Why

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Chapter 1 Why Information Systems
Matter www.prenhall.com/jessup
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• THE INFORMATION AGE IN WHICH YOU LIVE
• Information Age knowledge is power.
• Changing the Face of Business and organizations

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Opening Cases

• Technology
• Pervasive!! Ticketmaster (and many others!)
• Invasive?? Photo radar
• How can technology be inadvertently used for
  good and bad purposes?

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What are Information Systems?
- Multiple components - Built/used by people to
collect, create, and distribute useful data -
Used in organizational settings but evolving for
personal use
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Opening Concepts

• The Information Technology Revolution
• How is information technology changing the
  following industries?
• Airline
• Grocery
• Telephone
• Hotels
• Retail
• Universities

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Information Society Evolution Terms and Issues
Information Society
1960
2000

• Knowledge Worker (Peter Drucker 1959)
• Future trend in the workforce
• Professionals that create/modify/synthesize
  information as a fundamental part of their job
• Require higher education, receive higher
  compensation
• Term still generally accepted today (Drucker was
  right!)

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People as a Key Resource

• Technology-literate knowledge worker knows how
  and when to apply technology.
• Information-literate knowledge workers
• Define what information they need.
• Know how and where to obtain information.
• Understand the information.
• Use information to act appropriately for greatest
  advantage.

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Information Society Evolution Terms and Issues
Information Society
1960
2000

• Knowledge Society (Drucker - 1959)
• Describes next evolution of society
• Result of rise in numbers/importance of knowledge
  workers
• Education is the cornerstone of the knowledge
  society
• Drucker was right again!

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Information Society Evolution Terms and Issues
Information Society
1960
2000

• New Economy (Wired Magazine - Late 1990s)
• Like knowledge society but more descriptive
• People use brains more than hands
• Communications technology, other IT systems
  create global competition for all products and
  services
• Other names Digital Economy, Now Economy,
  E.conomy, Global Economy, Network Era, Internet
  Era

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Todays Economic Environment

• To be successful today
• Know your competition.
• Know your customers.
• Work with business partners.
• Know your organization.

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Todays Economic Environment

• Electronic commerce commerce accelerated and
  enhanced by IT.
• Telecommuting the use of communications
  technologies to work in a place other than a
  central location.
• Virtual Workplace a technology-enabled
  workplace. No boundaries.

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Todays Economic Environment

• The Now Economy - Immediate access to the
  ordering or use of products and services.
• For example, an ATM.
• M(mobile)-commerce e- commerce conducted over a
  wireless device.

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Todays Economic Environment

• Global economy customers, businesses,
  suppliers, distributors, and manufacturers all
  operate without regard to physical/geographical
  boundaries.
• Transnational firms produce and sell products
  and services in countries all over the world.

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Todays Economic Environment

• Digital economy uses electronic movement of all
  types of information such as
• Voice recognition
• Speech synthesization
• Biometrics
• Holograms

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The New Economy (NE) Societal Perspectives

• Perspective 1 Sims Taylor
• NE creates risks for Knowledge Workers
• Knowledge workers will be the first to be
  replaced by automation with information technology

• Perspective 2 Rikfin
• The overreliance on information technology has
  caused society to act hastily
• The result has been a loss of perspective

• Perspective 3 THE DIGITAL DIVIDE
• Those with access to information technology have
  great advantages over those that dont
• IT access will further polarize society

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Internet Access The US Dominates
The US growth is lower than other countries
however
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Information Systems Components Data

• The raw input for information systems
• Organized, processed and stored to support user
  information needs
• Basis for qualitative/quantitative analysis

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Information Systems Turn Data into Information
Data
Information

• Raw material
• Unformatted information
• Generally has no context

• Processed material
• Formatted information
• Data given context

Individual time cards for factory workers entered
into the payroll system
Department Labor Report, Project Status Report,
Employee Payroll Checks
Examples
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Information as a Key Resource Personal
Dimensions of Information

• The three personal dimensions of information
  include
• Time
• Location
• Form

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Information as a Key Resource Personal
Dimensions of Information

• Time dimension
• When you need it.
• Specific time period.
• Location dimension
• No matter where you are.
• Form dimension
• Useable and understandable.
• Free of errors.

