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Dr. Atanu Rakshit
Email: atanu.rakshit@iimrohtak.ac.in
Text Book:
Management Information Systems: Managing
the Digital Farm by Ken Laudon, Jane Laudon
and Rajanish Dass, 11/e, Pearson Publication,
Reference Material:
Management Information Systems by James A
ORrien, George M Marakas and Ramesh Behl,
9/e, McGraw Hill, 2010
Reference Material (Contd.):
Managent Information Systems by Mahadeo
Jaiswal and Monika Mital, Oxford Univ. Press,
Decision Support and Business Intelligence
Systems by Efraim Turban, Ramesh Sharda and
Dursun Delen, 9/e, Pearson Publication, 2011
Information Technology Management by Henry
C. Lucas, Jr. Tata McGraw-Hill Publication, 2011
Harvard Business Publication
Sessions Plan
Information system and its impact in business in todays
Classification of types of information systems in an
organization: Operational, MIS, DSS, ESS, ES
Information Systems, Organizations and Strategies
Emerging Technologies: Virtualization, Cloud Computing,
SOA, BPM, Telecommunication and Wireless
Enterprise Systems ERP, CRM, SCM, etc
Data Management Systems: RDBMS, Data
Warehousing, OLAP, Data Quality etc.
Information Systems and
its Impact in Todays
Business Scenarios
Explain why knowledge of information systems
is important for business professionals and
identify five key areas of information systems

Give examples to illustrate how the IT Driven
business applications can support a firms
business processes, managerial decision
making, and strategies for competitive
Information Systems in
Global Business Today
Understanding the effects of information systems
on business and their relationship to

Explain why information systems are so essential
in business today.

Define an information system and describe its
management, organization, and technology

Define complementary assets and explain how
they ensure that information systems provide
genuine value to an organization.
Describe the different academic disciplines used
to study information systems and explain how
each contributes to our understanding of them.
Explain what is meant by a sociotechnical
systems perspective.
Cricket is fast-paced, high-energy sport, high-stack with big
business opportunity

Each team in IPL pays their players ranging from 20 lakh to 2
crore per year
Objective: Elegant performance for most of the players leads
to more wins implies more money business opportunities for
the team.
Problem: Lack of historical and statistical data match-wise,
country-wise, player-wise hard data usable in decision-making
processes, costly and competitive market.
IPL Teams Strike Gold with
Information Technology
A Company called Sport Mechanics providing the
solution for requirement.
Solutions: Developed a new system designed to collect
and organize data using video clips of games.
Synergy Sports Technology tags video of each game with
hundreds of descriptive categories and allows coaches
and players to stream game footage from the Web.
Demonstrates ITs role in innovation and improving
business processes.
Illustrates how the Web has allowed businesses to use
new tools to analyze critical data.

IPL Team Strike Gold with
Information Technology
ToI dated 02/01/2012
John Chambers, Global Chairman and CEO,
Intelligent IT Wave / Infrastructure
IT and Communication resources are more Virtual,
Visual, Social, Mobile and Video enabled than before
ToI dated 03/01/2012
IITs have allowed MIT to use their Open
Courseware through NPTEL (National
Programme for Technology Enhanced Learning)
How information systems are transforming business
Increase in wireless technology use, Web sites
Resource Optimization (ERP and SCM)
Shifts in media and advertising
New federal security and accounting laws

Globalization opportunities
Internet has drastically reduced costs of operating on
global scale
Presents both challenges and opportunities

The Role of Information Systems in
Business Today
The Role of Information Systems in
Business Today
Information Technology Capital Investment
Information technology investment, defined as hardware, software, and communications equipment,
grew from 32% to 51% between 1980 and 2008.
Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National
Income and Product Accounts, 2008.
In the emerging, fully digital firm
Significant business relationships with customers,
suppliers and employees are digitally enabled and
Core business processes are accomplished through
digital networks within or across organizations
Key corporate i.e., IP, Financial, Human assets etc. are
managed digitally

