In this chapter, the learning objectives are: Understand the concept of a system and how it relates to information systems; explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need; give examples to illustrate how business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage;...
Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-1 Chapter Foundations of Information Systems in Business Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-2 Learning Objectives Explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need Give examples to illustrate how the business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-3 Learning Objectives Provide examples of several major types of information systems from your experiences with business organizations in the real world Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-4 Learning Objectives Provide examples of the components of real world information systems Illustrate that in an information system, people use hardware, software, data and networks as resources to perform input, processing, output, storage, and control activities that transform data resources into information products Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-5 Why Study Information Systems? • Information technology can help all kinds of businesses improve the efficiency and effectiveness of their business processes, managerial decision making, and workgroup collaboration, thus strengthening their competitive positions in a rapidly changing marketplace Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-6 Why Study Information Systems • Internet-based systems have become a necessary ingredient for business success in today’s dynamic global environment • Information technologies are playing an expanding role in business Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-7 Case #1: Athens Olympics Network • What makes the Olympic Games a unique project is that the athletes aren’t going to stop running just because the server does • Major Components: • Games Management System (GMS) • Information Diffusion System (IDS) Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-8 Case #1: Athens Olympics Network GMS: • Managed access accreditations for the games IDS: • Collected and distributed event results and rankings to press agencies and certain websites • Live feed for broadcasters commenting on events • Results, rankings, statistics and biographies available to commentators seconds after the athletes crossed the line Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-9 Case #1: Athens Olympics Network Goals & Constraints: • Reduce the amount of risk 100% availability Non-negotiable deadline Copyrightâ2006,TheMcGrawưHillCompanies,Inc.Allrightsreserved - 10 Recognizing Information Systems Fundamental Components of IS • People, hardware, software, data and network resources used • Types of information products produced • Input, processing, output, storage and control activities performed Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 60 Case #3: Failure to Success with IT Aviall on the Ropes: • A failed enterprise resource planning system that had been designed to automate and integrate the company’s order processing, inventory control, financial accounting, and human resources business systems • Couldn’t properly order or ship items to customers • Quarterly sales dropping • Airline industry shrinking Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 61 Case #3: Failure to Success with IT Goals: • Save Aviall from financial disaster • Turn Aviall from a catalog business into a full-scale logistics business that hundreds of aviation parts manufacturers and airlines could depend on for ordering, inventory control, and demand forecasting Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 62 Case #3: Failure to Success with IT Challenges: • Integrate five Web-enabled e-business software systems from different software providers • Customized pricing for 17,000 customers who receive various types of discounts • 380,000 different aerospace parts Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 63 Case #3: Failure to Success with IT Benefits of Aviall.com: • Customer order obtained via web costs only 39 cents compared with $9 for an order taken via telephone • Sales force freed from routine order taking can devote more time to developing relationships with customers • Customers have the ability to transfer orders from an Excel spreadsheet directly to website Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 64 Case #3: Failure to Success with IT Benefits of Aviall.com (con’t): • Customers can receive pricing and availability information on parts within seconds • Helps build relationships with suppliers by providing them with customer ordering data that enables them to better match production with demand Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 65 Case #3: Aviall Inc Why you think that Aviall failed in their implementation of an enterprise resource planning system? What could they have done differently? How has information technology brought new business success to Aviall? How did IT change Aviall’s business model? How could other companies use Aviall’s approach to the use of IT to improve their business success? Give several examples Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 66 Case #4: This Call is Being Monitored Goals: • Increase customer loyalty • Reduce number of calls forwarded to internal help desk Improve decision making Copyrightâ2006,TheMcGrawưHillCompanies,Inc.Allrightsreserved - 67 Case #4: This Call is Being Monitored Witness Systems Call-center Software & CallMiner: • Records conversations • Captures keystrokes • Tracks caller choices • Transcribes conversations into text Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 68 Case #4: This Call is Being Monitored Benefits: • Revenues increased 60% • 20% fewer calls sent to help desk saving $1 million • Customer satisfaction rose 10% • E-ticket sales increased 8% • Reduced staffing needs Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 69 Case #4: This Call is Being Monitored What are the business benefits of the CallMiner system? Provide some additional examples beyond those discussed in the case How can new technologies like CallMiner help companies improve their customer service and gain a competitive edge in the marketplace? Explain Andre Harris refers to calls to reconfirm a flight as “quite frankly, low-value calls.” Why are they classified as low value? Why you think so many customers are placing such calls? Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 70 Summary • There is no longer a distinction between an IT project and a business initiative • Information systems are an important contributor to operational efficiency, employee productivity and morale, and customer service and satisfaction Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 71 Summary • Information systems are a major source of information and support needed to promote effective decision making by managers and business professionals • Information systems can be categorized based on their intended purpose Copyrightâ2006,TheMcGrawưHillCompanies,Inc.Allrightsreserved - 72 Summary Managing and using information systems can pose several challenges including the development process and ethical responsibilities Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 73 Chapter End of Chapter Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 74 ...Chapter Foundations of Information Systems in Business Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-2 Learning Objectives Explain why knowledge of information systems. .. Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved - 15 Information Systems vs Information Technology • Information Systems (IS) – all components and resources necessary to deliver information and information processing... Copyright © 2006, The McGrawHill Companies, Inc. All rights reserved 1-6 Why Study Information Systems • Internet-based systems have become a necessary ingredient for business success in today’s dynamic global environment • Information