IS 402E

Information Technology Management

Instructors: Tuba BAKICI, Hadj BARKAT, Arnaud

POISSON, Pantelis FRANGOUDIS

Rennes, September 2016

1
OUTLINE

• The Role of Information Systems in Business Today

• Perspectives on Information Systems

• Contemporary Approaches to Information Systems

• Business Processes and Information Systems

• Types of Information Systems

• Systems for Collaboration and Social Business

• The Information Systems Function in Business

2
LEARNING OBJECTIVES

• Explain why information systems are so essential in

business today
• Understand the effects of information systems on
business and their relationship to globalization
• Define an information system and describe its
management, organization, and technology components
• Explain what is meant by a sociotechnical systems
perspective

3
Shortening Lines At Disney World: Technology To The Rescue

• Problem: Long lines limit how many rides, shops, and

restaurants a customer can visit during a stay.
• Solutions: Enhance customer satisfaction and spending
by using information systems to spot gridlock and improve
crowd flow.
• Operational Command Center uses video cameras, digital
maps, computer programs, and mobile apps to monitor
attendance, registers, and spot and prevent gridlock
• Demonstrates IT’s role in increasing value and revenue in
any business.
• Illustrates the potential for technology to improve customer
experience.
THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

How information systems are transforming business

• Emerging mobile digital platform
• Growing business use of “big data”
• Growth in cloud computing
Globalization opportunities
• Internet has drastically reduced costs of operating on
global scale
• Increases in foreign trade, outsourcing
• Presents both challenges and opportunities
5
 Information Technology Capital Investment

Information technology capital investment, defined as hardware, software, and

communications equipment, grew from 32 percent to 52 percent of all invested capital
between 1980 and 2009.
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INTERACTIVE SESSION:RUNNING THE BUSINESS FROM THE PALM
OF YOUR HAND

• What kinds of applications are described in the case? What business

functions do they support? How do they improve operational
efficiency and decision making?

• Identify the problems that businesses in this case study solved by

using mobile digital devices.

• What kinds of businesses are most likely to benefit from equipping

their employees with mobile devices?

• Discuss the implications of this statement: “The iPhone is not a game

changer, it’s an industry changer.”

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THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

In the emerging, fully digital firm:

• Significant business relationships are digitally enabled and
mediated.
• Core business processes are accomplished through digital
networks.
• Key corporate assets are managed digitally.

Digital firms offer greater flexibility in organization and

management.
• Time shifting, space shifting

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THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

• Growing interdependence between ability to use

information technology and ability to implement
corporate strategies and achieve corporate goals
• Business firms invest heavily in information systems
to achieve six strategic business objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival
THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

The Interdependence Between Organizations and Information Technology

In contemporary systems there is a growing interdependence between a firm’s information

systems and its business capabilities. Changes in strategy, rules, and business processes
increasingly require changes in hardware, software, databases, and telecommunications. Often,
what the organization would like to do depends on what its systems will permit it to do.
THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

Operational excellence:

• Improvement of efficiency to attain higher profitability

• Information systems, technology an important tool in

achieving greater efficiency and productivity

• Walmart’s Retail Link system links suppliers to stores

for superior replenishment system
THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

New products, services, and business models:

• Business model: describes how company produces,

delivers, and sells product or service to create wealth

• Information systems and technology a major

enabling tool for new products, services, business
models

• Examples: Apple’s iPad, Google’s Android OS,

and Netflix
THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

Customer and supplier intimacy:

• Serving customers well leads to customers returning, which

raises revenues and profits.

• Example: High-end hotels that use computers to track

customer preferences and used to monitor and customize
environment

• Intimacy with suppliers allows them to provide vital inputs,

which lowers costs.

