Business Information Systems

What is BIS?
refers to the use of information technology and computer systems to manage and support
various aspects of business operations and decision-making.

It's like the brain and muscles of a company that helps organize its info and make sure
everything is operating smoothly.

They are a combination of software, hardware, data, and people that work together to
collect, process, store, and share information to help businesses or individuals make
decisions and perform tasks more efficiently.

What is IS & IT?

IT is a part of IS.

IT is popular in business because: 1) Capital management

2) Foundation of doing business 3) Productivity 4) Strategic operation and advantages

Role of IS in Business

● Investing in IT can reduce the overall cost of a business and bring superior results.
● Everything is becoming fully digital now.
● Helps in time shifting and space shifting leading to flexibility in org.
● There is a growing interdependence between ability to use information technology
and ability to implement corporate strategies and achieve corporate goals
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Business firms invest heavily in information systems to

achieve 6 strategic business objectives:
1. Operational excellence

- IS help to be → Fast + efficient = Increased profit

2. New products, services, and business models

- IS help to create new products, services, and business models.

- Business model: how a company produces, delivers, and sells its
products and services

3. Customer and supplier intimacy

- To develop loyalty from customers and connection with suppliers.

4. Improved decision making

- Using IS by managers to predict and forecast to increase production

and reduce risks. They can use real-time data to aid decision making.

5. Competitive advantage

- Using BIS to gain advantage over others and come up with better
products in the market.

6. Survival

- May need IS simply to keep up with the modern technology trends.

Data(raw facts) and information (data that are useful)

Functions of an information system:

Input: Take raw data from org and

external environment

Processing: Data —> Information

Output: transfer info to ppl or

activities that use it.

Feedback: output returned to help

evaluate and correct input stage.

DIMENSIONS OF IS:
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1. Organizational Dimensions of IS

Information systems serve each of

these levels.

Scientists and knowledge workers often

work with middle management.

Separation of business functions

2. Management dimension of information systems

- Managers set organizational strategy for responding to business challenges

– In addition, managers must act creatively:

3. Technology dimension of information systems

- Computer hardware and software
- Data management technology
- Networking and telecommunications technology
- IT infrastructure: provides the platform that system is built on.
4. Dimensions of UPS tracking system
- Organizational: Procedures for tracking packages and managing inventory and
provide information
- Management: Monitor service levels and costs
- Technology: Handheld computers, bar-code scanners, networks, desktop
computers, etc.

There is considerable variation in the returns firms receive from systems investments

• Factors: Adopting the right business model, Investing in complementary assets

(organizational and management capital)
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*The Business Information Value Chain is a concept that illustrates how information flows
through an organization and how it can create value at each stage of its journey

3 important dimensions of IS: need to understand and balance these dimensions of

information systems in order to create business value.

1. Organizations
2. Managers
3. Technology

IT is one of the important tools for managers, such as hardware, software, storage,
communications technology, and networks.

There can be variation on the return of IT investments:

- Firms supporting technology investments with investment in complementary assets

receive superior returns.
- Complementary Assets are those required to derive value from a primary
investment.

There can be many approaches to IS:

1. Contemporary approaches to IS
- refers to the most current and up-to-date strategies, technologies, and
practices used in the field of information systems.(both tech and behavioral)
2. Technical approach
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- Emphasizes mathematically based models such as Computer science,

management science, operations research
3. Behavioral approach
- Behavioral issues (strategic business integration, implementation, etc.)
Psychology, economics, sociology
4. Sociotechnical view
- Optimal organizational performance achieved by jointly optimizing both
social and technical systems used in production.
- Information systems are sociotechnical systems (composed of machines,
devices, and “hard” physical technology and required substantial social
organizational, and intellectual investments to make them work properly)

Week 2. Global E-business

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How does IT enhance business processes?

1. Increasing efficiency of existing processes

2. Enabling entirely new processes that are capable of transforming the businesses

3 different level of organizations that IS serve:

1. Operational-level systems: support operational managers, answer routine questions,

keep track of the elementary activities and transactions

2. Management-level systems: serve the monitoring, controlling, decision-making, and

administrative activities. In general, it provides periodic reports rather than instant
information on operations

3. Strategic-level systems: help senior management tackle and address strategic issues
and long-term trends…

4 Major types of systems:

1. Transaction Processing Systems (TPS)

- Perform and record daily routine transactions necessary to conduct
business.
- Predefined goal amd decision making.
2. Management Information Systems (MIS)
- middle management, reports on firms current performance, answer to
routine Q.
3. Decision-Support Systems (DSS)
- Middle management, nonroutine decision makers, model and data driven
DSS.
4. Executive Support Systems (ESS)
- Support senior management, non routine decisions, incorporate data
about external event.

Relationships of systems to one another:

- Interrelationships among systems.

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- each department firm has their own system and therefore must have interrelation
to transfer data.
- In contemporary digital firms, the different types of systems are closely linked to
one another. This is the ideal.

Systems from a functional perspective.

