recovery, by 2017, the U.S. economy was adding more than 2 million new jobs annually for the third straight year. Employment in information systems and the other service occupations is expanding rapidly, and wages are stable. Outsourcing may have accelerated the development of new systems worldwide, as these systems could be maintained and developed in low- wage countries. In part this explains why the job market for MIS and computer science graduates is growing rapidly in the United States.
The challenge for you as a business student is to develop high-level skills through education and on-the-job experience that cannot be outsourced.
The challenge for your business is to avoid markets for goods and services that can be produced offshore much less expensively. The opportunities are equally immense. Throughout this book you will find examples of companies and individuals who either failed or succeeded in using information systems to adapt to this new global environment.
What does globalization have to do with management information systems? That’s simple: everything. The emergence of the Internet into a full-blown international communications system has drastically reduced the costs of operating and transacting on a global scale. Communication between a factory floor in Shanghai and a distribution center in Rapid City, South Dakota, is now instant and virtually free. Customers can now shop in a worldwide marketplace, obtaining price and quality information reliably 24 hours a day. Firms producing goods and services on a global scale achieve extraordinary cost reductions by finding low-cost suppliers and managing production facilities in other countries. Internet service firms, such as Google and eBay, are able to replicate their business models and services in multiple countries without having to redesign their expensive fixed-cost information systems infrastructure. Briefly, information systems enable globalization.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
The post Globalization Challenges and Opportunities: A Flattened World appeared first on HKT Consultant.
]]>The post The Emerging Digital Firm appeared first on HKT Consultant.
]]>Business processes refer to the set of logically related tasks and behaviors that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated. Developing a new product, generating and fulfilling an order, creating a marketing plan, and hiring an employee are examples of business processes, and the ways organizations accomplish their business processes can be a source of competitive strength.
Key corporate assets—intellectual property, core competencies, and financial and human assets—are managed through digital means. In a digital firm, any piece of information required to support key business decisions is available at any time and anywhere in the firm.
Digital firms sense and respond to their environments far more rapidly than traditional firms, giving them more flexibility to survive in turbulent times. Digital firms offer extraordinary opportunities for more-flexible global organization and management. In digital firms, both time shifting and space shifting are the norm. Time shifting refers to business being conducted continuously, 24/7, rather than in narrow “work day” time bands of 9 a.m. to 5 p.m. Space shifting means that work takes place in a global workshop as well as within national boundaries. Work is accomplished physically wherever in the world it is best accomplished.
Many firms, such as Cisco Systems, 3M, and GE, are close to becoming digital firms, using the Internet to drive every aspect of their business. Most other companies are not fully digital, but they are moving toward close digital integration with suppliers, customers, and employees.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
The post The Emerging Digital Firm appeared first on HKT Consultant.
]]>The post Strategic Business Objectives of Information Systems appeared first on HKT Consultant.
]]>Entire sectors of the economy are nearly inconceivable without substantial investments in information systems. E-commerce firms such as Amazon, eBay, Google, and E*Trade simply would not exist. Today’s service industries— finance, insurance, and real estate as well as personal services such as travel, medicine, and education—could not operate without information systems. Similarly, retail firms such as Walmart and Target and manufacturing firms such as General Motors and GE require information systems to survive and prosper. Just as offices, telephones, filing cabinets, and efficient tall buildings with elevators were once the foundations of business in the twentieth century, information technology is a foundation for business in the twenty-first century.
There is a growing interdependence between a firm’s ability to use information technology and its ability to implement corporate strategies and achieve corporate goals (see Figure 1.2). What a business would like to do in five years often depends on what its systems will be able to do. Increasing market share, becoming the high-quality or low-cost producer, developing new products, and increasing employee productivity depend more and more on the kinds and quality of information systems in the organization. The more you understand about this relationship, the more valuable you will be as a manager.
Specifically, business firms invest heavily in information systems to achieve six strategic business objectives: operational excellence; new products, services, and business models; customer and supplier intimacy; improved decision making; competitive advantage; and survival.
1. Operational Excellence
Businesses continuously seek to improve the efficiency of their operations in order to achieve higher profitability. Information systems and technologies are some of the most important tools available to managers for achieving higher levels of efficiency and productivity in business operations, especially when coupled with changes in business practices and management behavior.
