Business and Information Technology

8/14/2019 Business and Information Technology

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CHAPTER 1INTRODUCTION : BUSINESS AND

INFORMATION TECHNOLOGY


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Learning Objectives

Discuss business pressures and responsesin todays Information AgeDifferentiate between data and

information, and describe the

characteristics of high-quality data.Name and describe the components of an

information system.Describe the capabilities expected of

information systems in modernorganizations.Describe opportunities for strategic use of

information systems.


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Case : Blades Board & Skate rapid

growth The Business Problem retailer of ice and inline skates andsnowboards

the business needed a computer system that couldinstantly track sales and inventory at all of its stores The Solutionpoint-of-sales (POS) systems

computerized cash registers that use specialized softwareto record transaction data such as the stock numbers ofitems sold, cost , time of sale, and information on thecustomer, such as name

help retailers cut costs, increase profits, and servecustomers better by making the most of sales information


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Case (continued)

The Results

Quicker, more accurate, and moredetailed picture of sales and inventory

Tied into the firms accounting software

Order products from vendors only when

needed, decreasing the amount of

warehouse space


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Case (continued)

What have we learned from this case??

interrelating with other systems

permeating every business process

enabling tremendous gains in knowledge, productivity, andprofitability

A great variety of information can now be gathered ateach part of each business process, and informationcan be distributed throughout the organization, givingknowledge and insight for competitive decisionmaking and strategic advantage.

Information Technologies are woven intocomplex systems


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Business in the InformationAge:

PressuresGlobal Competition for Market and forLaborNeed for Real-time Operations

Changing Work ForceCustomer-Oriented OperationsTechnological Innovation and

ObsolescenceInformation OverloadSocial Responsibility of OrganizationsGovernment Regulation and DeregulationEthical IssuesOrganizational Responses to Business

Pressures in the Information Age


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Business in the InformationAge:

ResponsesStrategic SystemsCustomer Focus and Customer Servicemass customization

Continuous Improvement Efforts

just-in-time (JIT) total quality management (TQM)Business Process Reengineering

Empowering Employees and Fostering Collaborative Work

Team-based Structure

Business Alliances

supply chain management and enterprise resource planning (ERP)Electronic Commerce


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Business Pressures &Organizational Responses :

SummaryBusiness Pressures

Global Competition forMarket and LaborNeed for Real-timeOperationsChanging Work ForceCustomer OrientationTechnological Innovationand ObsolescenceInformation OverloadSocial ResponsibilityGovernment Regulation

and DeregulationEthical Issues

Organizational Responses

Strategic SystemsCustomer Focus andCustomer ServiceContinuous ImprovementEfforts (Just-in-Time,Total Quality

Management)Business ProcessReengineering (BPR)Team-based StructureBusiness Alliances

Electronic Commerce


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Why You Need to Learn About

Information TechnologyIT is Generally Interesting

IT Facilitates Work in Organizations

IT Offers Career Opportunities

IT is Used by All Departments

Locating real estate at nations bankUsing IT to strategic advantage at McDonalds

Canada

Using IT to manage human resources at the

City of Winnipeg in Manitoba, Canada


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Why You Need to Learn AboutInformation Technology

(continued)Web-based One-to-One Marketing at Liberty

Financial Companiesone-to-one Web Marketingaims to personalize a users online experience by offering

services and advertisements that are likely to appeal tothat person

Web-site operator can use the information it collects on

individuals to provide customized content

used Web-based marketing software to build itsdatabase of customer profiles

investors able to find exactly the information theyneed, quickly and easily from Web sites


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What is a Computer-Based

Information System?

Hardware SoftwareDatabase Network

Procedures

People

A computer-based information system (CBIS) is aninformation system that uses computer and oftentelecommunications technology to perform some orall of its intended tasks. An information technologyis a particular component of a system, like a personalcomputer, a printer, or a network. But fewinformation technologies are used alone. Rather,they are most effective combined into information

systems. The basic components of informationsystems are the following:


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Components of Computer-

based Information System

PEOPLE

HARDWARE SOFTWARE

DATABASE

NETWORK

PROCEDURES


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Capabilities of InformationSystems

Provide Fast and Accurate Transaction

Provide Large Capacity, Fast Access Storage

Provide Fast Communications (machine to machine, human to human)

Reduce Information Overload

Span Boundaries

Provide Support for Decision Making

Provide a Competitive Weapon

General Technological Trends for IT


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Strategic Questions andInformation Technology

AnswerInformation Technology and organizationalstrategy are inseparable

Porters strategic analysis model (5 forces

models)the relative power of buyers and suppliers,

threats from substitute products and services,and the ease or difficulty with which newcompetitors can enter the industry

Value chainthe discrete steps involved in the

manufacturing of a product or the provision ofa service


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Strategic Questions Can we use IT to gain leverage over our suppliers? To improve our

bargaining power? To reduce their bargaining power?

