NOTE MIS Chapter 1:
1.1_ How are information systems transforming business, and why are they so essential for running and managing a business today?
• Describe how information systems have
changed the way businesses operate and their pr oducts and services.
IS has changed the ways business operate in numbers of ways:
- Improve customer experience, respond to customer demand and enhance the operational efficiency.
For example, after using delivery service such as Grab, users can send feedback to company. By doing
that, the management would know and improve the services later.
- Traditional newspaper is replaced by online newspaper, social networking rapidly develops which is
another form for people to get quickly updated information.
- Businesses are using virtual systems to communicate with their employees, customers and managers
via systems like Zoom, Facebook groups.
- Expanding e-commerce and Internet advertising, it changes the way people buying products, leading
to the changing in business model and transformation in business activities. Company contributes more
and more capital into online flatform. For example, today, livestreaming on Fb is an emerging but
efficient method for advertising.
- Wireless communication + personal devices => connecting partner with suppliers, customers. • Identify thr
ee major new information system tr ends.
New information system trends include the emerging mobile digital platform, big data, and cloud
computing, e-commerce expansion, new business models (Netflix) , customer support services
• Describe the characteristics of a digital firm.
A digital firm is one in which nearly all the organization’s significant business relationships with
customers, suppliers, and employees are digitally enabled and mediated. Core business processes are
accomplished through digital networks. Key corporate assets are managed digitally. Any piece of
information required to support key business decisions is available at anytime and anywhere in the
firm. Digital firms’ sense and respond to their environments far more rapidly than traditional firms, so
digital firms offer extraordinary opportunities for more-flexible global organization and management,
practicing time- shifting and space- shifting.
• Describe the challenges and opportunities of
globalization in a “flattened” world.
Freely shopping about time shift and time shift (any time, any whare they Less
Globalization in a “flattened world” brings many opportunities such as Internet significantly reduced
cost of operating global scale and foreign trade, outsourcing increased. However, it still has challenges,
for instance, too difficult in educating high level skills labor- force, avoid markets for goods and
services that can be produced offshore much less expensively.
• List and describe six r
easons why information systems are so important for business today
-Operational Excellence: Information systems and technologies are some of the most important tools
available for managers to achieve higher level of efficiency and productivity in business operations
such as Amazon, Walmart, Disney, …
-New products, services, and business model: Information system and technology are a major enabling
tool to create new products, services and business model. A business model describes how a company
produces, delivers, and sells a product or service to create prosperity, particular in Ikea
-Customer and Supplier Intimacy: When a firm clearly knows its customers and serve them well, the
customers will respond to this by getting back and buying more, this has raised their revenues and
profits. With supplier, the more company can engage its suppliers, the better that supplier can provide
vital sources, it can lower the costs. For example, high-end hotels that use computers to track customer
preferences and then monitor and customize the environment
-Improvement of decision making: many firm managers do not have the right information at the time
they make the decision. So, they rely on forecasts and trying their best to guess. However, now
information systems and technologies have made it possible for managers to use realtime data for the marketplace to make decisions.
-Competitive Advantage: When firm can achieve these firm objectives (operate excellently, new
products, services, and business model, …) they have already achieved Competitive Advantage. Doing
things better than the rivals, charging less for superior products, and responding to customers and
suppliers in real time all add up to higher scale and profit that our rivals cannot match
-Survival: Information systems and technologies are sometimes driven by the industry – level charges.
Firms turn to information system and technologies to provide capability to respond to these challenges
1-2 What is an information system? How does it work? What are its management, organization, and
technology components? Why are complementary assets essential for ensuring that information
systems provide genuine value for organizations?
• Define an information system and describe the activities it performs:
Information system: is a set of interrelated components which collects, processes, stores, and distributes
information to support decision making, coordination, and control. Information systems transform raw
data into useful information through three basic activities: input, processing, and output. These
activities of information systems produce information organizations need are input has mission in
captures raw data from organization or external environment; processing converts raw data into
meaningful form, then become output that transfers processed information to people or activities that
use it; and finally, feedback has mean that output is returned to appropriate members of organization to
help evaluate or correct input stage.
• List and describe the organizational, management, and technology dimensions of information systems. 1. Organizational dimension:
This includes organization hierarchy, functional specialties, business process, culture and political interest groups. 2. Management dimension:
- Involve leadership, strategy, and management behavior. This supplies tools and information needed
by managers to allocate, coordinate, and monitor their work.
- Managers set the organizational strategy for responding to challenges, and they allocate the human
and financial resources to coordinate the work and achieve success 3. IT dimension:
Consist of computer hardware, computer software, data management technology and networking and telecommunication technology.
• Distinguish between data and information and between information systems literacy and computer literacy.
- Data are streams of raw facts representing events occurring in organizations or the physical
environment before they have been organized and arranged into a form that people can understand and use.
- Information is data that have been shaped into a form that is meaningful and useful to human beings.
- Information systems literacy is a broad-based understanding of information systems. It includes a
behavioral as well as a technical approach to studying information systems.
- In contrast, computer literacy focuses primarily on knowledge of information technology. It is limited
to understanding how computer hardware and software works.
• Explain how the Internet and the World Wide Web are related to the other technology components of information systems.
The Internet and World Wide Web have had a tremendous impact on the role that information systems
play in organizations. These two tools are responsible for the increased connectivity and collaboration
within and outside the organization. The Internet, World Wide Web, and other technologies have led to
the redesign and reshaping of organizations. They have helped transform the organization’s structure,
scope of operations, reporting and control mechanisms, work practices, workflows, and products and services.
• Define complementary assets and describe their relationship to information technology.