Walmart, the largest retailer on earth, exemplifies the power of information systems coupled with state-of-the-art business practices and supportive management to achieve world-class operational efficiency. In fiscal year 2018, Walmart achieved over $500 billion in sales—nearly one-tenth of retail sales in the United States—in large part because of its Retail Link system, which digitally links its suppliers to every one of Walmart’s stores. As soon as a customer purchases an item, the supplier monitoring the item knows to ship a replacement to the shelf. Walmart is the most efficient retail store in the industry, achieving sales of more than $600 per square foot, compared with its closest competitor, Target, at $425 per square foot and other large general merchandise retail firms producing less than $200 per square foot.
2. New Products, Services, and Business Models
Information systems and technologies are a major enabling tool for firms to create new products and services as well as entirely new business models. A business model describes how a company produces, delivers, and sells a product or service to create wealth.
Today’s music industry is vastly different from the industry a decade ago. Apple Inc. transformed an old business model of music distribution based on vinyl records, tapes, and CDs into an online, legal distribution model based on its own iPod technology platform. Apple has prospered from a continuing stream of innovations, including the iTunes music service, the iPad, and the iPhone.
3. Customer and Supplier Intimacy
When a business really knows its customers and serves them well, the customers generally respond by returning and purchasing more. This raises revenues and profits. Likewise with suppliers, the more a business engages its suppliers, the better the suppliers can provide vital inputs. This lowers costs. How to really know your customers or suppliers is a central problem for businesses with millions of offline and online customers.
The Mandarin Oriental in Manhattan and other high-end hotels exemplify the use of information systems and technologies to achieve customer intimacy. These hotels use computers to keep track of guests’ preferences, such as their preferred room temperature, check-in time, frequently dialed telephone numbers, and television programs, and store these data in a large data repository. Individual rooms in the hotels are networked to a central network server computer so that they can be remotely monitored and controlled. When a customer arrives at one of these hotels, the system automatically changes the room conditions, such as dimming the lights, setting the room temperature, or selecting appropriate music, based on the customer’s digital profile. The hotels also analyze their customer data to identify their best customers and to develop individualized marketing campaigns based on customers’ preferences.
JCPenney exemplifies the benefits of information systems-enabled supplier intimacy. Every time a dress shirt is bought at a JCPenney store in the
United States, the record of the sale appears immediately on computers in Hong Kong at the TAL Apparel Ltd. supplier, a contract manufacturer that produces one in eight dress shirts sold in the United States. TAL runs the numbers through a computer model it developed and then decides how many replacement shirts to make and in what styles, colors, and sizes. TAL then sends the shirts to each JCPenney store, bypassing completely the retailer’s warehouses. In other words, JCPenney’s shirt inventory is near zero, as is the cost of storing it.
4. Improved Decision Making
Many business managers operate in an information fog bank, never really having the right information at the right time to make an informed decision. Instead, managers rely on forecasts, best guesses, and luck. The result is over- or underproduction of goods and services, misallocation of resources, and poor response times. These poor outcomes raise costs and lose customers. In the past decade, information systems and technologies have made it possible for managers to use real-time data from the marketplace when making decisions.
For instance, Verizon Corporation, one of the largest telecommunications companies in the United States, uses a web-based digital dashboard to provide managers with precise real-time information on customer complaints, network performance for each locality served, and line outages or storm-damaged lines. Using this information, managers can immediately allocate repair resources to affected areas, inform consumers of repair efforts, and restore service fast.
5. Competitive Advantage
When firms achieve one or more of these business objectives—operational excellence; new products, services, and business models; customer/supplier intimacy; and improved decision making—chances are they have already achieved a competitive advantage. Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales and higher profits that your competitors cannot match. Apple Inc., Walmart, and UPS, described later in this chapter, are industry leaders because they know how to use information systems for this purpose.
