IS1128

L1 Introduction
Sem 1, AY2024/2025
Yang Lu
Learning Objectives
• How is IT/IS transforming business?
• Academic Approach

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How IT/IS Are Transforming
Business?
▪ Global spending on information
technology (IT) and IT services is
steadily increasing.
▪ Organizational, management, and
cultural changes are often required
for firms to derive full business
value from IT investments

Source: [Link]
segment/#:~:text=The%20global%20information%20technology%20(IT,trillion%20U.S.%20dollars%20in%20202
1.

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IT/IS Investment
▪ Investing in information technology does not guarantee good returns.

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Dimensions of IT/IS
▪ IT/IS are more than computers!
▪ Dimensions
▪ Organizations
▪ E.g., structure, culture, team capability
▪ Technology
▪ Management
▪ E.g., people, teamwork, incentive programs

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Strategic Business Objectives of
IT/IS
▪ Firms invest heavily in IT/IS to achieve six strategic business objectives:
▪ Survival
▪ Operational excellence
▪ New products, services, and business models
▪ Customer and supplier intimacy
▪ Improved decision making
▪ Competitive advantage

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Strategic Business Objectives of
IT/IS (cont.)
▪ Survival
▪ Information technologies as necessity of business
▪ Industry-level changes
▪ E.g., Citibank’s introduction of ATMs
▪ Societal-level changes
▪ E.g., Telecommuting systems/tools

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Innovation Diffusion Model
▪ Roger’s bell curve
▪ Describe patterns in the way consumers adopt technology products

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Strategic Business Objectives of
IT/IS (cont.)
▪ Operational excellence
▪ Improvement of efficiency and effectiveness to attain higher profitability
▪ IT/IS are an important tool in achieving greater efficiency and productivity
▪ Examples:

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Business Processes and IT/IS
▪ Information technology enhances business processes by:
▪ Automating: doing things faster
▪ Automating steps that were manual
▪ Learning: doing things better
▪ Organizational learning
▪ Exploitation
▪ Incremental learning focused on diffusion, refinement, and reuse of existing
knowledge
▪ Exploration
▪ The development of new knowledge or replacing existing content within the
organization’s memory
▪ Strategizing: doing things smarter
▪ A firm’s plan to accomplish its mission and goals as well as to gain or sustain competitive
advantage over rivals

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Business Processes and IT/IS (cont.)
▪ Business value added from automating, learning, and strategizing with
information systems

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Strategic Business Objectives of
IT/IS (cont.)
▪ Operational excellence
▪ Example: Walmart Retail Link

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Discussion: Walmart Retail Link
▪ Bullwhip effect in supply chain management
▪ Information about product demand gets distorted as it passes from one entity to
next across supply chain

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 ▪ Does Walmart Retail Link create a
Discussion win-win situation for merchant and
suppliers?

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Discussion
▪ Walmart Retail Link
▪ System problem vs
business/management problem

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Strategic Business Objectives of
IT/IS (cont.)
▪ New products, services, and business models
▪ IT/IS enable firms to create new products, services, and business models
▪ Business model: how a company produces, delivers, and sells its products and
services
▪ Example: Netflix, sharing economy

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Discussion: Netflix

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Strategic Business Objectives of
IT/IS (cont.)
▪ Customer and Supplier Intimacy
▪ Customers who are served well become
repeat customers who purchase more
▪ Close relationships with suppliers result in
lower costs
▪ E.g., CRM solutions

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Strategic Business Objectives of
IT/IS (cont.)
▪ Improved Decision Making
▪ Real-time and accurate information
▪ Better forecasts
▪ Better planning
▪ Faster response time
▪ Example:
▪ Starbucks GIS

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Discussion: Starbucks
▪ How can IT/IS facilitate Starbucks’ decision-making on the local coffee
demand estimation?

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Strategic Business Objectives of
IT/IS (cont.)
▪ Competitive advantage
▪ Advantages over competitors
▪ E.g.,
▪ Delivering better performance
▪ Price competitive
▪ “Innovative” brand image
▪ E.g., Amazon Go

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Strategic Business Objectives of
IT/IS (cont.)
▪ Growing interdependence between:
▪ Ability to use information technology
▪ Ability to implement corporate strategies and achieve
corporate goals

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Academic Approach
▪ Technical approach
▪ Emphasize mathematically based models
▪ Computer science, management science, operations research

▪ Behavioral approach
▪ Behavioral issues (strategic business integration, implementation, etc)
▪ Psychology, economic, sociology
▪ E.g., Hawthorne Effect

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Our Approach
▪ Sociotechnical view
• Optimal organizational performance achieved by jointly optimizing both social and
technical systems used in production
• Helps avoid purely technological approach

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Next week
▪ L2 Information Systems and Organizations

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