Digital firms offer greater flexibility in
organization and management
Time shifting 24/7, space shifting Global work place

The Role of Information Systems in
Business Today
Growing interdependence between ability to use
information technology and ability to implement
corporate strategies and achieve corporate goals

Business firms invest heavily in information
systems to achieve six strategic business

Operational excellence
New products, services, and business models
Customer and supplier intimacy
Improved decision making
Competitive advantage
The Role of Information Systems in
Business Today
Operational excellence:
Improvement of efficiency to attain higher profitability
Information systems, technology an important tool in
achieving greater efficiency and productivity
Wal-Marts RetailLink system links suppliers to stores
for superior replenishment system
The Role of Information Systems in
Business Today
New products, services, and business
Business model: describes how company produces,
delivers, and sells product or service to create wealth
Information systems and technology a major enabling
tool for new products, services, business models
Examples: Apples iPod, iTunes, and iPhone, Netflixs
Internet-based DVD rentals
The Role of Information Systems in
Business Today
Customer and supplier intimacy:
Serving customers well leads to customers returning,
which raises revenues and profits
Example: High-end hotels that use computers to track customer
preferences like room temperature, check-in time, frequent
dialed number, television channels etc. and use to monitor and
customize environment

Intimacy with suppliers allows them to provide vital
inputs, which lowers costs
Example: J.C.Penneys information system which links sales
records to contract manufacturer
The Role of Information Systems in
Business Today
Improved decision making
Without accurate information:
Managers must use forecasts, best guesses, luck
Leads to:
Overproduction, underproduction of goods and services
Misallocation of resources
Poor response times
Poor outcomes raise costs, lose customers
Example: Verizons Web-based digital dashboard to
provide managers with real-time data on customer
complaints, network performance, line outages, etc.
The Role of Information Systems in
Business Today
Operational excellence:
Improvement of efficiency to attain higher profitability
New products, services, and business models:
Enabled by technology
Customer and supplier intimacy:
Serving customers raises revenues and profits
Better communication with suppliers lowers costs
Improved decision making
More accurate data leads to better decisions

The Role of Information Systems in
Business Today
Competitive advantage
Delivering better performance
Charging less for superior products
Responding to customers and suppliers in
real time
Example: Toyota and TPS (Toyota Production
System) enjoy a considerable advantage over
competitors information systems are critical
to the implementation of TPS

The Role of Information Systems in
Business Today
Information technologies as necessity of
May be:
Industry-level changes, e.g. Citibanks introduction
of ATMs
Governmental regulations requiring record-keeping
Examples: Toxic Substances Control Act, Sarbanes-
Oxley Act
The Role of Information Systems in
Business Today
The Role of Information Systems in
Business Today
The Interdependence Between Organizations and Information
In contemporary systems there is a growing interdependence between a firms information
systems and its business capabilities. Changes in strategy, rules, and business processes
increasingly require changes in hardware, software, databases, and telecommunications.
Often, what the organization would like to do depends on what its systems will permit it to do.
Implement Business Strategies to obtain Business
Business Operation for optimize resources and
Extended Business Operation for customer support
and increase profitability & loyalty
Business Analytics for smarter and predictive
Information system:
Set of interrelated components
Collect, process, store, and distribute information
Support decision making, coordination, control
operations, analyze problems, new product ans services

Information vs. data
Data are streams of raw facts
Information is data shaped into meaningful form
Perspectives on Information Systems
Perspectives on Information Systems
Raw data from a supermarket checkout counter can be processed and organized
to produce meaningful information, such as the total unit sales of dish detergent
or the total sales revenue from dish detergent for a specific store or sales
Data and Information
Information system: Three activities
produce information organizations need
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
Perspectives on Information Systems
Output returned to appropriate members of
organization to help evaluate or correct input