6. Survival
Business firms also invest in information systems and technologies because they are necessities of doing business. Sometimes these “necessities” are driven by industry-level changes. For instance, after Citibank introduced the first automated teller machines (ATMs) in the New York region in 1977 to attract customers through higher service levels, its competitors rushed to provide ATMs to their customers to keep up with Citibank. Today, virtually all banks in the United States have regional ATMs and link to national and international ATM networks, such as CIRRUS. Providing ATM services to retail banking customers is simply a requirement of being in and surviving in the retail banking business.
There are many federal and state statutes and regulations that create a legal duty for companies and their employees to retain records, including digital records. For instance, the Toxic Substances Control Act (1976), which regulates the exposure of U.S. workers to more than 75,000 toxic chemicals, requires firms to retain records on employee exposure for 30 years. The Sarbanes-Oxley Act (2002), which was intended to improve the accountability of public firms and their auditors, requires certified public accounting firms that audit public companies to retain audit working papers and records, including all e-mails, for five years. The Dodd-Frank Wall Street Reform and Consumer Protection Act (2010), which was intended to strengthen regulation of the banking industry, requires firms to retain all records for 10 years. Many other pieces of federal and state legislation in health care, financial services, education, and privacy protection impose significant information retention and reporting requirements on U.S. businesses. Firms turn to information systems and technologies to provide the capability to respond to these challenges.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
The post Strategic Business Objectives of Information Systems appeared first on HKT Consultant.
]]>The post What Is an Information System? appeared first on HKT Consultant.
]]>Information systems contain information about significant people, places, and things within the organization or in the environment surrounding it. By information we mean data that have been shaped into a form that is meaningful and useful to human beings. Data, in contrast, are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use.
A brief example contrasting information and data may prove useful. Supermarket checkout counters scan millions of pieces of data from bar codes, which describe each product. Such pieces of data can be totaled and analyzed to provide meaningful information, such as the total number of bottles of dish detergent sold at a particular store, which brands of dish detergent were selling the most rapidly at that store or sales territory, or the total amount spent on that brand of dish detergent at that store or sales region (see Figure 1.3).
Three activities in an information system produce the information that organizations need to make decisions, control operations, analyze problems, and create new products or services. These activities are input, processing, and output (see Figure 1.4). Input captures or 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 or to the activities for which it will be used. Information systems also require feedback, which is output that is returned to appropriate members of the organization to help them evaluate or correct the input stage.
In PCL’s project management system, input includes the names and addresses of contractors and subcontractors, project names and identification numbers, project activities, labor costs, materials costs, and start and completion dates for project activities. Computers store these data and process them to calculate how much each project activity and the entire project will cost and estimated completion time. The system provides meaningful information such as the size, cost, and duration of all projects under PCL management, projects over and under budget, and projects and project activities that are late or on time.
Although computer-based information systems use computer technology to process raw data into meaningful information, there is a sharp distinction between a computer and a computer program on the one hand and an information system on the other. Computers and related software programs are the technical foundation, the tools and materials, of modern information systems. Computers provide the equipment for storing and processing information. Computer programs, or software, are sets of operating instructions that direct and control computer processing. Knowing how computers and computer programs work is important in designing solutions to organizational problems, but computers are only part of an information system.
A house is an appropriate analogy. Houses are built with hammers, nails, and wood, but these do not make a house. The architecture, design, setting, landscaping, and all of the decisions that lead to the creation of these features are part of the house and are crucial for solving the problem of putting a roof over one’s head. Computers and programs are the hammers, nails, and lumber of computer-based information systems, but alone they cannot produce the information a particular organization needs. To understand information systems, you must understand the problems they are designed to solve, their architectural and design elements, and the organizational processes that lead to the solutions.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
The post What Is an Information System? appeared first on HKT Consultant.
]]>The post Dimensions of Information Systems appeared first on HKT Consultant.
]]>The field of management information systems (MIS) tries to achieve this broader information systems literacy. MIS deals with behavioral issues as well as technical issues surrounding the development, use, and impact of information systems used by managers and employees in the firm.
Let’s examine each of the dimensions of information systems—organizations, management, and information technology.
1. Organizations
Information systems are an integral part of organizations. Indeed, for some companies, such as credit reporting firms, there would be no business without an information system. The key elements of an organization are its people, structure, business processes, politics, and culture. We introduce these components of organizations here and describe them in greater detail in Chapters 2 and 3.