• Example: JCPenney’s information system which links sales

records to contract manufacturer

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THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

Improved decision making

• Without accurate information:
• Managers must use forecasts, best guesses, luck
• Results in:
– Overproduction, underproduction
– Misallocation of resources
– Poor response times
• Poor outcomes raise costs, lose customers
Example: Verizon’s Web-based digital dashboard to
provide managers with real-time data on customer
complaints, network performance, line outages, and so
on
THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

Competitive advantage

• Delivering better performance

• Charging less for superior products

• Responding to customers and suppliers in real time

• Examples: Apple, Walmart, UPS

THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY

Survival

• Information technologies as necessity of business

• Industry-level changes

Example: Citibank’s introduction of ATMs

• Governmental regulations requiring record-

keeping

Examples: Toxic Substances Control Act, Sarbanes-

Oxley Act
PERSPECTIVES ON INFORMATION SYSTEMS

• Information system:

• Set of interrelated components

• Collect, process, store, and distribute information

• Support decision making, coordination, and control

• Information vs. data

• Data are streams of raw facts.

• Information is data shaped into meaningful form.

 Data and Information

Raw data from a supermarket checkout counter can be processed and organized to produce
meaningful information, such as the total unit sales of dish detergent or the total sales revenue from
dish detergent for a specific store or sales territory.
PERSPECTIVES ON INFORMATION SYSTEMS

Three activities of information systems 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
PERSPECTIVES ON INFORMATION SYSTEMS

• Feedback:

Output is returned to appropriate members of

organization to help evaluate or correct input stage.

• Computer/Computer program vs. information system

Computers and software are technical foundation and

tools, similar to the material and tools used to build a
house.
 Functions of an Information System

An information system
contains information about
an organization and its
surrounding environment.
Three basic activities—
input, processing, and
output—produce the
information organizations
need. Feedback is output
returned to appropriate
people or activities in the
organization to evaluate
and refine the input.
Environmental actors,
such as customers,
suppliers, competitors,
stockholders, and
regulatory agencies,
interact with the
organization and its
information systems.
 Information Systems Are More Than Computers

Using information
systems effectively
requires an
understanding of the
organization,
management, and
information technology
shaping the systems. An
information system
creates value for the firm
as an organizational and
management solution to
challenges posed by the
environment.
PERSPECTIVES ON INFORMATION SYSTEMS

Organizational dimension of information systems

 Hierarchy of authority, responsibility

• Senior management
• Middle management
• Operational management
• Knowledge workers
• Data workers
• Production or service workers
 Levels in a Firm

Business organizations
are hierarchies
consisting of three
principal levels: senior
management, middle
management, and
operational
management.
Information systems
serve each of these
levels. Scientists and
knowledge workers
often work with middle
management.
PERSPECTIVES ON INFORMATION SYSTEMS

Organizational dimension of information systems (cont.)

 Separation of business functions

• Sales and marketing
• Human resources
• Finance and accounting
• Manufacturing and production
 Unique business processes

 Unique business culture

 Organizational politics
PERSPECTIVES ON INFORMATION SYSTEMS

Management dimension of information systems

• Managers set organizational strategy for

responding to business challenges

• In addition, managers must act creatively:

– Creation of new products and services

– Occasionally re-creating the organization

PERSPECTIVES ON INFORMATION SYSTEMS

Technology dimension of information systems

• Computer hardware and software

• Data management technology

• Networking and telecommunications technology

• Networks, the Internet, intranets and extranets, World

Wide Web

• IT infrastructure: provides platform that system is

built on
INTERACTIVE SESSION: UPS COMPETES GLOBALLY WITH I.T.

• What are the inputs, processing, and outputs of UPS’s

package tracking system?
• What technologies are used by UPS? How are these
technologies related to UPS’s business strategy?
• What business objectives do UPS’s information systems
address?
• What would happen if these systems were not available?

