ITM 102 – Business Information Systems (part 1)
Chapter 1: Information Systems in Global Business Today
Chapter 1: Key Questions
1. How are information systems transforming business, and what is their relationship to globalization?
2. Why are information systems so essential for running and managing a business today?
3. What exactly is an information system? How does it work? What are its management,
organization, and technology components?
The Role of IS in Business Today
Strategic business objectives of information systems:
o Operational excellence
o New products, services, and business models
o Customer and supplier intimacy
o Improved decision making
o Competitive advantage
Perspectives on Information Systems
What is an information system?
A set of interrelated components that collect (or retrieve), process, store, and distribute
information to support decision making and control in an organization
From data to information Components of IS
- Data management
intranet, WWW Table 1-1 What is new in MIS?
Chapter 2: How Businesses Use Information Systems
Chapter 2: Key Questions
1. What are business processes? How are they related to IS?
2. How do IS serve the different management groups in a business?
3. How do systems that link the enterprise improve organizational performance?
4. Why are systems for collaboration and teamwork so important, and what technologies do they use?
5. What is the role of the information systems function in a business? How does IT enhance business processes?
1. increasing efficiency of existing processes
Automating steps that were manual
2. Enabling entirely new processes that are capable of transforming the businesses
Change flow of information
Replace sequential steps with parallel steps
Eliminate delays in decision making
Types of systems
Business intelligence for decision support
o Management info systems
o Decision support systems
o Executive support systems
o You need to know what the differences are among these systems: who uses them? What
type of decisions do they support? Where does the info come from?
Types of systems (org-wide)
Enterprise systems (ERP)
Supply chain management (SCM)
Customer relationship management (CRM)
Knowledge management systems (KMS)
Intranets/extranets CRM explanation and example
Gartner Group analysts‟ view of CRM:
o It‟s a concept, not a technology
o Customer service as the new marketing
311 in San Francisco
o Changing government service delivery
o Implementing new processes
Collaboration and communication systems
o Email, facebook, twitter, linkedin, second life
o Cell phones/tablets
o What are the benefits of collaboration and teamwork?
Who runs these systems?
The information systems department:
Formal organizational unit responsible for information technology services
Often headed by chief information officer (CIO)
o Other senior positions include chief security officer (CSO), chief knowledge officer
(CKO), chief privacy officer (CPO)
Information systems managers
Input from „end users‟
Chapter 3: Information Systems, Organizations, and Strategy
Chapter 3: Key Questions
1. Which features of organizations do managers need to know about to develop and use IS
successfully? What is the impact of IS on organizations?
2. How does Porter‟s competitive forces model help companies develop competitive strategies using
3. How to use the value chain to identify opportunities for using IS to enhance a business
4. Creating competitive advantage through alignment of info systems and organizational strategy What is an organization?
Technical definition: Behavioral definition:
Stable, formal social structure that takes resources A collection of rights, privileges, obligations, and
from environment and processes them to produce responsibilities that is delicately balanced over a
outputs period of time through conflict and conflict
A formal legal entity with internal rules and Informal arrangements about how things get done
procedures, as well as a social structure
Features of organizations
Routines and business processes
o Five basic kinds of organizational structure
o The kinds of information systems often reflects the type of organizational structure
Why do these matter for using IS?
Economic impacts of IT
IT changes relative costs of capital and the costs of information
Information technology is a factor of production, like capital and labor
IT affects the cost and quality of information and changes economics of information
o Information technology helps firms contract in size because it can reduce transaction costs
(the cost of participating in markets)
Organizational and behavioural impacts of IT
IT flattens organizations
o Decision making pushed to lower levels
o Fewer managers needed (IT enables faster decision making and increases span of control) Post-industrial organizations
o Organizations flatten because in post-industrial societies, authority increasingly relies on
knowledge and competence rather than formal positions
Organizational Resistance to Change
Information systems became bound up in organizational politics because they influence access to
a key resource – information
Information systems potentially change an organization‟s structure, culture, politics, and work
Most common reason for failure of large projects is due to organizational and political resistance
Implications for Design, Understanding of IS
Information systems must be developed with an understanding of the organization in which they
will be used
These must be considered: The organization‟s culture, structure, environment, the groups who will
use the IS, and the kinds of tasks, processes and decisions the information system is meant to
Michael Porter’s Competitive Forces
- model for
Response to competitive rivalry, helps to increase barriers to entry by new firms
How can companies use IS to produce products and services at a lower price than competitors
while enhancing quality and level of service? Product differentiation
Response to competitive rivalry, reduces bargaining power of buyers
How can companies use IS to enable new products or services, greatly change customer
convenience and experience?