Computer/Computer program vs.
information system
Computers and software are technical foundation
and tools, similar to the material and tools used to
build a house
Perspectives on Information Systems
Perspectives on Information Systems
An information system contains information about an organization and its surrounding environment.
Three basic activitiesinput, processing, and outputproduce the information organizations need.
Feedback is output returned to appropriate people or activities in the organization to evaluate and
refine the input. Environmental actors, such as customers, suppliers, competitors, stockholders,
and regulatory agencies, interact with the organization and its information systems.
Functions of an Information System
Perspectives on Information Systems
Using information systems effectively requires an understanding of the organization,
management, and information technology shaping the systems. An information
system creates value for the firm as an organizational and management solution to
challenges posed by the environment.
Information Systems Are More Than Computers
Organizational dimension of information
Key elements of organization are people,
structure, business processes, politics and
Hierarchy of authority, responsibility
Senior management
Middle management
Operational management
Knowledge workers
Data workers
Production or service workers
Perspectives on Information Systems
Perspectives on Information Systems
Business organizations are hierarchies consisting of three principal levels:
senior management, middle management, and operational management.
Information systems serve each of these levels. Scientists and knowledge
workers often work with middle management.
Levels in a Firm
Organizational dimension of information
systems (cont.)
Separation of business functions
Sales and marketing, Human resources, Finance and accounting,
Manufacturing and production etc.
Unique business processes
Unique business culture fundamental sets of
assumptions, values, way of doing things
Organizational politics People occupy different
positions with different specialties, concerns and
perspective. Leads to diverge viewpoints of resources,
rewards and punishments - conflicts
Perspectives on Information Systems
Management dimension of information
Make decisions, formulate action plan
Managers set organizational strategy for
responding to business challenges
Allocates all resources and coordinate work for
In addition, managers must act creatively:
Creation of new products and services
Occasionally re-creating the organization
Perspectives on Information Systems
Technology dimension of information
Computer hardware and software
Data management technology
Networking and telecommunications technology
Networks, the Internet, intranets and extranets, World
Wide Web
IT infrastructure: provides platform that system is
built on
Cloud Computing
Perspectives on Information Systems
UPS Competes Globally with Information Technology
What are the inputs, processing, and outputs of
UPSs package tracking system?
Inputs: The inputs include package information, customer
signature, pickup, delivery, time-card data, current location
(while en route), and billing and customer clearance
Processing: The data are transmitted to a central computer and
stored for retrieval. Data are also reorganized so that they can
be tracked by customer account, date, driver, and other
Outputs: The outputs include pickup and delivery times,
location while en route, and package recipient. The outputs
also include various reports, such as all packages for a specific
account or a specific driver or route, as well as summary
reports for management.
Perspectives on Information Systems
What technologies are used by UPS
Technologies include handheld computers (DIADs), barcode
scanning systems, wired and wireless communications
networks, desktop computers, UPSs central computer
(large mainframe computers), and storage technology for
the package delivery data.
UPS also uses telecommunication technologies for
transmitting data through pagers and cellular phone
The company uses in-house software for tracking
packages, calculating fees, maintaining customer accounts
and managing logistics, as well as software to access the
World Wide Web.
Perspectives on Information Systems
How are these technologies related to UPSs
business strategy?
UPS has used the same strategy for over 90 years. Its
strategy is to provide the best service and lowest rates.
One of the most visible aspects of technology is the
customers ability to track his/her package via the UPS Web
site. However, technology also enables data to seamlessly
flow throughout UPS and helps streamline the workflow at
UPS. Thus, the technology described in the scenario
enables UPS to be more competitive, efficient, and
The result is an information system solution to the business
challenge of providing a high level service with low prices in
the face of mounting competition.
Perspectives on Information Systems
What problems do UPSs information systems
Some problems this information system solves relate directly
to logistics and supply chain activities, not just for itself, but
also for other companies. These services include supply
chain design and management, freight forwarding, customs
brokerage, mail services, multimodal transportation, and
financial services, in addition to logistics services.
Because of the advanced integration of its technology, UPS
can provide these services cheaper and more efficient than
most companies can create them in-house.
Perspectives on Information Systems
What are the key elements for the success of UPS
Barcoded package information also ensure data quality
User friendly handheld computing device (Delivery
Information Acquisition Device (DIAD))
Most efficient delivery route for each driver considering
traffic condition, weather conditions and location for
each stop
Saves 28 million truck travelling and 3 million gallons of
fuels in each year
Effective workflow systems seamless with business
Perspectives on Information Systems
What are the key elements for the success of UPS
Customer can also know the status through tracking
Customer self service capabilities
Seamless integration of the tracking systems with back
end application and also with devices
System provides the complete tracking data for effective
control and improvement
Customers view UPSs technology as value-added
services as opposed to increasing the cost of sending
Perspectives on Information Systems
Dimensions of UPS tracking system
Procedures for tracking packages and managing
inventory and provide information
Monitor service levels and costs
Handheld computers, bar-code scanners, networks,
desktop computers, etc.
Perspectives on Information Systems
Business perspective on information systems:
Information system is instrument for creating value
Investments in information technology will result in
superior returns:
Productivity increases
Revenue increases
Superior long-term strategic positioning

