Chapter 1

• An IS Framework for Business Professionals. The IS knowledge that a business manager or professional needs to know is illustrated in Figure 1.2 and covered in this chapter and text. This includes (1) foundation concepts: fundamental behavioral, technical, business, and managerial concepts like system components and functions, or competitive strategies; (2) information technologies: concepts, developments, or management issues regarding hardware, software, data management, networks, and other technologies; (3) business applications: major uses of IT for business processes, operations, decision making, and strategic/competitive advantage; (4) development processes: how end users and IS specialists develop and implement business/IT solutions to problems and opportunities arising in business; and (5) management challenges: how to effectively and ethically manage the IS function and IT resources to achieve top performance and business value in support of the business strategies of the enterprise.
• Business Roles of Information Systems. Information systems perform three vital roles in business firms. Business applications of IS support an organization’s business processes and operations, business decision making, and strategic competitive advantage. Major application categories of information systems include operations support systems, such as transaction processing systems, process control systems, and enterprise collaboration systems, and management support systems, such as management information systems, decision support systems, and executive information systems. Other major categories are expert systems, knowledge management systems, strategic information systems, and functional business systems. However, in the real world most application categories are combined into cross-functional information systems that provide information and support for decision making and also perform operational information processing activities. Refer to Figures 1.7, 1.9, and 1.11 for summaries of the major application categories of information systems.
• System Concepts. A system is a group of interrelated components working toward the attainment of a common goal by accepting inputs and producing outputs in an organized transformation process. Feedback is data about the performance of a system. Control is the component that monitors and evaluates feedback and makes any necessary adjustments to the input and processing components to ensure that proper output is produced.
• An Information System Model. An information system uses the resources of people, hardware, software, data, and networks to perform input, processing, output, storage, and control activities that convert data resources into information products. Data are first collected and converted to a form that is suitable for processing (input). Then the data are manipulated and converted into information (processing), stored for future use (storage), or communicated to their ultimate user (output) according to correct processing procedures (control).
• IS Resources and Products. Hardware resources include machines and media used in information processing. Software resources include computerized instructions (programs) and instructions for people (procedures). People resources include information systems specialists and users. Data resources include alphanumeric, text, image, video, audio, and other forms of data. Network resources include communications media and network support. Information products produced by an information system can take a variety of forms, including paper reports, visual displays, multimedia documents, electronic messages, graphics images, and audio responses.

Chapter 1:  Foundations of Information Systems in Business

 

1.   How can information technology support a company’s business processes and decision-making, and give it a competitive advantage?  Give examples to illustrate your answer.

 

Information technology plays a vital role in the success of an enterprise.  For example, the Internet and Internet-like internal networks, or intranets, and external interorganizational networks, called extranets, can provide the information infrastructure a business needs for efficient operations, effective management, and competitive advantage.

 

2.   How does the use of the Internet, intranets, and extranets by companies today, support heir business processes and activities? 

 

In order to succeed today, organizations are increasingly competing in global markets.  The increased use of technologies such as the Internet, intranets, and extranets will definitely revolutionize how businesses will operate and how they will use computers to compete.

 

3.  Refer to the Real World Case on Amazon.com in the chapter. What advice could you five Jeff Bezos about the business use of information technology at Amazon that might help them continue to prosper during the next five years? Explain your recommendations.

     

      Recommendations could include:

·   Continue the investment in newer technologies to enable Amazon’s ability to be very competitive.

·   Develop new strategies with companies in additional industries that will enable Amazon to enter new markets for additional products and services.

·   Develop better applications using an open system environment that will enable Amazon to further reduce costs and/or increase revenues.

 

 

4.   Why do big companies still fail in their use of information technology?  What should they be doing differently?

 

 

 

Certainly the reasons listed in the table above could some of the major causes of why companies fail in their use of information technology.  However, it is important to note that the field of technology is changing at such a rapid pace that many large and successful companies are having difficulty keeping up with it.  Other ideas may include such things as a demand for skilled employees in this area; the major expense involved in managing and developing systems and hardware acquisitions, increased and more aggressive competition from competitors both domestic and international.

