S2_-BI_FS25

Course Overview

• Course Name: Business Informatics I (FS25)

• Instructor: Prof. Dr. Claudio J. Tessone

• Topic: Blockchain & Distributed Ledger Technologies

Information Systems: Definition and Components

• Definition of Information Systems (IS):

  • Interrelated components designed to manage information to:

    • Support decision-making and control

    • Aid in analysis, visualization, and product creation

  • Comprised of hardware, software, people, communications networks, data, and processes.

  • Information Technology (IT) Relation:

    • Application of digital technologies for business purposes, focusing on data management, processes, storage, and exchange.

Importance of Information Systems

• Purpose of Information Systems:

  • Increase productivity and revenue aligned with long-term strategies.

• Learning Objectives:

  • Understand definitions of organisations and the features managers need to know to effectively utilize IS.

  • Examine the impact of IS on business organisations and corporate strategy.

  • Explore how companies can gain competitive advantages through the use of IS.

Organisation: Definitions and Perspectives

• Technical Definition of Organisation:

  • A stable, formal social structure processing resources to produce outputs.

  • Key Properties:

    • Stability: More stable than informal groups due to longevity and routine.

    • Legal Entity: Follows internal rules and legal statutes.

    • Social Structure: Consists of social elements actively involved in the organisation.

Three Elements of an Organisation

1. Inputs: Resources provided by the environment.

2. Transformation: The organisation transforms inputs into outputs through production processes.

3. Outputs: The products and services consumed by the environment, creating a feedback loop.

• Behavioural Definition of Organisation:

  • Collection of rights, privileges, obligations, and responsibilities which evolve over time.

  • Emphasis on group dynamics and informal rules of engagement.

Relationship Between IT and Organisations

• Two-Way Relationship:

  • Structure, processes, and organisational culture all influence the IT used.

  • IT affects organisational structures, decision-making processes, and can lead to flattening hierarchies.

Impact of Information Systems on Organisations

• Economic Impacts:

  • IS is a production factor, substituting labour (reducing middle management) and capital.

• Transaction Cost Theory:

  • Explains existence and behaviour of organisations concerning transaction costs.

  • IT lowers market transaction costs, allowing for external transactions instead of vertical integration.

• Agency Theory:

  • Focus on self-interest alignment between principals and agents in an organisation.

  • IT can reduce agency costs, facilitating growth without the proportional increase in supervision costs.

Change in Organisational Structures

• Flattening of Organisations:

  • IT enables faster decision-making, empowers lower-level employees, and reduces management layers.

  • Resistance to Change:

    • Resistance stemming from political dynamics and necessary adjustments in structure, tasks, innovation, and culture.

Networking and Competitive Advantage

• Value Chain Model:

  • A model identifying key activities that can be optimized for competitive advantages.

  • Value Web:

    • Connects a firm's value chain with those of suppliers and customers, increasing customer-driven operations.

Strategic Information Systems (SIS)

• Definition:

  • SIS influence goals, operations, products, and relationships, enabling competitive advantages.

• Examples of SIS Changing Core Business:

  • Hanover Compressor evolved from a gas compression focus to a comprehensive solution provider.

  • Cardinal Health shifted from distribution to providing innovative health solutions.

Key Takeaways

• Organisations produce output through stable structures that process environmental resources.

• The choice of IS is influenced by the characteristics of the organisation, which in turn shapes the operational environment.

• The integration of IS into management structures leads to neater hierarchies, facilitating quicker decision-making.

• Understanding competitive forces is crucial for performance, along with adapting to the ever-changing environment.

• Different value chain approaches, linear and web, impact competitive advantage.

Contact Information

• Instructor: Prof. Dr. Claudio J. Tessone

• Role: Group Leader at UZH Blockchain Center

• Email: claudio.tessone@uzh.ch