Chapter 1 - Business Information Systems - BAT-2302

Business Invest in IT...

To achieve six important business objectives.

6 Business Objectives

1. Operational Excellence.

2. New Products, Services & Business Models.

3. Customer & Supplier Intimacy.

4. Improved Decision Making.

5. Competitive Advantage.

6. Survival.

Operational Excellence

Involves a firm's focus on efficient operations and excellent supply chain management. Focuses on continuous improvement and the optimization of business processes and systems to achieve better results.

Examples: American Airlines, and Starbucks (App).

New Products, Services & Business Models

Information systems and technologies are a major enabling tool for firms to create new products and services and entirely new business models. A business model describes how a company produces, delivers, and sells a product or service to create wealth.

Examples: Apple (product), Target (service), and Uber (business model).

Customer & Supplier Intimacy

Serving customers well leads to customers returning, which raises revenues & and profits. Intimacy with suppliers allows them to provide vital inputs, which lowers costs. Intimacy between the business and its customers or suppliers refers to strengthening the bond between the two parties. An organization strives to build a lasting personal relationship with its customers and suppliers, by continually customizing its offerings to meet their needs and wants.

Examples: Personal Recommendation Systems, Replenishment Systems.

Improved Decision Making

Information systems and technologies have made it possible for managers to use real-time data from the marketplace when making decisions. IT systems like customer feedback (ratings and reviews) help businesses make informed decisions about product quality and service improvements.

Examples: Verizon web-based digital dashboard to provide managers with precise real-time information on customer complaints, network performance for each locality served, and line outages or storm-damaged lines.

Competitive Advantage

Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real-time all add up to higher sales and higher profits that your competitors cannot match.

Cost advantage: Similar product at a lower price.

Differentiation advantage: Price premium for unique products.

Example: UPS tracking system.

Survival

IT is often essential for survival, either to stay competitive or to meet legal or operational requirements.

Examples: ATM system.

Data

Streams of raw facts about events that occurred in an organization.

Information

Processed data that is shaped to a form that is useful and helpful for people and organizations to make decisions.

Functions of an Information System

Contains information about an organization and its surrounding environment. Three core activities: input, processing, and output produce the information organizations need.

Input

Data entering the system.

Process

Transformation of input into something meaningful (information).

Output

Transfer information to people who use it.

Input, Process & Output Cycle Example

Input: Letter grade obtained in a class.

Processing: TigerPaws validation.

Output: Official transcript.

Feedback

Output returned to appropriate people or activities in the organization to evaluate and refine the input.

Environmental Actors

Customers, suppliers, competitors, stockholders, and regulatory agencies, that interact with the organization and its information systems.

Information Systems Are More Than Computers.

Organizations + Technology + People.

How Information Systems Will Affect Business Careers

Common requirements for all majors:

The central role of databases.

Business analytics and intelligence systems.

Working with specialists and systems designers.

Ethical, social, legal environment and issues.

Use of IT to meet legal requirements.