Chapter 1 / 2 1

Chapter 1 / 2
Information Technology For Management 7
th
Edition
Turban & Volonino
Based on lecture slides by L. Beaubien, Providence College
John Wiley & Sons, Inc.
IT Support of Organizational
Performance /
Information Technologies:
Concepts and Management
Chapter 1 / 2 2
Learning b!ectives

"escribe the digital econo#y and digital

enterprises

$ecogni%e the relationship bet&een

per'or#ance, organi%ational pressures, and
responses and technology

"e'ine (n'or#ation )yste#s and the di''erence

bet&een data, in'or#ation and *no&ledge

+nderstand &hat the adaptive enterprise is

Chapter 1 / 2 ,
Learning b!ectives -continued.

+nderstand the support role that () and (T play

in the organi%ation

+nderstand the i#portance o' learning about (T

Chapter 1 / 2 /
"igital 0cono#y 1 23e&4 0cono#y

0cono#y based on digital technologies -(nternet

econo#y, ne& econo#y, &eb econo#y.

05Business6 The use o' electronic technologies to

transact business

Collaboration6 People and organi%ations interact,

co##unicate, collaborate, and search 'or in'or#ation

(n'or#ation 07change6 )toring, processing and

trans#ission o' in'or#ation
Chapter 1 / 2 8
"igital Business
Chapter 1 / 2 9
3e& 0cono#y vs. ld 0cono#y

07a#ple :16 $egistering 'or Classes

ld 0cono#y6 ;ou &ould go to the $egistrar<s ''ice

on ca#pus &ith a paper registration docu#ent

3e& 0cono#y6 ;ou access your ca#pus &ebsite, log

into registration site, and electronically register 'or
classes 'ro# any&here
Chapter 1 / 2 =
3e& 0cono#y vs. ld 0cono#y

07a#ple :26 Buying and )elling Te7tboo*s

ld 0cono#y6 ;ou go to the boo*store in person and

buy ne& or sell used boo*s

3e& 0cono#y6 ;ou go online to the Publisher<s >eb

site or to >eb5based services such as ?#a%on.co#
to buy or sell boo*s
Chapter 1 / 2 @
3e& 0cono#y vs. ld 0cono#y

07a#ple :,6 Photography

ld 0cono#y6 ;ou use a ca#era &ith 'il#, &hich you

have to purchase and have developedA you #ail
copies o' pictures.

3e& 0cono#y6 ;ou can scan photos, #a*e copies

and e5#ail the#. "igital ca#eras reBuire no 'il# or
processing. "igital photography and video integrated
into cell phones 'or i##ediate vie&ing
Chapter 1 / 2 C
3e& 0cono#y vs. ld 0cono#y

07a#ple :/6 Paying 'or Transportation

ld 0cono#y6 +se to*ens 'or bus and sub&ay

transportation

3e& 0cono#y6 Bus and sub&ay riders no& use

DetroCardsA contactless cards that have a s#all radio
trans#itter that trans#it account in'or#ation to a
reader
Chapter 1 / 2 1E
3e& 0cono#y vs. ld 0cono#y

07a#ple :86 Paying 'or Foods, Chec*out

ld5old 0cono#y6 Custo#er selects goods, &aits in

line 'or the cashier to *ey in price o' ite#s, and then
pays in cash

ld 0cono#y -1.6 The cler* s&ipes the barcode o'

each ite# and custo#er pays in cash, credit, or debit.
(n'or#ation scanned is available 'or i##ediate
analysis *no&n as source-data automation -inventory
levels are updated, >al#art, P).
Chapter 1 / 2 11
3e& 0cono#y vs. ld 0cono#y

07a#ple :96 Paying 'or Foods, Chec*out continued

ld 0cono#y -2.6 )hoppers ta*e their ite#s to a sel'5

service *ios* and s&ipe the barcodes the#selves

3e& 0cono#y6 >ireless technology a''i7ed to each

ite#. ?llo&s you to select ite#s that pass through a
scanner, &hich reads &ireless signal, generates a bill,
auto#atically debits your designated account 'or
pay#ent and you leave.

