Intake XXII - 2023

MBA 11603 – Management Information Systems

Managing information systems as strategic resources

Lesson outline

•Introduction
•Information Systems in global business today
•Digital Transformation
•IS roles in agile organization with three pillars
•Information Systems, Organizations and Strategy
(how IS use as strategy)
 Management Information Systems
• Management and use of information systems that help organizations
to achieve their strategies
• MIS is the study of people, technology, and organizations (processes)
and relationships among them. MIS is a people-oriented field with an
emphasis on service through technology
 Introduction
• IT has become more affordable and pervasive than ever before
• IT has become a critical resource that draws significant
investments for business, not-for-profit, and governmental
organizations
• It is now clear that the success of every enterprise, department,
function and employee depends increasingly on IT
• It is hard these days to escape the hype and publicity
surrounding information technology (IT) and its business
applications
Digital Transformation
• Refers to the process of leveraging digital technologies
to fundamentally change how business operate,
deliver value to customers and compete in the
market.
• It involves adopting new digital tools, strategies and
processes to streamline operations, enhance
customer experience and drive innovation.
 The Digital Revolution
• Technology fundamentally changing
business
• Information Age
• Production, distribution, control of
information primary economic drivers.
• Digital Revolution
• Same time as age of information,
conversion from analog to digital or from
mechanical/analog devices to digital
devices.
• Also called the third industrial revolution, it
is the era of digital electronic equipment
that started around the 1980s and is still
continuing
 How Information Systems are Transforming Business
• Global spending on information
technology (IT) and IT services:
nearly $3.8 trillion in 2019; $160
billion spent on management
consulting and services
• Organizational, management, and
cultural changes are often required
for firms to derive full business value
from IT investments
 Fundamental forces changing technology
Law Meaning implications
Moore’s Law The number of transistors per square inch on an Computers are getting
integrated chip doubles every 18 months. exponentially faster. The cost of
data processing is approaching zero.
Metcalfe’s Law Robert Metcalfe, the inventor More digital devices are being
of Ethernet, Metcalfe's Law states that the value of connected together. The value of
a network grows by the square of the size of the digital and social networks is
network. The law states that a network's value increasing exponentially. (google,
increases with the size of the network. Amazon. eBay exist due to large
number of internet users.
Nielsen’s Law Nielsen’s Law of Internet Bandwidth states that a user’s Network speed is increasing. Higher
connection speed grows by 50% per year. The interesting speeds enable new products,
law was presented by Jakob Nielsen of the Nielsen platforms, and companies.
Norman Group.
Kryder’s law The storage density on magnetic disk is increasing Storage capacity is increasing
at an exponential rate. exponentially. The cost of storing
data is approaching Zero.
Cont.
Computing power Network bandwidth
increases Cost of increases
computing power Cost of data transmission
declines declines

Computers become
Computers Digitization and
interconnected
become easier to miniaturization increase
use

Interconnected computing devices become more

pervasive and embedded in more aspect of our lives
 Bell’s Law
• New class of computers (mobile devices, desktop computers,
graphics cards) establishes a new industry each decade.
• New platforms, programming environments, industries, networks and IS.
• Understand how next digital evolution will affect businesses.
• What an industry does and how it does it will change.
• A highly successful business could be bankrupt because technology
changed and it didn’t.
• Blockbuster
• In 2004 blockbuster had $5.9B in revenues and in 2010 Blockbuster filed for
bankruptcy
• High-speed network connections and streaming video change the competitive
landscape
• Encyclopedia Britannica
The Rise of Wikipedia
IS in global business today

• IS play a crtical role – revolutionalize the way organizations

operate and interact with their customers, suppliers and
partners etc.
• These IS leverage advanced technologies (collect, process,
store & dissemination) enabling companies to make
informed decisions, optimize operations and gain competitve
edge in Global Market
Key aspects of IS in global business:
• Data Management
• Communication and Collaboration
• Supply Chain Management
• E-commerce and Online Presence
• Customer Relationship Management
• Cybersecurity
• Business Intelligence and Predictive Analytics
• Cloud Computing
• Regulatory Compliance
• Real-time Reporting and Dashboards
IS roles in agile organization with three pillars
• Is a business or entity that operates with a flexible and adaptive
approach, allowing it to quickly respond to changing market
conditions, customer needs, and internal dynamics.
• In an agile organizations, IS play crucial roles in supporting and
enabling the three pillars of agillity:

• Collaboration
• Adaptability
• Customer - centricity
Collaboration
• Communcation platform: IS provide collaboration tools like messageing
apps, video conference and project management software. These
platforms facilitate real time communcation and foster seamless
colloboration among teams including those working remotely or in
different locations.
• Document sharing and Version Control: IS enables teams to share
documents, files and project - related information easily. Version control
ensures that everyone works on the most up-to-date materilas avoiding
version conflicts and enhancing collaboration efficiency.
• Knowledge Management Systems: IS support the organization’s
knowledge mamanegemnt efforts allowing employees to access and share
vital information, best practices and lessons learned. This promote
knowledge sharing and empowers employees to make informed decisions.
Adaptability
• Data Analytics and Business Intelligence: IS with robust data analytics and
business intelligence capabillities help the organization gather and analyze
data from various sources. These insights enable leaders to monitor market
trends, customer preferences and operational performamnce allowing them
to adapt quickly to changing conditions.
• Agile Project Management Tools: Agile organizations rely on IS to manage
projects using agile methodologies. Agile project management tools aid in
planning, prioritizing and tracking tasks ensuring teams remain flexible and
shifiting project requirements.
• Rapid Application Development: IS support the rapid development and
deployment of software applications. Agile methodologies like DevOps and
Continous Integration/Contnious Deployment (CI/CD) streamline the
software developemnt process enabling faster innovation and frequent
updates.
Customer-Centricity
• Customer Relationship Management (CRM): IS with CRM capabilities help
organizations better understand customer needs, preferences and
behaviours. This data-driven aproach allows businesses to tailor products
and services to meet customer expectations effectively.
• Customer Feedback and Sentiment Analysis: IS enables the collection and
analysis of customer feedback from various channels (e.g., social media,
surveys, support tickets). Sentiment analysis tools help gauge customer
satisfaction and sentiment, aiding in continuous improvement efforts.
• Personalization and Customer Segmentation: IS support the
personalization of customer experiences based on their preferences and
past interactions. Customer segmentation tools allow businesses to target
specific customer groups with tailored marketing messages and offers.
Management Information systems - Changes
• Technology
• Cloud computing
• Big data and the Internet of Things (IOT)
• Mobile digital platform
• Management
• Online collaboration and social networking software
• Business intelligence
• Virtual meetings
• Organizations
• Social business
• Telework
• Co-creation of business value
 Globalization Challenges and Opportunities

• Internet has drastically reduced costs of operating on

global scale
• Increases in foreign trade, outsourcing
• Presents both challenges and opportunities
 The Emerging Digital Firm
• In a 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
• Growing interdependence between:
• Ability to use information technology and
• Ability to implement corporate strategies and achieve corporate goals
Strategic Business Objectives of Information
Systems
• Firms invest heavily in information systems to achieve six
strategic business objectives:
• Operational excellence
• New products, services and business models
• Customer and supplier intimacy
• Improved decision making
• Competitive advantage
• survival
 The Interdependence Between Organizations and
Information systems

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.
What is an Information Systems?
• Information systems
• 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
 Function 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.
 Data and Information
• Characteristics of good data
• Accurate
• Timely
• Relevant
• To context
• To subject
• Just sufficient
• Worth its cost

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.
Dimensions of Information Systems
• Organizations
• Management
• Technology

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.
Dimensions of Information Systems: Organizations

• Separation of business functions

• Sales and marketing
• Human resources
• Finance and accounting
• Manufacturing and production
• Unique business processes
• Unique business culture
• Organizational politics
Dimensions of Information Systems: Management
• 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
Dimensions of Information Systems: Technology
• Computer hardware and software
• Data management technology
• Networking and telecommunications technology
• Networks, the internet, intranet and extranets and World Wide
Web
• IT infrastructure: provide platform that system is built on
 A Business Perspective on Information Systems
• Information system is instrument for creating value
• Business perspective
• Calls attention to organizational and managerial nature of information systems
• Investments in information technology will result in superior returns
• Productivity increases
• Revenue increases
• Superior long-term strategic positioning
• 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
 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.
A Business Perspective on Information Systems

• Investing in information technology does not guarantee good

returns
• There is considerable variation in the returns firm receive
from systems investments
• Factors
• Adopting the right business model
• Investing in complementary assets (organizational and
management capital)
Variation in return on information technology

Although, on average,
investments in
information technology
produce returns far
above those returned
by other investments,
there is considerable
variation across firms.
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
Complementary Assets
• Complementary assets
• Examples of organizational assets
• Appropriate business model
• Efficient business processes
• Examples of managerial assets
• Incentives for management innovation
• Teamwork and collaborative work environments
• Examples of social assets
• 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.
Cont.
• Technical approach
• Emphasizes mathematically based models
• Computer science, management science, operations research
• Behavioral approach
• Behavioral issues (strategic business integration, implementation,
etc.)
• Psychology, economics, sociology
Cont.
• 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)
Cont.

•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.
Question/s