Module 1 Lecture Notes Craig Kuziemsky
Lecture 1
High Level Overview of Information Systems
What is an Information System?
Purpose: To provide accurate, timely and useful information
Each element must be present and all of the elements must work together
An Information System consists of FIVE PARTS, including:
People,
Procedures,
Software,
Hardware, and
Data
Information system (IS) = IT plus procedures, and people that produce & utilize
information.
IT = hardware + software + data
o Products
o Methods
o Inventions
o Standards
Do not try to buy an IS; you cannot do it. That is because you cannot buy
people or processes.
Three core activities of information systems:
Input: Captures raw data from organization or external environment
Processing: Converts raw data into meaningful form
Output: Transfers processed information to people or activities that use it
Digital firms use information systems to enable the seamless flow of
information between different parts of the organization as well as between the
organization and its suppliers and customers
Conducting business electronically enables new levels of efficiency,
competitiveness, and profitability (i.e. strategy)
Module 1 Lecture Notes 1 Lecture 2
• Information and Communications Technology (ICT) is the largest single
component of capital investment
• The success of your business in the future may well depend on how you
make ICT investment decisions
Social Media:
Social Media is a group of Internet-based applications that build on the ideological
and technological foundations of Web 2.0, and that allow the creation and
exchange of User Generated Content.
Long Tail and Social Media
distribution and inventory costs of businesses successfully applying this
strategy allow them to realize significant profit out of selling small volumes
of hard-to-find items to many customers instead of only selling large volumes
of a reduced number of popular items. The total sales of this large number of
"non-hit items" is called "the long tail".
Business Process
• Manner in which work is organized, coordinated, and focused to produce a
valuable product or service
• Concrete work flows of material, information, and knowledge – sets of
activities
• Unique ways to coordinate work, information, and knowledge
• Ways in which management coordinates work
Manufacturing and production:
• Assembling product, checking quality, producing bills of materials
Sales and marketing:
• Identifying customers, creating customer awareness, selling
Cross-Functional Business Processes:
Transcend boundary between sales, marketing, manufacturing, and research and
development
• Group employees from different functional specialties to a complete piece of
work
• Example: Order Fulfillment Process
2 Module 1 Lecture Notes Lecture 3
Competitive advantage – a product or service that an organization’s customers
place a greater value on than similar offerings from a competitor
First-mover advantage – occurs when an organization can significantly impact its
market share by being first to market with a competitive advantage
Buyer power - high when buyers have many choices of whom to buy from and low
when their choices are few
Use IT to reduce buyer power (thus creating a competitive advantage) through
loyalty programs
Five factors to consider when assessing impact of IT on Business:
1. Internet growth and technology convergence
2. Transformation of the business enterprise
3. Growth of a globally connected economy
4. Growth of knowledge and information-based economies
5. Emergence of the digital firm
Economics of Digital Goods
Cost of producing first unit is almost the entire cost of the product: marginal
cost of producing 2 unit is almost zero
Costs of delivery over the Internet are very low
Marketing costs remain the same
Consumer costs are also reduced
Other Revenue Generation Strategies in Social Networks
Offer premium service for monthly or per service fee
Organizations partner with the social networks, paying them a monthly
service fee
Some social networks have a network of thousands of local physical venues
where members can meet; these venues may pay a fee to be associated with
the network
Module 1 Lecture Notes 3 Lecture 4
Wikis
A wiki is a website or similar online resource which allows users to add and
edit content collectively
Wikis are collaboration tools
o Blogs and chats are more turned towards conversation
Wikis are intended to maintain a series of unique documents as their content
evolves
Wikis have built-in version control
o No changes can be made without creating a record of who made those
changes
o Reversion to an earlier version is always possible
“The world is flat”
The global economic playing field has been leveled
Competition is worldwide
Few jobs or markets are constrained by geographic boundaries
Successful managers must be able to leverage technology to be successful in
this world
Flattening organizations, more virtual firms, increasing flexibility
Globalization 3.0 created a new world that is characterized by:
Worldwide communication
Worldwide collaboration without barriers
In Globalization 3.0, individuals and small groups play important roles:
individuals who:
command more information,
have more options,
exchange information more conveniently,
coordinate actions,
influence (peers, companies, governments)
Ten flatteners
1. Fall of the Berlin Wall 5. Outsourcing
2. Netscape goes public 6. Offshoring
3. Development of 7. Supply Chaining
workflow software 8. In-sourcing
4. Uploading/open 9. In-forming
sourcing 10.The Steroids
Flattener #4: Uploading / Open-Sourcing:
Self-Organizing Collaborative Communities.
Individuals as consumers and producers of content.
Fast dissemination of information, news and events.
Collaboration on open-source & free software.
Collective Intelligence:
4 Module 1 Lecture Notes people and computers who are connected and act collectively more
intelligently than individuals, groups, or computers have ever done before
Ideation Communities:
platforms where customers can post news, stories, ideas, case studies etc and
other people can rate, vote for the best ideas, comment and share ideas etc
Flattener #9: Informing
In-forming is the ability to build and deploy your own supply chain of
information, knowledge and entertainment
It is the antithesis of being told or taught. It is about self-empowering;
empowering individuals to do what they think best with the information they
want.
The opportunity for people to have private, semiprivate, or public gatherings
on the Internet regardless of geography and time
Flattener #10: Steroids
The new technologies that are amplifying and turbo-charging all other flatteners.
Computing speed and capacity
Instant messaging
Videoconferencing
Computer graphics
Wireless technologies and devices
o virtual - these processes can be done at high speed with total ease;
o mobile - can be done anywhere, anytime by anyone;
o personal - can be done by you.
o digital – all content and process are being digitized
What were the three specific examples of Digital Steroids cited by Friedman?
1: Computing Speed / Storage / Portability ;
2: Peer-to-Peer Features (IM, File Sharing);
3: Voice over IP (e.g. Skype)
Impact of Flattening on Business
Opportunities to alter how business processes are conducted (e.g. efficiency)
New opportunities for building brands and developing customer
relationships (e.g. CRM)
Companies that are better at using IS in general and the Internet in particular
do a better job of dealing with Porter’s 5 threats
Substitute products or services
o New substitutes emerge (e.g., online music lowers the value of record
stores)
Customers’ bargaining power
o Customers have access to info on products & pricing, thus can bargain
Suppliers’ bargaining power
o Suppliers have more options to sell their products
Module 1 Lecture Notes 5 Threat of new entrants
o The Internet reduces barriers to entry, such as physical location and
changes the business environment (e.g. Blockbuster & www.netflix.ca
)
Rivalry among existing competitors
o The Internet widens geographic market, increasing the number of
competitors, pressure to lower prices
Globalization has created a set of unprecedented challenges:
• Governmental challenges
• Geoeconomical challenges
• Demographic challenges
• Cultural challenges
Flattening and Business Strategies
Multidomestic Business Strategy
• Lower degree of global integration
• Higher degree of local responsiveness
Global Business Strategy
• Higher degree of global integration
• Lower degree of local responsiveness
Transnational Business Strategy
• Some operations centralized
• while others decentralized
6 Module 1 Lecture Notes Lecture 5
Social Media Crisis:
a crises issue that arises in or is amplified by social media, and results in
negative mainstream media coverage, a change in business process, or
financial loss.
Characteristics:
technology helps create a negative buzz around a brand, product, or service.
ground-up phenomenon that is largely out of the control of the business
being affected.
groundswell, “…spontaneous movement of people using online tools
More
Less