07a#ple :=6 Ban*ing

Chapter 1 / 2 12
Business Dodels

? business model is a #ethod o' doing business by

&hich a co#pany can generate revenue to sustain itsel'.
The #odel spells out ho& the co#pany adds value to
create a product or service. -"0LL vs GP.

$everse ?uctions

?''iliate Dar*eting

0lectronic aggregation -buying groups.

(n'o#ediation
Chapter 1 / 2 1,
Business Per'or#ance Danage#ent

)tep 16 "ecide on desired per'or#ance levels ->here do

&e &ant to goH Dission, goals and #etrics.

)tep 26 "eter#ine ho& to attain the per'or#ance levels

-Go& do &e get thereH )trategy and plans.

)tep ,6 Go& &ell are &e doingH Donitoring per'or#ance

)tep /6 ?d!ust per'or#ance/goals -Go& can &e i#proveH

Go& do &e close the gapH )olutions and responses.

(T can support all o' these steps...

Chapter 1 / 2 1/
"rivers Iorcing Changes (n Business
Dodels

0nviron#ental, organi%ational, and technological

'actors

$eact 'reBuently and Buic*ly to both the threats

and the opportunities resulting 'ro# this ne&
business environ#ent

? response can be a reaction to a pressure

already in e7istence, an initiative intended to
de'end an organi%ation against 'uture pressures,
or an activity that e7ploits an opportunity created
by changing conditions
Business Pressures
Business Critical Response Activities
Chapter 1 / 2 18
Business Pressures, rgani%ational
$esponses, and (T )upport

usiness !ressure 5 The business environ#ent is the

co#bination o' social, legal, econo#ic, physical, and
political 'actors that a''ect business activities

)igni'icant changes in any o' these 'actors are li*ely to

create business pressure on the organi%ation

The three types o' business pressures 'aced are6

market, technology, and societal pressures.
Chapter 1 / 2 19
The "rivers o' Change -continued.
Chapter 1 / 2 1=
The ?daptive 0nterprise

...can respond properly and in a ti#ely #anner to

changes in the business environ#ent

Process

$ecogni%e changes as Buic*ly as they occur, or

be'ore

"eal &ith changes properly and correctly

Beco#e a digital and agile enterprise

"o not &ait 'or co#petitor to introduce change

Change your in'or#ation syste#s Buic*ly

Chapter 1 / 2 1@
Co#petitive )ituation

Co#petitive Iorces Dodel by Porter

? business 'ra#e&or*, devised by Dichael

Porter, 'or analy%ing co#petitiveness by loo*ing
at 'ive #a!or 'orces that #ight alter a 'ir#<s
co#petitive standing.
Chapter 1 / 2 1C
Co#petitive )ituation
Chapter 1 / 2 2E
Co#petitive ?dvantage

Co#petitive ?dvantage

?n advantage over co#petitors in so#e #easure

such as cost, Buality, or speed, &hich leads to
control o' a #ar*et and to larger5 than average
pro'its.

)trategies

Cost Leadership, "i''erentiation, Custo#er5

orientation, 3e& Dar*ets, (nnovation, perational
0''ectiness, Loc*5in & )&itching Costs
Chapter 1 / 2 21
"iscussion

>hich o' these strategies can be enhanced by

the use o' ()/(T, and ho&H
Chapter 1 / 2 22
>hat is an (n'or#ation )yste#H

? set o' interrelated co#ponents that collect,

#anipulate, store, and disse#inate data and
in'or#ation and provide 'eedbac* to #eet an
ob!ective.
JJJThis process could be #anual or co#puteri%ed -CB()
1 Co#puter Based ()..
Chapter 1 / 2 2,
Co#ponents o' a CB()

"ard#are 5 co#puter eBuip#ent used to per'or# input, processing,

and output activities.

Soft#are 5 co#puter progra#s that govern the operation o' the

co#puter.

$atabase 5 an organi%ed collection o' 'acts and in'or#ation,

typically consisting o' t&o or #ore related data 'iles.

Telecommunications 5 the electronic trans#ission o' signals 'or

co##unications &hich enables organi%ations to carry out their
processes and tas*s.

