Chapter 1 : Information Systems in Business Today Management Information System (CSC408) Erny Arniza Ahmad Faculty of Computer and Mathematical Sciences Universiti Teknologi MARA (UiTM) Kedah 

Learning Objective #2 2 Role of IS in Business Today • How are information systems transforming business? • Why are they so essential for running and managing a business today? Perspective on IS •What is an information system? •How does it work? •What are its management, organization, and technology components. •Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? Approaches to IS • What academic disciplines are used to study information systems? • How does each contribute to an understanding of information systems? 

What Is an Information System? Information Technology (IT) Information System (IS) • consists of all the hardware and software that a firm needs to use in order to achieve its business objectives. • defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. 

IT and IS https://www.youtube.com/watch?v=mPmqAQeDHyY 

Data and Information Data Streams of raw facts. Information Data shaped into meaningful form. 

Data and Information https://www.youtube.com/watch?v=dJkB_ITY1pE 

Data and Information 

What is an Information System? 8 https://www.youtube.com/watch?v=RdgFoFPTckw 

What Is an Information System? • Activities of information systems to produce information organizations need Input Captures raw data from organization or external environment Processing Converts raw data into meaningful form Output Transfers processed information to people or activities that use it Feedback Output is returned to appropriate members of organization to help evaluate or correct input stage 

Computer What Is an Information System? Computer Program Information System Input Input Input 

Information System Activities 11 https://www.youtube.com/watch?v=G7eKpCon1og&t=2s 

Persware • There is another component that should be considered, and that is the people side or “persware.” • Add the “persware” angle with good feedback and you have the beginnings of information literacy. 12 Persware Hardware Software 

Persware 13 http://www.answers.com/Q/What_is_persware?#slide=6 

Functions of an Information System 

Functions of an Information System 15 https://www.youtube.com/watch?v=qiLXJ0lhN2g&t=64s 

Information Systems Are More Than Computers 

IS Dimensions 17 IS Dimensions Organizational People Structure Business Process Politics Culture Management Technology Information systems are an integral part of organizations. 

IS Organizational Dimensions Organizational dimension Hierarchy of authority, responsibility Professional employees Technical employees Operational personnel Managerial employees Business functions Sales and marketing Manufacturing and production Finance and accounting Human resources Business processes Business culture Organizational politics 

Levels in a Firm make long-range decisions carry out the plans and goals set by senior managers handle the day-to-day operations of the company Knowledge workers help create new knowledge for the organization. Data workers help process the paperwork necessary to keep an organization functioning. Production or service workers actually produce the product and deliver the service Senior Management Middle Management Operational Management 

IS Management Dimensions 20 IS Dimensions Organizational Management Business challenges Organizational strategy formation New products and services creation Re-creating the organization Technology IT helps managers in designing and deliver new products and services and redirecting and redesigning their organizations. 

IS Technology Dimensions 21 IS Dimensions Organizational Management Technology Computer hardware and software Data management technology Networking and telecommunications technology IT Infrastructure 

IS Technology Dimensions Technology Hardware Software Data Management Technology Networking & Telecommunication Technology Network Internet Intranet Extranet World Wide Web IT Infrastructure Computer hardware the physical equipment used for input, processing, and output activities in an information system X Computer software consists of the detailed, preprogramed instructions that control and coordinate the computer hardware components in an information system. X Data Management Technology consists of the software governing the organization of data on physical storage media. X Networking & Telecommunication Network consisting of both physical devices and software, links the various pieces of hardware and transfers data from one physical location to another. X Network links two or more computers to share data or resources, such as a printer. X Internet the world’s largest and most widely used network X Intranet Internal corporate networks based on Internet technology X Extranet private intranets extended to authorized users outside the organization X World Wide Web 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. X IT Infrastructure platform, on which the firm can build its specific information systems. X 

Business Perspectives on IS Information system is instrument for creating value Investments in information technology will result in superior returns: Productivity increases Revenue increases Superior long-term strategic positioning 

Business Perspectives 24 Three ways an information system can add value to a business: Increase revenue Decrease costs Provide information that helps managers make better decisions Help make business processes more efficient Increase profitability 

Business Perspectives Business information value chain • Raw data acquired and transformed through stages that add value to that information • Value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits Business perspective • Information systems are part of a series of value-adding activities • Calls attention to organizational and managerial nature of information systems 

Business Perspectives 

Business Perspectives 

Business Perspectives • Investing in information technology does not guarantee good returns. • There is considerable variation in the returns firms receive from systems investments. • Factors: – Adopting the right business model – Investing in complementary assets (organizational and management capital) 

Complimentary Assets • Assets required to derive value from a primary investment • Example: Invest in technology and the people to make it work properly Complementary assets • Firms supporting technology investments with investment in complementary assets receive superior returns Organizational and management capital 

Complimentary Assets Organizational assets • Supportive culture that values efficiency and effectiveness • Appropriate business model • Efficient business processes • Decentralized authority Managerial assets • Strong senior management support for technology investment and change • Incentives for management innovation • Teamwork and collaborative work environments Social assets • The Internet and telecommunications infrastructure • IT-enriched educational programs raising labor force computer literacy • Standards (both government and private sector) 

Point #2 31 Information literacy is more than just clicking a mouse, pounding the computer keyboard, or surfing the Web. It’s about integrating the various elements of an organization, technical and nontechnical, into a successful enterprise. A successful manager must concentrate on all three parts of the information systems triangle (hardware, software, and persware) and integrate them into a single, cohesive system that serves the needs of the organization, the wants of the customer, and the desires of the employees; the more complex the system, the harder to manage, but the greater the payoff. Complementary assets are comprised from organization, managerial, and social assets of a firm. Learning Objective #2 1 Role of IS in Business Today • How are information systems transforming business? • Why are they so essential for running and managing a business today? Perspective on IS • What is an information system? • How does it work? • What are its management, organization, and technology components. • Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? Approaches to IS • What academic disciplines are used to study information systems? • How does each contribute to an understanding of information systems? 

Reference Kenneth C. Laudon And Jane P. Laudon, Management Information Systems: Managing the Digital Firm, 14th edition (Global Edition), Pearson Prentice Hall, 2016. 32