Management Information System CHAPTER 1
Content
Notes for CHAPTER 1
IT Supports Organizational Performance in Turbulent Business Environment
Enterprises that use computers and information systems (IS) to perform or support their activities
are known as digital enterprises. They use converged communication and computing
technology to improve business processes and performance. Two major features of a digital
enterprise are E-commerce and Networked Computing.
These digital enterprises operate in a digital economy. Digital economy is an economy based on
digital technologies whose members are better informed and able to communicate because of IT
and the resulting information stimulates e-commerce, online transactions and organizational
changes. The digital economy provides unique opportunities to business owners and managers to
do business without physical storefronts and borders. This economy comprises of the following
products and services:
Information and entertainment products that are digitized (documents, graphics, audios,
videos, software)
Symbols, tokens and concepts (tickets and reservations, financial instruments)
Processes and services (government services, electronic services, social networks, etc.)
The new economy brings not only digitization, but also the opportunity to use new business
models. A business model is a method of doing business by which a company can generate
revenue to sustain itself. A comprehensive business model comprises of 6 elements:
1.
2.
3.
4.
5.
6.
Products and services
Business process
Customers
Resources
Supply chain and business partners
Financial viability
Information System (IS) collects, processes, stores, analyzes and disseminates information for a
specific purpose. It processes the input using technology and produces the output to be sent to
users via electronic networks. Although, not all IS are necessarily computerized but the
computerized systems include hardware, software, data, a network, procedures and people.
Information Technology (IT) is a collection of computing systems used by an organization. It
includes the technological side of an IS. It includes the hardware, software, data and database,
networks and other electronic devices. IT is a subsystem of an IS.
Business Performance Management
1. Decide on desired performance levels
2. Determine how to attain these levels
3. Monitor performance
4. Adjust performance and/or goals
Green IT is the effort made by organizations and individuals by preventing the damages caused
to the physical environment by potential improvements and savings that can be made in the IT
industry. It is a growing movement and a permanent fixture in the IT world. Green software, a
software product, will help companies save energy or comply with EPA requirements.
A strategy is the component that defines how to attain goals and objectives. Porter’s
competitive force model has been used to develop strategies for companies to increase their
competitive edge. The five major forces of the model that affect the degree of profitability are:
1.
2.
3.
4.
5.
Threat of entry of new competitors
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitutes
Rivalry among existing firms
Porter’s Value Chain Model: The activities conducted in any manufacturing organization can
be divided into primary activities and support activities. Primary activities include:
a.
b.
c.
d.
e.
Inbound logistics
Operations
Outbound logistics
Marketing and sales
Services
Primary activities are supported by (1) The Firm’s Infrastructure, (2) Human Resource
Management, (3) Product and Technology Development and (4) Procurement.
Adaptive Enterprises are organizations that can respond in a timely manner to environmental
changes and to be agile they must also have a flexible IT architecture. To be adaptive, IT needs to
be synchronized with business processes.
Social Computing is computing that is concerned with the intersection of social behavior and
ISs. E.g. Blogs, instant messaging, social network services, etc. It concentrates on improving
collaboration and interaction among people.
Learning about IT is essential because the role of IT is increasing rapidly in support of
organizations. Over the years, we have become dependent on IT and the same would continue in
the coming future. Also, IT related jobs with high salary packages have been made available.
IT Supports Organizational Performance in Turbulent Business Environment
Enterprises that use computers and information systems (IS) to perform or support their activities
are known as digital enterprises. They use converged communication and computing
technology to improve business processes and performance. Two major features of a digital
enterprise are E-commerce and Networked Computing.
These digital enterprises operate in a digital economy. Digital economy is an economy based on
digital technologies whose members are better informed and able to communicate because of IT
and the resulting information stimulates e-commerce, online transactions and organizational
changes. The digital economy provides unique opportunities to business owners and managers to
do business without physical storefronts and borders. This economy comprises of the following
products and services:
Information and entertainment products that are digitized (documents, graphics, audios,
videos, software)
Symbols, tokens and concepts (tickets and reservations, financial instruments)
Processes and services (government services, electronic services, social networks, etc.)
The new economy brings not only digitization, but also the opportunity to use new business
models. A business model is a method of doing business by which a company can generate
revenue to sustain itself. A comprehensive business model comprises of 6 elements:
1.
2.
3.
4.
5.
6.
Products and services
Business process
Customers
Resources
Supply chain and business partners
Financial viability
Information System (IS) collects, processes, stores, analyzes and disseminates information for a
specific purpose. It processes the input using technology and produces the output to be sent to
users via electronic networks. Although, not all IS are necessarily computerized but the
computerized systems include hardware, software, data, a network, procedures and people.
Information Technology (IT) is a collection of computing systems used by an organization. It
includes the technological side of an IS. It includes the hardware, software, data and database,
networks and other electronic devices. IT is a subsystem of an IS.
Business Performance Management
1. Decide on desired performance levels
2. Determine how to attain these levels
3. Monitor performance
4. Adjust performance and/or goals
Green IT is the effort made by organizations and individuals by preventing the damages caused
to the physical environment by potential improvements and savings that can be made in the IT
industry. It is a growing movement and a permanent fixture in the IT world. Green software, a
software product, will help companies save energy or comply with EPA requirements.
A strategy is the component that defines how to attain goals and objectives. Porter’s
competitive force model has been used to develop strategies for companies to increase their
competitive edge. The five major forces of the model that affect the degree of profitability are:
1.
2.
3.
4.
5.
Threat of entry of new competitors
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitutes
Rivalry among existing firms
Porter’s Value Chain Model: The activities conducted in any manufacturing organization can
be divided into primary activities and support activities. Primary activities include:
a.
b.
c.
d.
e.
Inbound logistics
Operations
Outbound logistics
Marketing and sales
Services
Primary activities are supported by (1) The Firm’s Infrastructure, (2) Human Resource
Management, (3) Product and Technology Development and (4) Procurement.
Adaptive Enterprises are organizations that can respond in a timely manner to environmental
changes and to be agile they must also have a flexible IT architecture. To be adaptive, IT needs to
be synchronized with business processes.
Social Computing is computing that is concerned with the intersection of social behavior and
ISs. E.g. Blogs, instant messaging, social network services, etc. It concentrates on improving
collaboration and interaction among people.
Learning about IT is essential because the role of IT is increasing rapidly in support of
organizations. Over the years, we have become dependent on IT and the same would continue in
the coming future. Also, IT related jobs with high salary packages have been made available.