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PERSPECTIVES ON INFORMATION SYSTEMS

Dimensions of UPS tracking system

Organizational:

• Procedures for tracking packages and managing

inventory and provide information

Management:

• Monitor service levels and costs

Technology:

• Handheld computers, bar-code scanners, networks,

desktop computers, and so on
PERSPECTIVES ON INFORMATION SYSTEMS

Business perspective on information systems:

• 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
PERSPECTIVES ON INFORMATION SYSTEMS

• 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:

• Calls attention to organizational and managerial nature of

information systems
 The Business Information Value Chain

From a business perspective, information systems are part of a series of value-adding activities for
acquiring, transforming, and distributing information that managers can use to improve decision
making, enhance organizational performance, and, ultimately, increase firm profitability.
PERSPECTIVES ON INFORMATION SYSTEMS

• 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)
 Variation in Returns on Information Technology Investment

Although, on average,
investments in
information technology
produce returns far
above those returned
by other investments,
there is considerable
variation across firms.
PERSPECTIVES ON INFORMATION SYSTEMS

Complementary assets:

• Assets required to derive value from a primary

investment

• Firms supporting technology investments with

investment in complementary assets receive superior
returns

• Example: Invest in technology and the people to make

it work properly
PERSPECTIVES ON INFORMATION SYSTEMS

Complementary assets include:

• Organizational assets, for example:

• Appropriate business model
• Efficient business processes
• Managerial assets, for example:
• Incentives for management innovation
• Teamwork and collaborative work environments
• Social assets, for example:
• The Internet and telecommunications infrastructure
• Technology standards
 CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS

The study of information

systems deals with
issues and insights
contributed from
technical and behavioral
disciplines.
CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS

• Technical approach

• Emphasizes mathematically based models

• Computer science, management science, operations

research

• Behavioral approach

• Behavioral issues (strategic business integration,

implementation, etc.)

• Psychology, economics, sociology

CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS

Management Information Systems

• Combines computer science, management science,
operations research and practical orientation with
behavioral issues

Four main actors

• Suppliers of hardware and software
• Business firms
• Managers and employees
• Firm’s environment (legal, social, cultural context)
CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS

Sociotechnical view

• Optimal organizational performance achieved by

jointly optimizing both social and technical systems
used in production

• Helps avoid purely technological approach

 A Sociotechnical Perspective on Information Systems

In a sociotechnical perspective, the performance of a system is optimized when both the technology
and the organization mutually adjust to each other until a satisfactory fit is obtained.
IS 402E Information Technology Management

Global E-business and Collaboration

LEARNING OBJECTIVES

• Define and describe business processes and their relationship to

information systems.
• Evaluate the role played by systems serving the various levels of
management in a business and their relationship to each other.
• Explain how enterprise applications improve organizational
performance.
• Explain the importance of collaboration and teamwork in
business and how they are supported by technology.
• Assess the role of the information systems function in a business.

43
TELUS EMBRACES SOCIAL LEARNING

Problem: Need to capture employee knowledge as 40% of

workforce nears retirement
Solutions: New technology for collaborative knowledge sharing
Microsoft SharePoint Server 3010 provided companywide
platform for collaboration, knowledge acquisition and transfer, and
social tools
• Demonstrates IT’s role in collaboration and documenting
knowledge
• Illustrates the need for changing organizational culture
and business processes to use information systems
effectively
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BUSINESS PROCESSES AND INFORMATION SYSTEMS

Business processes:

• Flows of material, information, knowledge

• Sets of activities, steps

• May be tied to functional area or be cross-functional

• Businesses: Can be seen as collection of business

processes

• Business processes may be assets or liabilities

BUSINESS PROCESSES AND INFORMATION SYSTEMS

Examples of functional business processes

Manufacturing and production

• Assembling the product
Sales and marketing
• Identifying customers
Finance and accounting
• Creating financial statements
Human resources
• Hiring employees
 The Order Fulfillment Process

Fulfilling a customer order involves a complex set of steps that requires the close coordination of
the sales, accounting, and manufacturing functions.
BUSINESS PROCESSES AND INFORMATION SYSTEMS

Information technology enhances business

processes by:
Increasing efficiency of existing processes
• Automating steps that were manual
Enabling entirely new processes
• Change flow of information
• Replace sequential steps with parallel steps
• Eliminate delays in decision making
• Support new business models
TYPES OF INFORMATION SYSTEMS

Transaction processing systems

• Serve operational managers and staff
• Perform and record daily routine transactions
necessary to conduct business
• Examples: sales order entry, payroll, shipping
• Allow managers to monitor status of operations and
relations with external environment
• Serve predefined, structured goals and decision
making
 A Payroll TPS

A TPS for payroll

processing captures
employee payment
transaction data (such
as a time card). System
outputs include online
and hard-copy reports
for management and
employee paychecks.
TYPES OF INFORMATION SYSTEMS

Business intelligence

• Data and software tools for organizing and analyzing data

• Used to help managers and users make improved decisions

Business intelligence systems

• Management information systems

• Decision support systems

• Executive support systems

INTERACTIVE SESSION: CAN AIRLINES SOLVE THEIR BAGGAGE
HANDLING PROBLEMS?