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Information as a Key Resource Organizational
Dimensions of Information
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Information as a Key Resource Organizational
Dimensions of Information

• Strategic management provides overall direction
  and guidance.
• Tactical management develops the goals and
  strategies.
• Operational management manages and directs the
  day-to-day operations.
• Nonmanagement employees perform daily
  activities.

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Information as a Key Resource Organizational
Dimensions of Information

• Four flows of information
• Upward current status based on daily
  transactions (summarized/organized).
• Downward strategies, goals, and directives that
  are passed from higher to lower levels.
• Horizontal between functional business units
  and work teams.
• Outward communicated to external partners to
  conduct business.

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Information as a Key Resource Organizational
Dimensions of Information

• Information granularity the extent of
  informations detail.

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Information as a Key Resource Organizational
Dimensions of Information

• Types of information
• Internal information specific operational
  aspects of the organization.
• External information the environment
  surrounding the organization.
• Objective information something that is
  known/measurable.
• Subjective information something that is
  unknown/unmeasurable.

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Forms of Technology
Technology mechanical/electrical means to
enhance/ replace human manual operations
Examples production equipment, car ignition,
cash register
Information Technology machine technology
controlled by/using information for
operation Example a programmable robot receiving
instructions from a computer-based database
Computer- based Information Systems provide
information for persons or machines to make
decisions or control processes Example Budget
software, software to control CD burner, decision
support system
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Information Systems Components Hardware

• The physical components
• Processors, input, output, and storage devices
• Configurations include micro, mid-range,
  mainframe, and super computers

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Information Systems Components Software

• Instructions that operate the information system
• System software controls the hardware (WindowsXP)
  
• Application software users perform specific
  tasks to increase productivity (MS Excel)

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Information Systems Components Telecommunications

• Communication/connection component
• Allows two or more computers to interact
  (Internet)
• Utilizes standard protocols

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Information Systems Components People

• The single most important resource in any
  organization or information system

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Typical Careers in Information Systems
Careers in information systems require high
technical competence and generally pay well
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Executive Roles in Information Technology

• Manages External
• Stakeholder Relationships
• Sets Strategic Direction
• Defines High Level IT
• Needs for the Future

CEO Chief Executive Officer
COO Chief Operations Officer
CFO Chief Financial Officer
CIO Chief Information Officer

• Manages Accounting Finance
• Forecasts Needs and Secures Financial Resources
• Allocates Budget for IT Expenditures

• Manages Operations
• Allocates Resources
• Primary Consumer of IT within the Organization

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Executive Roles in Information Technology
CEO Chief Executive Officer
COO Chief Operations Officer
CFO Chief Financial Officer
CIO Chief Information Officer

• Manages IT Organization and Operations
• Forecasts IT Needs from Business Strategy
• Sets Direction for IT Architecture and
  Organization
• Plans, Designs and Delivers IT throughout the firm

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Three Distinct Competencies of IS Professionals

• Technical
• Knowledge of hardware, software, networking, and
  security
• Most IS professionals are not deep technical
  experts but can direct/manage others with the
  required technical skills

• Business
• Understand the nature of business including
  process, management, social, and communication
  domains
• Unique skills over those with only technical
  skills

• Systems
• Knowledge of approaches and methods, and critical
  thinking and problem solving skills necessary to
  build and integrate large information systems
• Unique skills over those with only technical
  skills

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IS Impact on Organizations New Opportunities
IRS Creates a Website and Allows eFiling
Modified IRS Tasks
New Website
Current IRS Tasks

• Post Office
• Stock Forms Publications

• Post Office
• Minimal Stocking of Forms/Pubs

• IRS Office
• Mail Forms/Publications
• Enter Tax Returns in System
• Conduct Audits

• IRS Office
• Minimal Mailing Forms/Pubs
• Reduced Entry of Tax Returns
• Conduct Audits (MORE!)