!eo%le 5 the #ost i#portant ele#ent in #ost co#puter5based

in'or#ation syste#s.

!rocedures & include the strategies, policies, #ethods, and rules 'or
using the CB().
Chapter 1 / 2 2/
Da!or capabilities o' co#puteri%ed
in'or#ation syste#s

Per'or# high5speed high5volu#e, nu#erical co#putations -")).

Provide 'ast, accurate, reliable, and ine7pensive co##unication

&ithin and bet&een organi%ations, anyti#e, anyplace.

)tore huge a#ounts o' in'or#ation in an easy to access, yet s#all

space -database #anage#ent.

?llo& Buic* and ine7pensive access to vast a#ounts o' in'or#ation

&orld&ide at any ti#e

0nable collaboration any &here anyti#e.

(ncrease the e''ectiveness and e''iciency o' people &or*ing in

groups in one place or in several locations -e7. data e7change,
video con'erencing.

Vividly present in'or#ation

Iacilitate global trade -e7. thaige#.co#.

0nable auto#ation o' routing decision #a*ing.

Can be &ireless, thus supporting uniBue applications

Chapter 1 / 2 28
(n'or#ation Concepts

"ata ite#s6 ?n ele#entary description o' things, events,

activities, and transactions that are recorded, classi'ied,
and stored, but are not organi%ed to convey any speci'ic
#eaning.

(n'or#ation6 "ata that have been organi%ed so that they

have #eaning and value to the recipient.

Kno&ledge6 "ata and / or in'or#ation that have been

organi%ed and processed to convey understanding,
e7perience, accu#ulated learning, and e7pertise as
apply to a current proble# or activity.
Chapter 1 / 2 29
"iscussion

Thin* about the di''erences bet&een data, in'or#ation

and *no&ledge 'or one o' the 'ollo&ing e7a#ples6

)tudent grades

)toc* prices
Chapter 1 / 2 2=
(n'or#ation )yste# 5 Classi'ication By
)upport Iunction
Chapter 1 / 2 2@
Transaction Processing )yste# -TP).

TP) auto#ates routine and repetitive tas*s that are

critical to the operation o' the organi%ation, such as
preparing a payroll, billing custo#ers, Point5o'5)ale, and
>arehouse operations

"ata collected 'ro# this operation supports the D() and

")) syste#s e#ployed by Diddle Danage#ent

Pri#ary purpose to per'or# transactions and collect

data
Chapter 1 / 2 2C
Danage#ent (n'or#ation )yste#s -D().

These syste#s access, organi%e, su##ari%e, and

display in'or#ation 'or supporting routine decision making
in the 'unctional areas. Feared to&ard #iddle #anagers,
D() are characteri%ed #ainly by their ability to produce
periodic reports such as a daily list o' e#ployees and the
hours they &or*, or a #onthly report o' e7penses as
co#pared to a budget

Pri#ary purpose to process data into in'or#ation

Chapter 1 / 2 ,E
"ecision )upport )yste#s -")).

These syste#s support co#ple7 non5routine decisions

Pri#ary purpose to process data into in'or#ation

")) syste#s are typically e#ployed by tactical level

#anage#ent &hose decisions and &hat5i' analyses
are less structured

This in'or#ation syste# not only presents the results

but also e7pands the in'or#ation &ith alternatives

)o#e ")) #ethodologies

Dathe#atical Dodeling -D(P.

)i#ulation ->hat5('.

Lueries

"ata #ining -Ban*, Te7as Ta7 "epart#ent.

Iorecasting -3i*e vs Benetton.

Chapter 1 / 2 ,1
0$P )yste#s

Iocus on processes throughout the enterprise

-'unctional in'or#ation syste#s 'ocus on one
area/depart#ent only.

?ccounting

Gu#an $esource

Production

)ales / "istribution

Logistics

(ntegration o' all tas*s -single database, uni'or# F+(.

07a#ples6 )?P, racle, 3avision,...

Chapter 1 / 2 ,2
07pand the )cope to (nclude
07ternal 0nviron#ents

'%stream su%%ly chain

includes the organi%ations 'irst5tier suppliers and their

suppliers -in'or#ation sharing, VD(, 05procure#ent.