• What types of transactions are handled by baggage handling

systems?
• What are the management, organization, and technology
components of baggage handling systems?
• What is the problem these baggage handling systems are
trying to solve? Discuss the business impact of this problem.
Are today’s baggage handling systems a solution to this
problem?
• What kinds of management reports can be generated from the
data from these systems?

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TYPES OF INFORMATION SYSTEMS

Management information systems

• Serve middle management
• Provide reports on firm’s current performance, based
on data from TPS
• Provide answers to routine questions with predefined
procedure for answering them
• Typically have little analytic capability
How MIS Obtain Their Data from the Organization’s TPS

In the system illustrated by this diagram, three TPS supply summarized transaction data to
the MIS reporting system at the end of the time period. Managers gain access to the
organizational data through the MIS, which provides them with the appropriate reports.
 Sample MIS Report

This report, showing summarized annual sales data, was produced by the MIS in Figure 2-3.
TYPES OF INFORMATION SYSTEMS

Decision support systems

• Serve middle management
• Support non-routine decision making
• Example: What is the impact on production
schedule if December sales doubled?
• May use external information as well TPS / MIS
data
• Model driven DSS
• Voyage-estimating systems
• Data driven DSS
• Intrawest’s marketing analysis systems
 Voyage-Estimating Decision Support System

This DSS operates on a powerful PC. It is used daily by managers who must develop
bids on shipping contracts.
TYPES OF INFORMATION SYSTEMS

Executive support systems

• Support senior management
• Address non-routine decisions
• Requiring judgment, evaluation, and insight
• Incorporate data about external events (e.g. new
tax laws or competitors) as well as summarized
information from internal MIS and DSS
• Example: Digital dashboard with real-time view of
firm’s financial performance: working capital,
accounts receivable, accounts payable, cash flow,
and inventory
INTERACTIVE SESSION: PILOTING PROCTER & GAMBLE FROM
DECISION COCKPITS

• What management, organization, and technology issues

had to be addressed when implementing Business
Sufficiency, Business Sphere, and Decision Cockpits?
• How did these decision-making tools change the way the
company ran its business? How effective are they? Why?
• How are these systems related to P&G’s business
strategy?

59
TYPES OF INFORMATION SYSTEMS

Enterprise applications
• Systems for linking the enterprise
• Span functional areas
• Execute business processes across firm
• Include all levels of management
• Four major applications:
• Enterprise systems
• Supply chain management systems
• Customer relationship management systems
• Knowledge management systems
 Enterprise Application Architecture

Enterprise applications
automate processes that
span multiple business
functions and
organizational levels
and may extend outside
the organization.
TYPES OF INFORMATION SYSTEMS

Enterprise systems
• Collects data from different firm functions and
stores data in single central data repository
• Resolves problem of fragmented data
• Enable:
• Coordination of daily activities
• Efficient response to customer orders (production,
inventory)
• Help managers make decisions about daily
operations and longer-term planning
TYPES OF INFORMATION SYSTEMS

Supply chain management (SCM) systems

• Manage firm’s relationships with suppliers
• Share information about:
• Orders, production, inventory levels, delivery of
products and services
• Goal:
• Right amount of products to destination with least
amount of time and lowest cost
TYPES OF INFORMATION SYSTEMS

Customer relationship management systems:

• Provide information to coordinate all of the
business processes that deal with customers
• Sales
• Marketing
• Customer service
• Helps firms identify, attract, and retain most
profitable customers
TYPES OF INFORMATION SYSTEMS

Knowledge management systems (KMS)