Focus on market niche
Response to competitive rivalry, reduces power of buyers
How can companies use information systems to enable a focused strategy on a single market niche;
Increase switching costs
Part of strengthening customer intimacy results in strong loyalty
How can companies use information systems to increase switching costs?
(this helps to decrease the threat of new entrants and reduce the use of substitutes)
The Value Chain
- model helps companies
understand how they create
value within businesses
- Primary activities serve
customers directly, support
- Can apply IS to all parts of
the value chain
IS and strategic alignment
Information systems can be used to create, maintain competitive advantage
Need to understand a company‟s strategy and align (match) the info systems used with the
strategic approach, enhance core competencies
Want consistency between systems and strategy (ex. Using tools your customers already use,
social networking etc.) Chapter 4: Social, Ethical, and Legal Issues in Information Systems
Chapter 4: Key Questions
1. What social, ethical, and legal issues are raised by information systems?
2. What specific principles for conduct can be used to guide ethical decisions?
3. Why do comtemporary information systems, technology, and the internet pose challenges to the
protection of individual privacy and intellectual property?
4. How have information systems affected everyday life?
5 moral dimensions of the info age
Information rights and obligations
o Ex. Privacy, information management
Property rights and obligations
o Ex. Intellectual property, copyright
Accountability and control
o Ex. Liability
Drivers know that using the phone while driving is one of the most dangerous
things you can do on the road, but refuse to admit that it‟s dangerous when they
themselves do it
o Ex. Data quality, system errors
Quality of life
o Equity, access, boundaries
o Ex. Spam
Tech trends raising ethical issues
Information rights: privacy/freedom
PIPEDA: Personal Information Protection and Electronic Document Act
o ID purpose of collecting data o Obtain consent
o Limit collection; limit use, disclosure, retention
o Ensure accuracy & security
o Make info management policies available, personal infos
The perils of texting (pg 122)
How many wireless subscribers are there now in Canada?
How many text messages do Canadians send a day in Q1 2012?
What is the Ontario law on texting and driving?
Which of the five moral dimensions of information systems identified in this text is involved in
What are the ethical, social, and political issues raised by this case?
Which of the ethical principles described in the text are useful for decision making about texting
Identify and clearly describe the facts
Define the conflict or dilemma, and identify the higher-order values involved
Identify the stakeholders
Identify the options that you can reasonably take
Identify the consequences of your options
Ethical, social, political issues?
Ethics: is it ok to do this?
Social: what are the social factors that influence behaviours?
Political: is this something that should be the subject of a law? Who should decide what is allowed?
Ethical principles (help guide decisions)
Golden rule: do unto others as you would have them do unto you
Immanuel Kant‟s Categorical Imperative: if an action is not right for everyone to take, then it is
not right for anyone
Descartes‟ rule of change: if an action cannot be taken repeatedly, then it is not right to be taken at
Utilitarian Principle: take the action that achieves the greatest value for all concerned
Risk aversion principle: take the action that produces the least harm or incurs the least cost to all
Ethical “no free lunch” rule: assume that all tangible and intangible objects are owned by someone
else, unless there is a specific declaration otherwise Chapter 5: IT Infrastructure and Emerging Technologies
Chapter 5: Key Questions
1. What is IT infrastructure and what are its components?
2. What are the current trends in computer hardware platforms?
3. What are the current trends in software platforms?
4. What are the stages and technology drivers of IT infrastructure evolution?
5. What are the challenges of managing IT infrastructure and management solutions?
What is IT infrastructure?