Organizations have a structure that is composed of different levels and specialties. Their structures reveal a clear-cut division of labor. Authority and responsibility in a business firm are organized as a hierarchy, or a pyramid structure. The upper levels of the hierarchy consist of managerial, professional, and technical employees, whereas the lower levels consist of operational personnel.
Senior management makes long-range strategic decisions about products and services as well as ensures financial performance of the firm. Middle management carries out the programs and plans of senior management, and operational management is responsible for monitoring the daily activities of the business. Knowledge workers, such as engineers, scientists, or architects, design products or services and create new knowledge for the firm, whereas data workers, such as secretaries or clerks, assist with scheduling and communications at all levels of the firm. Production or service workers actually produce the product and deliver the service (see Figure 1.6).
Experts are employed and trained for different business functions. The major business functions, or specialized tasks performed by business organizations, consist of sales and marketing, manufacturing and production, finance and accounting, and human resources (see Table 1.1).
An organization coordinates work through its hierarchy and through its business processes. Most organizations’ business processes include formal rules that have been developed over a long time for accomplishing tasks. These rules guide employees in a variety of procedures, from writing an invoice to responding to customer complaints. Some of these business processes have been written down, but others are informal work practices, such as a requirement to return telephone calls from coworkers or customers, that are not formally documented. Information systems automate many business processes. For instance, how a customer receives credit or how a customer is billed is often determined by an information system that incorporates a set of formal business processes.
Each organization has a unique culture, or fundamental set of assumptions, values, and ways of doing things, that has been accepted by most of its members. You can see organizational culture at work by looking around your university or college. Some bedrock assumptions of university life are that professors know more than students, that the reason students attend college is to learn, and that classes follow a regular schedule.
Parts of an organization’s culture can always be found embedded in its information systems. For instance, UPS’s first priority is customer service, which is an aspect of its organizational culture that can be found in the company’s package tracking systems, which we describe in this section.
Different levels and specialties in an organization create different interests and points of view. These views often conflict over how the company should be run and how resources and rewards should be distributed. Conflict is the basis for organizational politics. Information systems come out of this cauldron of differing perspectives, conflicts, compromises, and agreements that are a natural part of all organizations.
In Chapter 3, we examine these features of organizations and their role in the development of information systems in greater detail.
2. Management
Management’s job is to make sense out of the many situations faced by organizations, make decisions, and formulate action plans to solve organizational problems. Managers perceive business challenges in the environment, they set the organizational strategy for responding to those challenges, and they allocate the human and financial resources to coordinate the work and achieve success. Throughout, they must exercise responsible leadership. The business information systems described in this book reflect the hopes, dreams, and realities of real-world managers.
But managers must do more than manage what already exists. They must also create new products and services and even re-create the organization from time to time. A substantial part of management responsibility is creative work driven by new knowledge and information. Information technology can play a powerful role in helping managers design and deliver new products and services and redirecting and redesigning their organizations.
3. Information Technology
Information technology is one of many tools managers use to cope with change. Computer hardware is the physical equipment used for input, processing, and output activities in an information system. It consists of the following: computers of various sizes and shapes (including mobile handheld devices); various input, output, and storage devices; and telecommunications devices that link computers together.
Computer software consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system.
Data management technology consists of the software governing the organization of data on physical storage media.
Networking and telecommunications technology, consisting of both physical devices and software, links the various pieces of hardware and transfers data from one physical location to another. Computers and communications equipment can be connected in networks for sharing voice, data, images, sound, and video. A network links two or more computers to share data or resources, such as a printer.
The world’s largest and most widely used network is the Internet. The Internet is a global “network of networks” that uses universal standards to connect millions of networks in more than 230 countries around the world.
The Internet has created a new “universal” technology platform on which to build new products, services, strategies, and business models. This same technology platform has internal uses, providing the connectivity to link different systems and networks within the firm. Internal corporate networks based on Internet technology are called intranets. Private intranets extended to authorized users outside the organization are called extranets, and firms use such networks to coordinate their activities with other firms for making purchases, collaborating on design, and other interorganizational work. For most business firms today, using Internet technology is both a business necessity and a competitive advantage.
