Organizational use of information systems – Impact on business

_______ is data that has been shaped into a form that is meaningful to human beings.


________ is output returned to appropriate members of the organization to help them evaluate or correct the input stage.


The key elements of an organization are its people, structure, business processes, politics, and ________


________ makes long-range strategic decisions about the firm’s products and services.

Senior Management

Computer ________ consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system.


________ is a global network that uses universal standards to connect millions of different networks around the world.

The Internet

The ________ is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format.

World Wide Web

________ are private corporate networks extended to authorized users outside the organization.


The enormous volume of data generated by Internet activity, such as Web traffic and e-mail, is referred to as ________.

Big Data

In a(n) ________ perspective, the performance of a system is optimized when both the technology and the organization mutually adjust to one another until a satisfactory fit is obtained.

Socio-technical (Page 30)

fine operational excellence. How can information systems help achieve it?

Operational excellence is the achievement of higher levels of productivity, efficiency, profitability. Information systems can help achieve operational excellence by improving communications to supplier and optimizing the supply chain. Information systems could help managers communicate with workers more efficiently, enable technological innovation in products, minimize warehouse overhead, streamline distribution.

You work for an auto manufacturer and distributor. How could you use information systems to achieve greater customer intimacy?

You could create a Web site that allows customers to customize cars, communicate with support personnel and other car owners. You could create an automated e-mail service reminding car owners to take their car in for periodic checkups. You could have an information system that tracks customer preferences in local areas, so you can provide cars that reflect local customer needs and desires.

What is the difference between information technology and information systems? Describe some of the functions of information systems.

Information technology (IT) consists of all the hardware and software that a firm needs to use to achieve its business objectives. Information systems are more complex. An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization.

An information system:
• supports decision making, coordination, and control
• helps employees analyze problems
• helps employees visualize complex subjects
• helps create new products

You are a marketing manager for a national movie theater chain. Give an example of data that your department could use for creating meaningful information. What type of information could that data produce?

Movie ticket sales from individual theaters would be an example of raw data. Meaningful information from this would be: average number of tickets sold to seniors on certain days of the week.

Define business process. What might be a business process used at a hospital?

A business process is a set of logically related tasks and behaviors for accomplishing work. Hiring a new employee, customer intake, and filing medical records are examples of business processes at a hospital.

You are starting a small bike messenger company. Given your type of services (hand-delivering packages within a small geographical area), could your firm be a digital firm? If so, what would make this a digital firm?

Being a digital firm doesn’t purely rely on having digital goods and services. A digital firm would have most of its relationships with customers, suppliers, and employees be digitally enabled. Ordering deliveries, assigning deliveries, managing employees and assignments could certainly be digitally enabled; using cell phones, information systems, and handheld devices to connect customers, delivery management, and bike messengers.

chapter 1 discusses how each organization has its own culture and sets of values shared by most of its members. What kind of shared values might you find at a law firm?

Shared values at a law firm might be: The legal system works, the legal system is fair, lawyers help people, and people need help with the legal system because it is complicated.

You work at the business headquarters for a chain of movie theaters. Describe this firm’s information value chain.

An information value chain adds value to data at various stages, transforming it into valuable data. At a chain of movie theaters, data would be gathered from ticket sales and concession sales. Information systems would help transform this into meaningful information, such as determining the types of movies popular in certain regions, times and days of the week that people most often saw movies, what snacks were the most popular. This information would be valuable in making decisions, such as offering ticket discounts during less popular time slots, and offering more popular snack items. Further feedback based on the results of these decisions could determine whether these decisions were effective.

How does a company’s use of information systems affect its corporate strategies? Provide an example.

A firm’s ability to effectively use information technology is interdependent with its ability to implement corporate strategies and achieve corporate goals. More and more, the ability to compete and succeed depends on a company’s ability to implement technology. What a business would like to do in the future can depends on what its systems will be able to do. Examples of this might be a company who invests in information systems that enable it to create new products or to make its distribution system more efficient, allowing the company to become the low-cost producer. 

What are the main changes taking place in organizational use of information systems. Which of these do you think is having the greatest impact on businesses?

