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Why Information Systems Are so Essential in Business Today

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Explain why information systems are so essential in business today: Information systems are a foundation for conducting business today. In many industries, survival and the ability to achieve strategic business goals are difficult without extensive use of information technology. Businesses today use information systems to achieve six major objectives: operational excellence, new products, services, and business models, customer/supplier intimacy, improved decision making, competitive advantage, and day to day survival

Define an information system from both a technical and a business perspective. From a technical perspective, an information system collects, stores and distributes information from an organization’s environment and internal operations to support organizational functions and decision making, communication, coordination, control, analysis, and visualization. Information systems transform raw data into useful information through three basic activities: input, processing and output.

From a business perspective, an information system provides a solution to a problem or challenge facing a firm and represents a combination of management, organization and technology elements. The management decision of information systems involves issues such as leadership, strategy, and management behavior. The technology dimension consists of computer hardware, software, data management technology and networking/telecommunications technology (including the internet). The organization dimension of information sytems involves issues such as the organizations hierarchy, functional specialties, business processes, culture and political interest groups.

Identify and describe the three dimensions of information systems: Organizations
Key elements of organizations – people/structure/business process/politics/culture -orgs have structures – different levels and specialties

Upper – managerial/professional/technical
Lower – operational personnel

Senior management – makes long rate strategic decisions about products and services and financial performance Middle management – carries out programs and plans of senior management Operational management – monitors daily activities of business

Knowledge workers – engineers, scientists, architects – design products and services and create new knowledge for firm Data works – secretaries, clerks – do paperwork
Production or service workers – produce product and deliver service

Business functions specialized tasks performs by business orgs -sales and marketing – sell
-mfg and production – manage assets
Human resources – attract, develop, maintain labor force, records

-make sense of the situations faced
-exercise responsible leadership
-create new products and services; even re-create organization from time to time

IT is a tool managers cope with change

Computer hardware – physical equipment used for input, processing and output -includes computers, input, output and storage devices, telecommunication devices

Computer software

Data management – software governing the organization of data on physical storage media

Network and telcom technology – physical devices and software – links to hardware

Network – links 2 or more computers to share data or resources Example: printer

Internet – most used network

Intranet – internal corp based on internet technology

Extranet – private intranets extended to authorized users outside of organization -firms use to coordinate activities with other firms for making purchases, collaboration on designs and other inter-organizational work

World wide web

IT infrastructure – provides foundation/platform on which the company builds it’s IT on -orgs must carefully design and manage it’s IT so it has the tech services it needs for the work it wants to accomplish

Assess the complementary assets required for information technology to provide value to a business. In order to obtain meaningful value from information systems, organizations must support their technology investments with appropriate complementary investments in organizations and management. These complementary assets include new business models and business processes, supportive organizational culture and management behavior, appropriate technology standards, regulations, and laws. New information technology investments are unlikely to product high returns unless businesses make the appropriate managerial organizational changes to support the technology.

Identify and describe contemporary approaches to the study of information systems and distinguish between computer literacy and information systems literacy. page 18

Define and describe business processes and their relationship to information systems. A business process is a logically related set of activities that defines how specific business tasks are performed, and it represents a unique way in which an organization coordinates work, information, and knowledge. Managers need to pay attention to business processes because they determine how well the organization can execute its business, and they may be a source of strategic advantage. There are business processes specific to each of the major business functions, but many business processes are cross-functional. Information systems automate parts of business processes and they can help organizations redesign and streamline these processes. Describe the information systems supporting the major business functions: sales and marketing, manufacturing and production, finance and accounting, and human resources. Page 45 ESS, DSS, MIS, TPS

Evaluate the role played by systems serving the various levels of management in a business and their relationship to each other. Systems serving operational management are transaction processing systems, such as payroll or order processing that track the flow of the daily routine transactions necessary to conduct business. Management information systems and decision-support systems support middle management. Most MIS reports condense information from TPS and are not highly analytical. DSS support management systems that are unique and rapidly changing using advanced analytical models and data analysis capabilities. Executive support systems support senior management by providing data that are often in the form of graphs and charts delivered via portals using many sources of internal and external information.

Explain how enterprise applications and intranets promote business process integration and improve organizational performance. Enterprise applications (enterprise systems, supply chain management systems, customer relationship management systems, and knowledge management systems) are designed to coordinate multiple functions and business processes. Enterprise systems integrate the key internal business processes of a firm into a single software system to improve coordination, efficiency and decision making. Supply chain management systems help the firm manage its relationship with suppliers to optimize the planning, sourcing, manufacturing, and delivery of products and services.

Customer relationship management uses information systems to coordinate all of the business processes surrounding the firm’s interactions with its customers to optimize firm revenue and customer satisfaction. Knowledge management systems enable firms to optimize the creation, sharing, and distribution of the knowledge. Jobs where interaction is the primary value-adding activity benefit from collaboration and communication systems. Intranets and extranets use Internet technology and standards to assemble information from unrelated systems and present it to the user in a Web page format. Extranets make portions of private corporate intranets available to outsiders.

Assess the role of the information systems function in a business. The information systems department is the formal organizational unit responsible for information technology services. It is responsible for maintaining the hardware, software, data storage, and networks that comprise the firm’s IT infrastructure. The department consists of specialists, such as programmers, systems analysts, project leaders, and information systems managers, and is often headed by a CIO.

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