The shared technology resources that provide the platform for the firm‟s specific information
Includes investment in hardware, software, and services, such as consulting, education, and
Firm wide IT services include:
Computing platforms providing computing services
Data management services
Application software services
Physical facilities management services
IT management, standards, education, research and development services
Infrastructure supports strategy Evolution of IT infrastructure
General-purpose mainframe and minicomputer era: 1959 to present
Personal computer era: 1981 to present
Client/server era: 1983 to present
Enterprise computing era: 1992 to present
Cloud Computing and Mobile Computing era: 2000 to present
Law of Mass Digital Storage
The amount of digital information is roughly doubling every year
The cost of storage is falling at an exponential rate of 100 percent per year
So – more data but cheaper to store it
Metcalfe‟s Law and Network Economics
A network becomes more valuable as more people join it – ex. Facebook
Computer Hardware Platforms
Client machines (desktops, laptops, and PDAs)
o Blade servers
o Server Farms
Mainframe systems used as giant servers for enterprise networks and corporate Web sites
Operating System Platforms
Microsoft Windows dominates the market of client machine software
Unix or Linux widely used as server software
o Linux available as open-source software
Enterprise Software Applications
Largest suppliers of enterprise software are
o PeopleSoft (acquired by Oracle)
Data management and storage
Database software: IBM (DB2), Oracle, Microsoft (SQL Server), Sybase (adaptive server
Physical data storage: EMC Corp (large-scale systems), Seagate, Maxtor, Western Digital
Storage area networks (SANs): connect multiple storage devices on dedicated network
Leading network hardware providers are Cisco, Lucent, Nortel, and Juniper
Software leaders are Microsoft, Novell, Linux, and Unix
Service vendors include Bell Canada, Primus, and regional carriers
Growth of wireless and Voice over IP (VoIP)
Hardware, software, management services to support company Web sites, (including Web hosting
services) intranets, extranets Internet hardware server market: Dell, HP/Compaq, IBM
Web development tools/suites: Microsoft (FrontPage, .NET) IBM (WebSphere) Sun (Java),
independent software developers: Macromedia/Adobe, RealMedia
Even large firms do not have resources for full range of support for new, complex infrastructure
Software integration: ensuring new infrastructure works with legacy systems
Legacy systems: older TPS created for mainframes that would be too costly to replace or redesign
Accenture, IBM Global Services, EDS, Infosys, Wipro
Linking IT all together: infrastructure
The emerging mobile digital platform
Virtualization and Multicore processors
Green computing Mobile – why is this important?
Cell phones, smartphones (BlackBerry, iPhone, Android) have assumed data transmission, Web
surfing, e-mail and IM duties
Netbooks: small, low-cost lightweight notebooks optimized for wireless communication and core
Tablets: not just the iPad
Firms off-load peak demand for computing power to remote, large-scale data processing centers
Firms pay only for the computing power they use, as with an electrical utility
Excellent for firms with spiked demand curves caused by seasonal variations in consumer demand,
ex. Holiday shopping
Saves firms from purchasing excessive levels of infrastructure
Data permanently stored in remote servers, accessed and updated over the internet by users, ex.
Grid computing: connect multiple computers together, make use of existing capacity
Virtualization: can access resources in other locations, other configurations, ex. Vapps.ryerson.ca
Linux and open-source software
Software for the Web: Java and Ajax
Web services and Service-Oriented Architecture
Mashups and Apps
Rise of linux, Open-source software
Open-source software is free and can be modified by users – but can be complex, companies often
buy linux systems/support
Developed and maintained by a worldwide network of programmers and designers under the
management of user communities
Linux is the most widely used open-source software program
Software packages and enterprise software
Software outsourcing (domestic or offshore)
Primarily for middleware, integration services, software support
Primarily for lower level maintenance, data entry, call centers, although
outsourcing for new-program development is increasing
Software as a service (SaaS)
Accessed with Web browser over internet
Ranges from free or low-cost services for individuals to business and enterprise software Users pay on subscription or per-transaction
Service Level Agreements (SLAs): formal agreement with service providers
Mashups & Apps
o Combinations of two or more online applications, such as combining mapping software
(Google Maps) with local content. Ex. Ryerson
o Small pieces of software that run on the internet, on your computer, or on your cell phone
iPhone, BlackBerry, Android
o Generally delivered over the internet
Dealing with infrastructure change
Management and governance
Making wise infrastructure investments
o Competitive forces model for IT infrastructure
o Total cost of ownership of technology assets
Problem: VocaLink is a leader in auto