The World Wide Web is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format on the Internet. Web pages contain text, graphics, animations, sound, and video and are linked to other web pages. By clicking on highlighted words or buttons on a web page, you can link to related pages to find additional information and links to other locations on the web. The web can serve as the foundation for new kinds of information systems such as UPS’s web-based package tracking system described in the Interactive Session.
All of these technologies, along with the people required to run and manage them, represent resources that can be shared throughout the organization and constitute the firm’s information technology (IT) infrastructure. The
IT infrastructure provides the foundation, or platform, on which the firm can build its specific information systems. Each organization must carefully design and manage its IT infrastructure so that it has the set of technology services it needs for the work it wants to accomplish with information systems.
The Interactive Session on Technology describes some of the typical technologies used in computer-based information systems today. UPS invests heavily in information systems technology to make its business more efficient and customer oriented. It uses an array of information technologies, including bar code scanning systems, wireless networks, large mainframe computers, handheld computers, the Internet, and many different pieces of software for tracking packages, calculating fees, maintaining customer accounts, and managing logistics.
Let’s identify the organization, management, and technology elements in the UPS package tracking system we have just described. The organization element anchors the package tracking system in UPS’s sales and production functions (the main product of UPS is a service-package delivery). It specifies the required procedures for identifying packages with both sender and recipient information, taking inventory, tracking the packages en route, and providing package status reports for UPS customers and customer service representatives.
The system must also provide information to satisfy the needs of managers and workers. UPS drivers need to be trained in both package pickup and delivery procedures and in how to use the package tracking system so that they can work efficiently and effectively. UPS customers may need some training to use UPS in-house package tracking software or the UPS website.
UPS’s management is responsible for monitoring service levels and costs and for promoting the company’s strategy of combining low cost and superior service. Management decided to use computer systems to increase the ease of sending a package using UPS and of checking its delivery status, thereby reducing delivery costs and increasing sales revenues.
The technology supporting this system consists of handheld computers, bar code scanners, desktop computers, wired and wireless communications networks, UPS’s data center, storage technology for the package delivery data, UPS in-house package tracking software, and software to access the World Wide Web. The result is an information system solution to the business challenge of providing a high level of service with low prices in the face of mounting competition.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
The post Dimensions of Information Systems appeared first on HKT Consultant.
]]>The post It Isn’t Just Technology: A Business Perspective on Information Systems appeared first on HKT Consultant.
]]>We can see that from a business perspective, an information system is an important instrument for creating value for the firm. Information systems enable the firm to increase its revenue or decrease its costs by providing information that helps managers make better decisions or that improves the execution of business processes. For example, the information system for analyzing supermarket checkout data illustrated in Figure 1.3 can increase firm profitability by helping managers make better decisions as to which products to stock and promote in retail supermarkets.
Every business has an information value chain, illustrated in Figure 1.7, in which raw information is systematically acquired and then transformed through various stages that add value to that information. The value of an information system to a business, as well as the decision to invest in any new information system, is, in large part, determined by the extent to which the system will lead to better management decisions, more efficient business processes, and higher firm profitability. Although there are other reasons why systems are built, their primary purpose is to contribute to corporate value.
The business perspective calls attention to the organizational and managerial nature of information systems. An information system represents an organizational and management solution, based on information technology, to a challenge or problem posed by the environment. Every chapter in this book begins with a short case study that illustrates this concept. A diagram at the beginning of each chapter illustrates the relationship between a business challenge and resulting management and organizational decisions to use IT as a solution to challenges generated by the business environment. You can use this diagram as a starting point for analyzing any information system or information system problem you encounter.
Review the diagram at the beginning of this chapter. The diagram shows how PCL’s systems solved the business problem of inefficiencies created by a far-flung, highly paper-intensive business. These systems provided a solution that takes advantage of opportunities provided by new wireless digital technology and the Internet. PCL digitally enabled its key business processes for planning, designing, and monitoring its construction projects. These systems have been essential in improving PCL’s overall business performance. The diagram also illustrates how management, technology, and organizational elements work together to create the systems.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
The post It Isn’t Just Technology: A Business Perspective on Information Systems appeared first on HKT Consultant.
]]>