Internal su%%ly chain

includes all the processes used by an organi%ation in

trans'or#ing the inputs o' the suppliers to outputs
-0$P, ")), etc.

$o#nstream su%%ly chain

includes all the processes involved in delivering the

products to 'inal custo#ers -e7tranet, cross5duc*ing.
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The flow of materials, information, money, and services from raw material
suppliers through factories and warehouses to the end customers is a
supply chain.
Chapter 1 / 2 ,,
(nter5rgani%ational )yste#s -().

() are syste#s that connect t&o or #ore organi%ations. These

syste#s are co##on a#ong business partners and play a
#a!or role in e5co##erce as &ell as in supply chain
#anage#ent support

The 'irst type o' (T syste# that &as developed in the 1C@Es to
i#prove co##unications &ith business partners &as electronic
data interchange (E$I., &hich involved co#puter5to5co#puter
direct co##unication o' standard business docu#ents -such as
purchase orders and order con'ir#ations. bet&een business
partners. These syste#s beca#e the basis 'or electronic
markets, &hich later developed into electronic commerce.

Web-based systems -many using XML. deliver business

applications via the (nternet. +sing bro&sers and the (nternet,
people in di''erent organi%ations co##unicate, collaborate,
access vast a#ounts o' in'or#ation, and run #ost o' the
organi%ation<s tas*s and processes.
Chapter 1 / 2 ,/
07tranets

Connect several intranets via the (nternet, by adding a

security #echanis# and so#e additional 'unctionalities

Ior# a larger virtual net&or* that allo&s re#ote users

-such as business partners or mobile employees. to
securely connect over the (nternet to the enterprise<s
#ain intranet

07tranets are also e#ployed by t&o or #ore enterprises

-suppliers & buyers. to share in'or#ation in a controlled
'ashion, and there'ore they play a #a!or role in the
develop#ent o' business5to5business electronic
co##erce and )upply Chain syste#s -Philip Doris.
Chapter 1 / 2 ,8
Classi'ication o' () revisited 1
breadth and level
Chapter 1 / 2 ,9
Danage#ent o' (n'or#ation
$esources

(n'or#ation resources include hard&are, so't&are, data,

net&or*s, applications,...

Danage#ent includes acBuisition, introduction, support...

Traditionally, (T/() depart#ent o&ns all resources

0nd5user co#puting6 e#ployees use co#puters, &rite

applications, #anage data etc.

Leads to 'rag#ented #anage#ent and need 'or

cooperation bet&een ()" and users

>ho is responsible 'or &hich resources

(ncludes 'inancial responsibilities -contracts bet&een

users and ()" 1 (T controlling.
Chapter 1 / 2 ,=
"iscussion

>hat are the possible proble#s associated &ith6

Co#plete control at ()", and

Co#plete control 'or end5usersH

>hich 'actors in a co#pany &ould lead to &hich

outco#eH
Chapter 1 / 2 ,@
Danage#ent o' (n'or#ation
$esources

Chie' (n'or#ation ''icer -C(.6 so#eti#es #e#ber o'

top #anage#ent, no&adays no longer technical, but
strategic 'unction

(T Fovernance6 MN the leadership and organisational

structures and processes that ensure that the
organisation<s (T sustains and e7tends the organisation<s
strategies and ob!ectives.M
Chapter 1 / 2 ,C
>hy )tudy (n'or#ation )yste#sH

;ou &ill be #ore e''ective in your chosen career i' you

understand ho& success'ul in'or#ation syste#s are built,
used, and #anaged

;ou also &ill be #ore e''ective i' you *no& ho& to

recogni%e and avoid unsuccess'ul syste#s and 'ailures

?ccording to the +) Bureau o' Labor )tatistics, the 2top

seven 'astest gro&ing occupations 'all &ithin (T or
co#puter related 'ield4
Chapter 1 / 2 /E
Case )tudy

Prepare the Dinicase Chapter 1 -3G) Gospitals adopt co5

operative >iIi. and Case Part ( -Building an 05Business at
Iede7 Corporation. 'or ne7t class session.