• IRS Hotline
• Answer FAQs
• Resolve Problems

• IRS Hotline
• Reduced Answering FAQs
• Resolve Problems

Activate eFiling
Implementation Results

• Reduced labor costs in forms distribution,
  hotline support, data entry from access to
  info/materials on the website and efiling
• Allow for redeployment of resources to primary
  activities including conducting audits and
  resolving problems

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Levels of the Organization and Traditional Systems

• Executive Information Systems

• Decision Support Systems (both levels)

• Management Information Systems

• Transaction Processing Systems

• Expert Systems

• Functional Area Information Systems
• (Across all levels within a function)

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Traditional Information System Functions
Transaction Processing Systems Management
Information Systems Executive Information
Systems Decision Support Systems Expert
Systems Functional Area Information Systems
Process day-to-day business event data data in an
organization (Operational level) Produce
information to help manage a firm or part of a
firm (Managerial) Provide very high-level,
aggregate information to support decisions
(Executive) Provide analysis tools and databases
to support quantitative decision making
(Multiple) Mimic human expert in a particular
area and provide answers or advice
(Operational) Support the activities within a
specific functional area of the firm (All)
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Other Information Systems - Not as Easy to
Categorize
Support a wide range of predefined, daily work
activities of individuals or groups (e.g. MS
Word) Enable People to communicate, collaborate,
and coordinate with each other (e.g.
email) Support the interaction between the firm
and its customers (e.g. sales force automation or
call center technology) Enable customers to buy
goods and service from a firms website.
(www.amazon.com) Support and integrate all
facets of the business (e.g. planning,
manufacturing, sales, etc.)
Office Automation System Collaboration
System Customer Relationship Management Electro
nic Commerce Enterprise Resource Planning System
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Roles and Goals of Information Technology

• Increase employee productivity
• Enhance decision making
• Improve team collaboration
• Create business partnerships and alliances
• Enable global reach
• Facilitate organizational transformation

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Competitive Advantage Dual Nature of Systems
FedEx Customer Website versus Denver
International Airport Baggage System
IS Gone Wrong (DIA)
IS That Works (FedEx)
Evaluation Factors
Strategic in Nature Established
Technology Capable Suppliers Structured
Implementation Capable IS Support
Yes Yes Yes Yes Yes
Yes No ?? No ??
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IS for Competitive Advantage Business Value

• Using IS to create/support business strategy is
  the most effective approach creating the most
  business value and competitive advantage

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IS Competitive Advantage Perspectives Who is
Right?

• IT Doesnt Matter - Car 2003
• As IT becomes more pervasive, technology becomes
  more standardized
• The same technologies are available to all
  competitors in an industry
• This produces no competitive advantage

• The Engine that Drives Success The Best
  Companies have the Models Because they Have the
  Best IT Strategies - Lundberg 2004
• Companies with bad business models fail
  regardless of IT systems or other capabilities
• Companies with good business models use IT to
  execute successful business models and succeed

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The Future of Information Systems Trends

• Ownership and Control (Old School IS)
• Large back logs of user requestsvery poor
  service
• Arrogance and feeling of ownership and control
  of IT
• Cant do attitudetold users why they couldnt
  do things
• Very poor relationship with users

T H E N

• Business managers became technology smart
• Systems evolved and became easier to develop
• Business organizations developed their own
  systems

• Consulting and Service Mentality (New School IS)
• IS is taking on an IT consulting role
• Service Mentalityusers are customers to be
  served
• Proactively support and problem solve for their
  customers
• Fundamentally believe that customers own the
  technology

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Organizational IT Roles

• Central IT Organization
• IT Planning
• Coordinating implementation
• Establishing IT methods and standards

• IT Business Unit Support
• Liaison between Central IT and the Business Unit
• Spends much time onsite at the Business Unit
• Reports to both orgs

• Business Unit
• Determining IS business requirements
• Supplying budget/personnel resources for
  implementations

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IS Role in Change Trends and Terms

• Downsizing (Sometimes called Rightsizing)
• Reducing organizational headcount to meet
  financial goals
• IT is lever to provide systems necessary to
  increase productivity

• Outsourcing
• Transferring business functions outside the
  organization to increase service levels/reduce
  operating cost
• IT is not immune to this trend/commodity. IT
  technical jobs will be increasingly transferred
  overseas
• IT must find better methods to manage offshore
  work

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The Future for IS
IS needs will continue to grow as technology
developments advance
Although outsourcing will continue, there will be
strong demand for IS professionals
There is a need for personnel that can speak the
language of technology and business and the
skills to manage projects and people

• Characteristics for success include continuous
  learning and growth, finding new ways to add
  value, flexibility, and developing unique skills