 

5.      How can a manager demonstrate that he or she is a responsible end user of information systems?  Give several examples.

 

Students’ answers will vary, however they must realize that information is a powerful resource that can be used in an inappropriate matter.  As a manager or other end user of information, we must insure that we always consider the ethical responsibilities of the use of information.  For example, uses of information technology might be used in an improper, irresponsible, or harmful way, which can hurt other individuals or society as a whole.  Information systems must be managed to benefit society while meeting the goals of the organization.  Irresponsible use would include taking advantage of access to confidential data for personal gain or interest.

 

6.      Refer to the Real World Case on Kodak, HP, and Amersham Biosciences in the chapter.  What challenges in salesperson morale, performance, and management might arise in the use of Web-based sales support and training systems like the Eloquent system used by Kodak and HP? What solutions could you suggest?

 

      Challenges and solutions might include:

·         The sales staff may consider the Web-based sales support and training systems will lead to a downsizing of the sales staff.  Employee involvement in implantation is crucial as well as keeping the sales staff informed about anticipated changes in levels of employment.

·         Concerns by the sales staff that the Web-based systems will monitor employee performance and be used as the single most important criteria for determining employee evaluations.  The sales staff should be informed about the positive advantages of the new systems as well as informed as to how the new system will be used in terms of evaluating employee performance.

 

7.             What are some of the toughest management challenge in developing IT solutions to solve business problems and meet new e-business opportunities?

 

One only has to pick up virtually any newspaper or business-related magazine to see a story about some facet of new e-business opportunities.  Businesses are increasingly incorporating technology into their quest to survive and compete in the marketplace.  The Internet and the WWW provide the enabling mechanisms to foster the growth of electronic commerce and electronic business.  Electronic commerce is defined as the use of electronic transmission mediums (telecommunications) to engage in the exchange, including buying and selling, of products and services requiring transportation, either physically or digitally, from location to location.  Electronic business opportunities include the exchange of information not directly related to the actual guying and selling of goods.  Increasingly, businesses are using electronic mechanisms to distribute information and provide customer support.  From the two definitions defined in this answer, it is clear to see that the management challenge in developing IT solutions to solve business problems and meet new e-business opportunities may spell the difference between success and failure of many firms.

 

8. Why are there so many conceptual classifications of information systems?  Why are they typically integrated in the information systems found in the real world?

 

Conceptual classifications of information systems are designed to emphasize the many different roles of information systems.  This can be done from various points of view, such as the level of management that the information systems serve, or the business functions they support.  In practice, these roles are not always clearly divided, and in any case, information produced by one business activity may serve as input data to another activity.  Thus it makes sense to integrate various roles into one information system.

 

9.      In what major ways have the roles of information systems applications in business expanded during the last 40 years?  What is one major change you think will happen in the next 10 years?

 

Data processing (1950s-1960s), management reporting (1960s-1970s), decision support (1970s-1980s), strategic end user support (1980s-1990s), enterprise and global internetworking (1990s-2000s).  (See Figure 1.11).   Ethics will become a very important challenge in the new types of information systems.

 

10.     Refer to Real World Example of Hershey Foods in the chapter.  Are the failure and success described due to managerial or technological challenges? Explain.

 

      Successes and failures are related to managerial or technological challenges:

·        Managerial – In 1999 Hershey lost its gamble when it installed a wide swath of SAP AG’s R/3 enterprise resource planning applications, plus companion packages from two other vendors simultaneously, during one of its busiest shipping seasons.  Project management failure when attempting to squeeze a four-year project into just 30 months before going live with the full ERP package.  In 2002 Hershey was more successful when upgrading to a new R/3 version 20 percent under budget due to strong program management and executive leadership. Diligent planning and an extensive testing and training plan.. 

·        Technological -   Compatibility between SAP and other vendor software in 1999 may have contributed to the failure.  In 2002 an upgrade to a newer version of R/3 reduced the technological issues that could cause failure.