Business information value chain
Raw data acquired and transformed through stages that
add value to that information
Value of information system determined in part by extent
to which it leads to better decisions, greater efficiency,
and higher profits

Perspectives on Information Systems
Perspectives on Information Systems
From a business perspective, information systems are part of a series of value-adding activities
for acquiring, transforming, and distributing information that managers can use to improve
decision making, enhance organizational performance, and, ultimately, increase firm
The Business Information Value Chain
Investing in information technology does not
guarantee good returns

Considerable variation in the returns firms receive
from systems investments

Adopting the right business model
Supportive values, structures and behavior pattern
Investing in complementary assets (organizational and
management capital)
Perspectives on Information Systems
Complementary assets:
Assets required to derive value from a primary
investment like for Automobiles requires
investment in highway, roads, petrol pump,
service points etc.
Firms supporting technology investments with
investment in complementary assets receive
superior returns
E.g.: invest in technology and the people to
make it work properly
Perspectives on Information Systems
Complementary assets include:
Organizational investments, e.g.
Appropriate business model
Efficient business processes
Managerial investments, e.g.
Incentives for management innovation
Teamwork and collaborative work environments
Social investments, e.g.
The Internet and telecommunications infrastructure
Technology standards
Perspectives on Information Systems
Perspectives on Information Systems
The study of information systems deals with issues and insights
contributed from technical and behavioral disciplines.
Contemporary Approaches to Information Systems
Technical approach
Emphasizes mathematically based models
Computer science, management science,
operations research
Behavioral approach
Behavioral issues (strategic business integration,
implementation, etc.)
Psychology, economics, sociology
Contemporary Approaches to
Information Systems
Management Information Systems
Combines computer science, management science,
operations research and practical orientation with
behavioral issues

Four main actors
Suppliers of hardware and software
Business firms
Managers and employees
Firms environment (legal, social, cultural context)
Contemporary Approaches to
Information Systems
Approach of this book: Sociotechnical view

Optimal organizational performance achieved by
jointly optimizing both social and technical systems
used in production

Helps avoid purely technological approach
Contemporary Approaches to
Information Systems
Change Business Impact
Cloud Computing Dynamic and Agile Business Need
Growth of SaaS Effective Business Model
Mobile Digital Platform Solution Penetrations
Online Collaboration and
Social Networking
Effective user involvement
BI Intelligent and Smart Decisions
Mobile Tools Smartphones,
Mobile Internet Devices
Accuracy, Speed and richness
Virtual Meeting Improving Collaboration and Decision making
Web 2.0 Collaboration and Online Community
Outsourcing Production Reduce production and service cost
Telework in the workplace Work from home enhance productivity
Q & A