Complementary assets are those assets required to derive value
from a primary investment. For
instance, to realize value from automobiles requires substantial complementary investments in
highways, roads, gasoline stations, repair facilities, and a legal regulatory structure to set standards and
control drivers. Firms must rely on supportive values, structures, and behavior patterns to obtain a
greater value from their IT investments. For example, university invests in IT lab => return with tuition
fees. Value must be added through complementary assets such as new business processes, management
behavior, organizational culture, and training.
• Describe the complementary social, managerial, and organizational assets required to
optimize returns from information technology investments. - The social asset:
The internet and telecommunications infrastructure
IT-enriched educational programs raising labor force computer literacy
Standards (both government and private sector)
Technology and service firms in the adjacent markets to assist implementation
Managerial asset: strong senior management support for change, incentive systems that monitor and
reward individual innovation, an emphasis on teamwork and collaboration, training programs, and a
management culture that values flexibility and knowledge
- Organizational asset: are a supportive business culture that values efficiency and effectiveness, an
appropriate business model, efficient business processes and decentralized authority
1-3 What academic disciplines are used to study information systems, and how does each contribute to
an understanding of information systems?
The study of information systems deals with issues and insights contributed from technical and
behavioral disciplines. The disciplines that contribute to the technical approach focusing on formal
models and capabilities of systems are computer science, management science, and operations research.
The disciplines contributing to the behavioral approach focusing on the design, implementation,
management, and business impact of systems are psychology, sociology, and economics. A sociotechnical
view of systems considers both technical and social features of systems and solutions that represent the best fit between them.
• List and describe each discipline that contributes to a technical approach to information systems.
The disciplines that contribute to the technical approach focusing on formal models and capabilities of
systems are computer science, management science, and operations research. Computer science is
concerned with establishing theories of computability, methods of computation, and methods of
efficient data storage and access. Management science emphasizes the development of models for
decision-making and management practices. Operations research focuses on mathematical techniques
for optimizing selected parameters of organizations, such as transportation, inventory control, and transaction costs.
• List and describe each discipline that contributes to a behavioral approach to information systems.
A behavioral approach to information systems focuses on questions such as strategic business
integration, behavioral problems of systems utilization, system design and implementation, social and
organizational impacts of information systems, political impacts of information systems, and individual
responses to information systems.
Solutions to problems created by information technology are primarily changes in attitudes,
management, organizational policy, and behavior. For example: the disciplines contributing to the
behavioral approach focusing on behavioral issues such as the design, implementation, management,
and business impact of systems are psychology, sociology, and economics
•Sociologists study information systems: an eye toward how groups and organizations shape the
development of systems and how systems affect individuals, groups, and organizations.
•Psychologists study information systems: an interest in human decision makers perceive and use formal information.
•Economists study information systems: understanding the production of digital goods, the dynamics of
digital markets, information systems change the control and cost structures within the firm
• Describe the sociotechnical perspective on information systems
A sociotechnical system combines technical and behavioral approach to optimal organizational
performance achieved by jointly optimizing both social and technical systems used in production.
Thus, technology is supposed to be adjusted to fit the organizational and individual needs.
Organizations and individuals within the firm change from training, learning and using technology to operate and prosper.
CASE STUDY: Did information system cause Deustche bank to stumble? Identify the pr
oblem described in this case study. What management, organization, and
technology factors contributed to this problem?
The problems relate to a higher cost of funding because the central bank strengthen their rules and
regulations while the company has no reliable assets with a yield down the road. Because of dual
impact banks, banks are limiting their restrictions in terms of leading
Contribution of management: the problem is related with security. There was a lack of communication
in updating the management about the security problems they were facing in which they could have
protected themselves sooner against the attacks if they were being kept up- date- to- date
Contribution of organization: the org did not create effective strategies which resulted in term facing
lower revenue as well as many critical situations
Contribution of technology: Deutsche bank was using outdated technology which made it difficult for
them to secure important financial data in their systems What was the r
ole of information technology at Deutsche Bank? How was IT related to the bank’s
operational efficiency, decision-making capability, and business strategy?
With progressive growth in the market, Duestche bank wanted to improve in terms of its position, and
they wanted to handle its processes more efficiently. That is why they used information technology.
Information technology has contributed to cross examining fundamental aspects which leads to
improvement in the Duestche bank
Information technology related to operational efficiency: when a firm uses information technology, it
seems helpful due to the fact that it increases the company’s operational efficiency. With the use of
information technology, they choose appropriate processes which results in improving their overall
position in the market. Information technology related to making decision capabilities and business
strategies. With the application of information technology, the company makes decisions very precisely
and quickly. Improved technologies allowed banks as well as the relationship with the employees
between mainly because of strong communication between the employees and the banks revolving around IT W
as Deutsche Bank using technology effectively to pursue its business strategy? Explain your answer.
The Duestche bank was not using technology effectively to pursue its business strategy. The bank
instead strategized to pit different teams against each other, which pushed the use of other systems
because teams and traders were willing to share their date.
What solution for Deutsche Bank was pr
oposed? How effective do you think it will be? Explain your answer.
Different types of solutions were proposed for the Duestche bank. Pursuing these solution would fix
these many issues that are currently bringing the bank down. In July 2015, the bank had an ineffective
business process and old technology. The solve that the CEO standardized the bank system which
enhanced date and reporting improved. One of the solutions for DB was to update and standardize their
information technology system, which would establish a more modern platform for presenting new
services. “To modernize its IT infrastructure, the bank is reducing the number of its individual
operating systems that control the way a computer works. The improvements are expected to reduce costs by 800 mil euros”