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BUAD 683 Ch 1, 2, & 3
Transcript of BUAD 683 Ch 1, 2, & 3
Information Technology (IT)
- Remember DOS (Disk Operating Systems)? - Text-commands, green/black text screens?
- How are computers used now?
- Windows based/ point & click, Tactile
- Voice recognition (digital assistants)
Siri, Alexa, Cortana, Google
- Gesture-based commands
- Email, Chat, Video conferencing,
- Social Network.
Cost of Computer Storage
1993: 1 GB of storage cost $600; 2003: $5; 2007: 0.39 c; 2015: 0.03c
Now on the Cloud:
Managers & IT Partnerships
- 6500 stores, 88 countries, worlds largest apparel retailer.
- developed a fast paced, responsive supply chain.
- "fast-fashion" customer preferences -> orders to suppliers.
- new products delivered in 2-3 weeks - competitors take 2-3 months
- opportunity to sell directly to customers - Dell Online
- revenue: $1M/day in 6 mos, $2M/day in 6mos,
$3M/day in 1yr
[2017: q4 revenue of $20.1B, full-year revenue: $61.6B]
- FB: 2.23b users worldwide
- 95% Americans have cell phones
- 80% Americans shop online - 255m (22% in 2000)
- Amazon's net revenue
2013: $74.5B, 2016: $135.9B, 2017: $177.87B
- Uber's net revenue appox: 2016: $6.5B (loss: 2.8B); 2017 $37B (loss: 4.3B)
- 1965, by Dr. Gordon Moore, co-founder of Intel
- Processing power of a microchip woulddouble/ 1- 2 yrs
- Computational power has grown exponentially
- Proliferated into all devices (Mobile, Games, IoT ...)
- What about the cost of computing?
- Educated decisions made by IT Managers
- IT deployment: business driven (not the other way around) by general & functional managers.
- General/Functional Managers were not IT professionals, worked closely with IT.
- General/Functional Managers not end users of the new technologies. Other employees were the end users.
IS for Managers - CH 1, 2, 3
Power of mainframe costing $10M - 1965
= $7 computer chip in 2002
= 1 cent in 2017
"All the value of this company is in its people. If you burned down all our plants, and we just kept our people and our information files, we should soon be as strong as ever. "
- Knowledge workers, manage a team, functional area (fm), a business unit, or an organization (gm),
- Work directly with SW apps, to conduct specific tasks (MS word users)
- sophisticated end users = asset
Why should you care about IT/IS?
- More and more CEOs/COOs have a background in IT (CIOs --> CEO) & vice versa - CIOs need not be technical.
- No matter what unit you manage,
you will be heavily involved wit IT/IS decision-making.
- Work together with IT/IS
IT Trends (cont'd)
Ubiquitous Network Access
always on, everywhere
Smart home, car, appliances, plane, buses, ....
- VR, AR, AI
So, how does all this make you feel as a person and as a professional?
Information Systems (IS)
"formal, sociotechnical, organizational systems designed to collect, process, store, & distribute information."
Businesses for centuries, have been using some form of IS to procure raw material, produce, distribute & sell products............ without Technology
"refers to anything related to
, such as
networking, hardware, software, the Internet
, or the
that work with these technologies." [techterms.com]
Information Technology (IT)
4 Components of IS
4 Components of IS (cont'd)
: Hardware, Software, Telecom equipment
Series of steps needed to complete a business activity [eg: check inventory, get quote, order, receive goods, pay supplier...]
Informal Processes and Official Processes?
involved in the business process.
Managers, end users, IT professionals ... etc.
hierarchy, decentralized, loose coupling;
functional, divisional, matrix;
communication & rewards mechanisms, culture**
Why do orgs build IS?
To fulfill info processing needs, efficiency, productivity, decision-making....
External requirements: Tax or safety regulations, financial reporting,.....
Success of IS
- Is success of IS relative?
What determines IS success?
What determines the failure of IS?
abandonment, lack of use, inefficiency, unreliability
empowerment of employees, higher responsibilities, higher productivity, enable future opportunities for the firm...(Facebook & Apple apps).......
deskilling, reduction employee's responsibilities, constrain future opportunities
Outcomes of IS
Culture, Strategy, Infrastructure, External Environment
collection of beliefs, expectations, values, determines how business is conducted. Very strong component. eg: when mergers happen (oracle + ppl soft)
manner by which objectives achieved, what, how
eg: HP vs Dell (standardized devices, highly customizable)
The IT infrastructure, shared IT resources, devices, & services
competitors, business social trends, laws, incentives
IS & Organizational Change
First Order Change:
Automate - limited scope, easy, little executive involvement; phone banking to --> online banking - interface changes, not the task.
Second Order Change:
major implications for People - much more challenging, employees/customers, far reaching objective, "informate" information intensity of process changes; self-serv kiosk for airline check-in/online checkin.
Third Order Change:
Transform - requires significant managerial/executive involvement, political, most radical; Encyclopedia --> wikipedia;
Culture & IS
interdependent & bound to role by rules of position, loyalty & relatedness.
the degree to which subordinate people accept their position as natural. Small/large power distance cultures. egalitarian/obedience.
the corresponding dimension: Masculinity (winner takes all) vs Femininity (consensus-oriented, forgiving).
Anxiety in the face of the unknown vs Uncertainty-tolerant
Short- versus Long-term orientation.
Indulgence (Central America) versus Restraint (Southeast Asia).
- Firms have a culture - from dress code, to what they will buy/sell, what days, how, etc.