The main organizational changes taking place are: 
1. businesses using social networks to connect with customers and suppliers, 
2. businesses implementing tablet and mobile platforms enabling work away from the office, and 
3. increase in collaboration, with customers and suppliers more connected by networks to the firm and able to contribute in new products and services.
Student answers as to the greatest impact will vary. An example answer is: The increase in collaboration is having the greatest impact, as customers are essentially gaining greater control in determining the end product; businesses who are flexible enough to listen to and respond to customer demand will be more successful.

Answer: Business processes refer to the manner in which work activities are organized, coordinated, and focused to produce a specific business result. They also represent unique ways in which organizations coordinate work, information, and knowledge and the ways in which management chooses to coordinate work. Managers need to pay attention to business processes because they determine how well the organization can execute, and thus are a potential source for strategic success or failures.

Although each of the major business functions has its own set of business processes, many other business processes are cross-functional. Information systems can help organizations achieve great efficiencies by automating parts of these processes or by helping organizations rethink and streamline them. Firms can become more flexible and efficient by coordinating and integrating their business processes to improve management of resources and customer service

Better Fitness could use computers, smart products and mobile apps to monitor and evaluate health and fitness of members and customize workouts in product differentiation strategy. They could use information systems for sales and marketing data research in order to define a niche market that would bring greater profits. They could allow customers to review their health data and add additional information or view statistics to create customer intimacy. If the individual gyms are franchises, then a network could be used for franchisees to share data and research new sales tactics, etc.

Cloud computing is an on-demand computing services obtained over network, which provide storage spaces on the internet or network. It can be public or private, and could make benefit on minimize IT investments. Concerns of security and reliability could be its drawbacks because its multipoint access and sharing.Green computing practices and technologies for manufacturing, disposing of computing and networking hardware.

In green computing, reducing computer power consumption is a top priority, for example, using solar to solve part of the power supply to some portable hardware. Moreover, green computing could make higher performance by using power-saving processors, such as multi-core processors, which can calculate and transfer data faster.Quantum computing uses quantum physics to represent and operate on data. It is the newest technology that can help the data center or companies to calculate the data

Enterprise systems, customer relationship management, and supply chain management are three enterprise applications. Enterprise systems are based on a suite of integrated software modules and a common central database. Enterprise systems utilize enterprise software to support financial and accounting, human resources, manufacturing and production, and sales and marketing processes.

Enterprise systems provide many benefits including an enterprise-enabled organization, improved management reporting and decision making, a unified information systems technology platform, and more efficient operations and customer-driven business processes. Supply chain management systems help an organization better manage its supply chain, including planning, sourcing, making, delivering, and returning items.

Supply chain management software can be categorized as a supply chain planning system or as a supply chain execution system. A supply chain planning system enables a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. A supply chain execution system manages the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner.

Supply chain management benefits include improved customer service and responsiveness, cost reduction, and cash utilization. Customer relationship management systems help firms maximize the benefits of their customer assets. These systems capture and consolidate data from all over the organization and then distribute the results to various systems and customer touch points across the enterprise. Customer relationship management systems can be classified as operational or as analytical.

The most profound way in which e -commerce and the Internet have changed this relationship is in the shrinking of information asymmetry. An information asymmetry exists when one party in a transaction has more information that is important for the transaction than the other party. That information helps determine their relative bargaining power. In digital markets, consumers and suppliers can “see” the prices being charged for goods, and in that sense digital markets are said to be more “transparent” than traditional markets.

For example, until auto retailing sites appeared on the Web, there was a pronounced information asymmetry between auto dealers and customers. Only the auto dealers knew the manufacturers’ prices, and it was difficult for consumers to shop around for the best price. Auto dealers’ profit margins depended on this asymmetry of information. Today’s consumers have access to a legion of Web sites providing competitive pricing information, and three-fourths of U.S. auto buyers use the Internet to shop around for the best deal.

Thus, the Web has reduced the information asymmetry surrounding an auto purchase. The Internet has also helped businesses seeking to purchase from other businesses reduce information asymmetries and locate better prices and terms

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