CHAPTER 1, Section 1.1 – Information Systems’ Role in Business
• We need to study information systems because they are everywhere in business. It provides great in insight to anyone learning about business.
• Business functions that receive the greatest benefits from information systems is (1) customer service, (2) finance, (3) sales and marketing, (4) IT
operations, (5), Operations management, (5) HR, (6), security.
• The goal of information systems is that it reduces costs and improves productivity. It also improves customer loyalty and satisfaction, it creates
comepetitive advantage. It generates growth, and it allows for global expansion.
• Businesses undertake enterprise-wide initiatives to achieve broad general business goals such as reducing costs. Information technology plays a
critical role in deploying such initiatives by facilitating communication and increasing business intelligence. For example, instant messaging and
WiMax allow people across an organization to communicate in new and innovative ways.
Departmental Structure of a Typical Organization
• Functional areas are anything but independent in a business. They are interdependent.
• Sales must rely on information from operations to understand inventory, place orders, calculate transportation costs, and gain insight into product
availability based on production schedules.
• For an organization to succeed, every department must work together.
Information Systems Basics
• Information systems (IS): computer based tools that people use to work with information and that support the information and information-
processing needs of an organization. It can be an important enabler of business success and innovation. Information systems are most useful when
they leverage the talents of people. Information systems are not useful unless the right people know how to use and manage them effectively.
• Information Technology (IT): the acquisition, processing, storage, and dissemination of vocal, pictorial, textual, and numerical information by a
microelectronics-based combination of computing and telecommunications.
• Management Information Systems (MIS): The function that plans for, develops, implements, and maintains IT hardware, software, and
applications that people use to support the goals of an organization.
Data, Information, and Knowledge
• Data are raw facts that describe the characteristics of an object or event. Characteristics for a sales event could include the date, item number, item
description, quantity ordered, customer name, and shipping details.
• Information is data converted into a meaningful and useful context. Information from sales could include best-selling item, workst-selling item, best
customer and worst.
• Knowledge when information can be acted upon. This is actionably information. You can make decisions with knowledge.
• The plans and goals of the MIS department must align with the plans and goals of the organization.
• Information systems can enable an organization to increase efficiency in manufacturing, retain key customers, skeek out new sources of supply
and introduce effective financial management.
• Some managers don’t know how to use and manage IS effectively, so if you do know how to use it, you’re in a good position for success.
• KEY RESOURCES: people, processes, and information systems (in that order of priority) are linked and are essential for the creation of
infroatmion. If one fails, they all fail.
• An organization’s culture plays a large role in determining how successfully it will share information. • Culture influences the way people use information and reflects the importance that company leaders attribute to using information in achieving
success or avoiding failure.
• FOUR COMMON INFORMATION SHARING CULTURES THAT EXIST: information-functional, information-sharing, information-inquiring, and
o Information-Functional culture: Employees use information as a means of exercising influence or power over others. EXAMPLE: a
sales manager refuses to share information with marketing. This causes marketing to need the sales manager’s input each time a new
sales strategy is developed. POWER OVER OTHERS.
o Information-sharing culture: employees across departments trust each other to use information (esp about problems and failures) to
o Information-inquiring culture: employees across departments search for information to better understand the future and align
themselves with current trends and new directions.
o Information-Discovery Culture: employees across departments are open to new insights about crisis and radical changes and seek
ways to create competitive advantages.
• If an organization operates with an information-functional culture, it will have a great degree of difficulty operating. Getting products to market
quickly is going to be a challenge.
• If an organization operates with an information-discovery culture, it can get products to market quickly. You can also see a 360-degree view of its
entire organization. Employees can use this view to better understand the market and create new products that offer a competitive advantage.
Roles and Responsibilities in Information Systems
• Employees must work closely together to develop strategic initiatives that create competitive advantages.
• CHIEF INFORMATION OFFICER (CIO): an executive-level position that involves high-level strategic planning and management of
informationsystems pertaining to the creation, storage, and use of information by a business. They are responsible for overseeing all uses of
information systems. They have to have deep understanding of information systems and business. They need to be able to communicate to others
in the organization how information systems can be used for the benefit of the enterprise.
o Role of the CIO is as:
MANAGER: ensure the delivery of all IS projects, on time and within budget.
LEADER: ensure strategic vision of IS is in line with the strategic vision of the organization.
COMMUNICATOR: advocate and communicate the IS strategy by building and maintaining strong executive relationships.
o The priorities of a CIO is:
Increasing enterprise growth
Attracting and retaining new customers
Reducing enterprise costs
Creating new products and services
Delivering operational results
Improving marketing and sales effectiveness
Expanding into new markets and geographies • CHIEF TECHNOLOGY OFFICER (CTO): responsible for ensuring the throughput speed, accuracy, availability and reliability of an organization’s
information technology. They have direct responsibility for ensuring the efficiency of IT resources used in information systems throughout the
organization. They report to the CIO.
• CHIEF SECURITY OFFICER (CSO): responsible for ensuring the security of information systems, and developing strategies and technical
safeguards against attacks from hackers and viruses.
• CHIEF PRIVACY OFFICER (CPO): responsible for ensuring the ethical and legal use of information within an organization. Many of them are
lawyers by training, enabling them to understand the often comple legal issues surrounding the use of information and information technology.
• CHIEF KNOWLEDGE OFFICER (CKO): responsible for collecting, maintaining, and distributing an organization’s knowledge. They design
processes and information systems that make it easy for people to reuse knowledge. CKO position will need to be replaced very soon because the
technology is evolving very quickly. And they need to keep up to date, and it might be better to hire someone that knows how to deal with the
The information and communications technology council believe that they will need to hire 106 000 ICT workers from 2011-2016 in Canada, because of
the unique mix of business skills and technical skills required. This is going to be a problem in all regions of Canada. Shortages will increase when
employers are looking for individuals with leading edge skills or with particular combinations of domain experience and ICT expertise.
IT IS THE CIO’S RESPONSIBILITY to ensure effective communications between business and IS personnel. While the CIO assumes the responsibility
on an enterprise-wide level, it is each employee’s responsibility to communicate effectively on a personal level.
CHAPTER 1, SECTION 1.2 – Identifying Competitive Advantages
• A competitive advantage is a product or service that an organization’s customers place a greater value on than similar offerings from a competitor.
• Competitive advantages are temporary.
• FIRST-MOVER ADVANTAGE: occurs when an organization can significantly impact its market share by being first to market with a competitive
advantage. Fed=ex is an example of a first-mover. They created a customer self-service software that allows people and organization to request
parcel pickups, print mailing slips, and track parcels online. Today customer self-service on the internet is standard.
• Organizations develop their competitive advantages, they must pay close attention to their competition through environmental scanning.
Environmental scanning: IS THE ACQUISITION AND ANALYSIS OF EVENTS AND TRENDS IN THE ENVIRONMENT EXTERNAL TO AN
ORGANIZAITON. Information technology has the opportunity to play an important role in environmental scanning.
• Organizations use three common tools to analyze and develop competitive advantages:
o Five forces Model
o Three generic strategies