Can we use IT to reduce purchasing costs? To reduce our order

processing costs? To reduce suppliers billing costs?Can we use IT to identify alternative supply sources? To locate substitute

products? To identify lower-price suppliers?

Can we use IT to improve the quality of products and services we receivefrom suppliers? To reduce order lead times? To monitor quality? Toleverage supplier service data for better service to our customers?

Can we use IT to give us access to vital information about our suppliersthat will help us reduce our costs? To select the most appropriateproducts? To negotiate price breaks? To monitor work progress andreadjust our schedules? To assess quality control?

Can we use IT to give our suppliers information important to them thatwill in turn yield a cost, quality, or service reliability advantage to us? To

conduct electronic exchange of data to reduce their costs? To providemaster roduction schedule chan es?

Strategic Questions (continued)


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Strategic Questions(continued)

Strategic Questions Can we use IT to reduce our customers cost of doing business with us? Toreduce paperwork for ordering or paying? To provide status informationmore rapidly? To reduce our costs and prices?

Can we provide some unique information to our customers that will makethem buy our products/service? Can we provide better billing or accountstatus data? Can we provide options to switch to higher-value substitutes?Can we be first with an easy-to-duplicate feature that will provide valuesimply by being first?

Can we use IT to increase our customers costs of switching to a new

supplier? Can we provide proprietary hardware or software? Can wemake customers dependent upon us for their data? Can we make ourcustomer service more personalized?

Can we use external database sources to learn more about our customersand discover possible market niches? To relate buying from us to buyingother products? To analyze customers interactions with us and questions

to us to develop customized products/services or methods of responding tocustomer needs?


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Strategic Questions (continued)

Strategic QuestionsCan we use IT to help our customers increase their revenues? To provide

proprietary market data to them? To support their access to their markets

through our channels?

Can we use IT to raise the entry barriers of new competitors into ourmarkets? To redefine product features around IT components? To

provide customer services through IT?

Can we use IT to differentiate our products/services? To highlight existing

differentiations? To create new differentiations?

Can we use IT to make a preemptive move over our competition? To offersomething new because we have proprietary data?

Can we use IT to provide substitutes? To simulate other products? To

enhance our existing products?

Can we use IT to match an existing competitors offerings? Are competitor

products/services based on unique IT capabilities or technologies andcapabilities generally available?


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Information TechnologyAnswer (continued)

Information Technology Answers Consolidated Stores invested $80 million inKBToys.com, a site it will jointly own with startup

BrainPlay.comPetSmart plans to invest $16 million in 1999 in

PetSmart.com, a site it will jointly own with startupPetJungle.com

Toys R Us invested $80 million to relaunchToysrus.com, which will be run as a standalone

business

CVS spent $30 million to buy online pharmacySoma.com


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The Plan of This BookPart 1 INFORMATION TECHNOLOGY IN THE BUSINESS ENVIRONMENT1. Introduction : Business and Information Technology2. Organizational Structure and Information Technology

Part 2 INFORMATION TECHNOLGY INFRASTRUCTURE3. Computer Hardware

4. Computer Software5. Managing Organizational Data and Information6. Telecommunications and Networks7. The Internet and Intranets

Part 3 APPLYING INFORMATION TECHNOLOGY FOR COMPETITIVE ADVANTAGE

8. Interorganizational and Global Information Systems

9. Functional and Enterprise Systems10. Data, knowledge, and Decision Support11. Intelligent Systems in Business12. Electronic Commerce13. Strategic Information Systems and Reorganization

Part 4 DEVELOPING AND MANAGING INFORMATION SYSTEMS

14. Information Systems Development15. Implementing IT:Ethics, Impacts, and Security


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Whats in IT for Me?

For AccountingInformation systems capture, organize,

analyze, and disseminate data and

information throughout modernorganizations

For FinanceInformation systems turn financial world on

speed, volume, and accuracy ofinformation flow


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Whats in IT for Me?(continued )

For MarketingThe Internet and the World Wide Web have

opened an entirely new channel formarketing and provided much closer contactbetween the consumer and the supplier

For Production/Operations ManagementEvery process in a product or services value

chain can be enhanced by the proper use ofcomputer-based information systems


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Whats in IT for Me?(continued )

For Human Resource ManagementEmployees can handle much of their personal

business themselves, and the Internet makes a

tremendous amount of information available tothe job seeker

For Management Information Systems (MIS)The opportunities for those planning a career in

MIS grows as fast as the adoption of informationtechnologies into organizations everywhere

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Business and Information Technology