- Organizational culture and IS design must be aligned in order for the IS to be effective in the firm
Organizational Info Systems
- Decision making @ different levels
- Individuals have different responsibilities
- Make different types of decisions
- Carry out different types of activities
- Having the correct information is important
Transaction Processing day to day ops, short-term, structured decision making
repeatable patterns, improve effectiveness
Unstructured decision-making, rely on internal/external data sources, no formal methodologies, decisions->trends
- Decentralized, large firms, units independent
- Functional Systems: unique, homogeneous within a functional area; tailored to meet the functional area's needs, familiar language used
Lack of integration of separate systems
Functional/Hierarchical Perspectives Limitations
series of steps a firm performs to complete an economic activity
Business Process Reengineering:
Top-down approach, performance improvement through: rationalize activities, eliminate duplication, redundancy, & inefficiency - using IT. Eg: automation of billing (suppliers paid directly after delivery)
Eg: Progressive Insurance: claim adjusters worked out of vans, able to inspect a car within 9 hours (norm: 7-10 days)
Sales: $1.3B (91) - $9.5B (02) -> $23.4B (16)
Challenges of BPR
Leads to downsizing, layoffs
The Information System Cycle
- Automation of day to day tasks
- Transactions > Data repositories > Analytical tools [used for effectual decision-making]
The Integration Initiative
The process of unifying, or joining together tangible/intangible assets (networks, apps, data, knowledge, business processes).
organize, streamline, & simplify a process/application.
Dimensions: Internal - bank's paper loan application > online;
External - different firms integrate to share common resources
Business - Cohesion within units/locations. eg: buy online w/store pickup, merchandise availability at any location.
Enterprise Systems / Enterprise Resource Planning (ERP)
Class of standardized software applications that enable & support integrated business processes.
ERP + -
Standardization / flexibility
System-recommended best practices?
High costs and Risks
Supply Chain Management
Modular integrated software app that spans all org functions
A set of coordinate entities involved in moving a product from production to consumption.
Modern SCM: ERP + SCM
RFID: Radio Frequency Identification
actionable info, built over time, based on accumulated experiences of a phenomena
Knowing: what, how, why
Explicit & Tacit Knowledge
Set of activities and processes used to create, codify, gather, and disseminate knowledge within the organization
- employees generate new information, solutions identify new explanations for recurrent events.
Capturing & Storing Knowledge
- codify new knowledge and maintain an organizational memory
investments made in knowledge creation and storage pay off
Set of techniques, processes, and technologies designed to enable managers to gain superior insight and understanding of their business and thus make better decisions.
Focus on the analysis of the data generated.
Business Intelligence Infrastructue
Data repository that collects/consolidates data from multiple source systems to enable analysis. Large size/scope, for analytics, enabling data integration.
Scaled-down version of a data warehouse that focuses on the needs of a specific audience (eg: for mktg, finance etc.)
Business Intelligence Infrastructure
Online Analytical Processing (OLAP)
Software programs that enable a knowledge worker to easily and selectively extract/view data from analytical database. No help from IT is needed.
Process of automatically discovering non-obvious relationships in large databases.
Associations - one event -> next .
One event to the other.
data deviates from a pattern. Ever got a call/email from your cr card co?
customer profile based on spending history.
pattern of data helps predict future events
raw facts—events, occurrences or descriptions coded as letters and numbers and stored digitally
data in context.
data <given meaning > information - can be interpreted
identify required problem-related information and interpret it
Data - Info - Knowledge
data of a very large size, typically to the extent that its manipulation and management present significant logistical challenges.
"datasets whose size is beyond the ability of typical database software tools to capture, store, manage, and analyze,”
extremely large data sets that may be
computationally to reveal patterns,
, especially relating to human behavior and interactions.
- Volume (tera, peta, exabytes),
- Velocity (speed), &
- Variety (text, images, video sensory readings...)
3 Vs of Big Data
Customer Relationship Management (CRM)
293K Facebook status updates
3.6M Google searches
2.5M emails sent
Uber provides 45K rides
600 new page edits on Wikipedia
15.2M text messages
Data generated: approx 2.5 quintillion bytes/day
- a strategic initiative, not a technology. IT enabled.
- relies on customer personal, transactional data.
- helps firms learn about customers through data, make inferences about behaviors, needs, and value to the firm.
- to increase profitability
- Firm Centric
- Limited Predictive Ability
- uses the Internet as the environment for pooling IT resources
- building blocks of IT reside online
- access by clients is through the Internet
- utilization, payment is dynamic and agile (metered)
- utility billing model
- easily scalable
- renting virtualized HW
SaaS - Software as a Service (Office 365, Google Apps), PaaS: (platform, renting HW), IaaS: (Infrastructure, rent virtual HW, everything else is your responsibility)
Public or Private (dedicated)
Accessed as needed, location independent, elastic, pay per use, on-demand
Amazon, Google, Microsoft (Azure), IBM
Dropbox, Box, Google Drive, One Drive,
Lower Entry barriers
Thomas Watson Jr. (IBM)
What is the most important aspect of IS?
Organizational Information Systems and Their Impact
Information Systems Defined
What is ERP?
What is data?
What is Information?
What is Knowledge?
What is Big Data?
What is a CRM?
Do you work with IT/IS?
What is Information Technology ???
What are Information Systems???
How old is the concept of IS/IT???
What is the purpose of IT/IS?
Who is a manager?
- What are their responsibilities?
- What are their qualifications?
Case: FoxMyer Drugs
SAP R/3 bankrupt: 1996
Eg: Anheuser-Busch -
clipboards --> handheld devices
prices, competitor info