• Support processes for capturing and applying
knowledge and expertise
• How to create, produce, deliver products and
services
• Collect internal knowledge and experience within
firm and make it available to employees
• Link to external sources of knowledge
TYPES OF INFORMATION SYSTEMS

Also used to increase integration and expedite the flow

of information
Intranets:
• Internal company Web sites accessible only by
employees
Extranets:
• Company Web sites accessible externally only to
vendors and suppliers
• Often used to coordinate supply chain
TYPES OF INFORMATION SYSTEMS

E-business
• Use of digital technology and Internet to drive major
business processes
E-commerce
• Subset of e-business
• Buying and selling goods and services through
Internet
E-government:
• Using Internet technology to deliver information and
services to citizens, employees, and businesses
SYSTEMS FOR COLLABORATION AND TEAMWORK

Collaboration:
• Short-lived or long-term
• Informal or formal (teams)

Growing importance of collaboration:

• Changing nature of work
• Growth of professional work—“interaction jobs”
• Changing organization of the firm
• Changing scope of the firm
• Emphasis on innovation
• Changing culture of work
 SYSTEMS FOR COLLABORATION AND TEAMWORK

Social business
• Use of social networking platforms, internal and
external
• Engage employees, customers, and suppliers
• Goal is to deepen interactions and expedite
information sharing
• “Conversations”
• Requires information transparency
• Driving the exchange of information without intervention
from executives or others
SYSTEMS FOR COLLABORATION AND TEAMWORK

Business benefits of collaboration and teamwork

• Investments in collaboration technology can bring
organization improvements, returning high ROI
• Benefits:
• Productivity
• Quality
• Innovation
• Customer service
• Financial performance
– Profitability, sales, sales growth
Requirements for Collaboration

Successful collaboration requires an

appropriate organizational structure and
culture, along with appropriate collaboration
technology.
SYSTEMS FOR COLLABORATION AND TEAMWORK

Building a collaborative culture and business

processes
• “Command and control” organizations
• No value placed on teamwork or lower-level
participation in decisions
• Collaborative business culture
• Senior managers rely on teams of employees
• Policies, products, designs, processes, and
systems rely on teams
• The managers purpose is to build teams
SYSTEMS FOR COLLABORATION AND TEAMWORK

Tools for collaboration and teamwork

• E-mail and instant messaging
• Wikis
• Virtual worlds
• Collaboration and social business platforms
• Virtual meeting systems (telepresence)
• Google Apps/Google sites
• Cyberlockers
• Microsoft SharePoint
• Lotus Notes
• Enterprise social networking tools
SYSTEMS FOR COLLABORATION AND TEAMWORK

Enterprise social networking software capabilities

• Profiles

• Content sharing

• Feeds and notifications

• Groups and team workspaces

• Tagging and social bookmarking

• Permissions and privacy

SYSTEMS FOR COLLABORATION AND TEAMWORK

Two dimensions of collaboration technologies

• Space (or location)—remote or co-located
• Time—synchronous or asynchronous

Six steps in evaluating software tools

1. What are your firm’s collaboration challenges?
2. What kinds of solutions are available?
3. Analyze available products’ cost and benefits.
4. Evaluate security risks.
5. Consult users for implementation and training issues.
6. Evaluate product vendors.
 The Time/Space Collaboration Tool Matrix

Collaboration technologies can be classified in terms of whether they support interactions at the
same or different time or place or whether these interactions are remote or co-located.
THE INFORMATION SYSTEMS FUNCTION IN BUSINESS

Information systems department:

• Formal organizational unit responsible for
information technology services
• Often headed by chief information officer (CIO)
• Other senior positions include chief security officer
(CSO), chief knowledge officer (CKO), chief
privacy officer (CPO)
• Programmers
• Systems analysts
• Information systems managers
THE INFORMATION SYSTEMS FUNCTION IN BUSINESS

End users
• Representatives of other departments for whom
applications are developed
• Increasing role in system design, development
IT Governance:
• Strategies and policies for using IT in the
organization
• Decision rights
• Accountability
• Organization of information systems function
• Centralized, decentralized, and so on