1. Sales and marketing

2. Manufacturing and Production Systems
3. Financing and Accounting Systems
4. Human resource systems
5. Business processes and information systems
6. Systems for Enterprise-Wide Process Integration
7. ERP (ENTERPRISE RESOURCE PLANNING) SYSTEMS
8. Supply Chain Management (SCM) Systems
9. Customer Relationship Management (CRM) Systems
10. Knowledge Management Systems (KMS)

INTRANETS AND EXTRANETS

• Intranets: Internal networks based on Internet standards. Often are private access area
in company’s Web site

• Extranets: Company Web sites accessible only to authorized vendors and suppliers
Facilitate collaboration.

E-BUSINESS, E-COMMERCE, AND E-GOVERNMENT

● E-business: Use of digital technology and Internet to drive major business

processes
● E-commerce: Subset of e-business. Buying and selling goods and services
through Internet
● E-government: Using Internet technology to deliver information and services to
citizens, employees, and businesses

Collaboration
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Social business

Requirements and benefits of collaboration

Week 3 Information systems, organization

and strategy
After an organization has been established, an information system is set up depending
on the strategy and structure of an organization to give out relevant outcomes. VICE
VERSA

THE TWO-WAY RELATIONSHIP BETWEEN ORGANIZATIONS AND INFORMATION

TECHNOLOGY.

- IT and org influence each other based on Environment, Culture, Structure,

Business Processes, Politics and Management Decisions.

Organization: is a stable and formal structure that takes resources from the
environment and processes them to produce output.

Or In behavioral definition it is a collection of rights, privileges, obligations, and

responsibilities that is delicately balanced over a period of time through conflict and
conflict resolution.

5 features of organizations:

1. Use hierarchies
2. Authority in system of impartial decision making
3. Adherence to principle of efficiency
4. Routines and business processes
5. Organizational politics, culture, environments, and structures
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Routines and business processes

- Routines: precise rules and practices

- Business processes: collection of routines
- Business firms: collection of business processes

Organizational Politics

Organizational culture

Organizational environments

All organizations have unique features.

5 basic types of organizational structure.

1. Entrepreneurial structure: Small start-up business

2. Machine bureaucracy: Midsize manufacturing firm
3. Divisionalized bureaucracy: Fortune 500 firms
4. Professional bureaucracy: Law firms, school systems, hospitals
5. Adhocracy: Consulting firms

Organizing the IT functions:

IS department includes specialists such as:

1. Programmers
2. Systems analysts
3. Information systems managers
4. Chief Information Officer (CIO)
5. End Users

Disruptive technologies

- substituting existing products with new products that bring change to businesses
- First movers (inventors of disruptive technologie)
- Fast followers (firms that can capitalize on the technology)

How IS impacts org and business firms:

Economic impact
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- affects cost and quality

1. Transaction cost theory
- firms try to economize on transaction costs( the cost of participating in markets)
- IT lowers the market transaction costs.
2. Agency cost theory
- firms experience agency costs which is the cost of managing and supervising as
the firm grows.
- IT can also reduce agency costs.

Organizational and behavioral impacts

- IT flattens organizations
- Postindustrial organizations

Organizational resistance to change

- IS influences the access to information resource, therefore it causes

organizational politics
- Fit Theory:
- A fit should be obtained b/s IS And firms to achieve higher performance.
- The fit can be in Strategy, Structure Or Planning.
- Fit between IT and Tasks/people/business

The Internet and organization

- Internet helps reduce transaction costs and agency costs

The role of managers in org:

- plan + organize + coordinate + decide + control

The Impact of IT on Management decision making

- Behavioral models: observations based on what managers actually do in jobs.

- Managerial roles:
- 1. Interpersonal roles:
- 2. Informational role to receive and distribute
- 3. Decisional roles to initiate, allocate and negotiate.

Models of decision making:

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1. Rational model : choose the best rational option.

2. Organizational model: based on org structure and political
3. Bureaucratic model: based on routines and existing business process over the
years
4. Political model: based on political bargains and interest groups

BUSINESS STRATEGY DECISIONS

- set of activities and decisions firms make

It usually takes place in 3 different levels:

1. Business: single firm

2. Firm: collection of business
3. Industry: collection of firms that make up the industrial ecosystem.

Business level strategy:

● Value Chain Model: to be a low cost producer, be different from competitors and
make a market niche.
● Extending the Value Chain Model
● The value web

Synergies

Switching Cost and Lock-in effect

Stockless inventory compared to traditional and Just-in-time supply methods

1. Firm level strategy and IT

2. Industry-level strategy and IS
3. Network based strategies
4.
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Week 4 IT infrastructure & emerging

technologies.
IT infrastructure:

- Set of physical devices and software required to operate enterprise.

What is the connection between the Firm + IT infrastructure + Business Capabilities

Levels of IT infrastructure (3):

1. Public
2. Enterprise
3. Business unit

Evolution of IT infrastructure (5 eras):

A multitiered client/server network (N-tier)

Technology drivers of infrastructure evolution:

1. Moore’s law and microprocessing power (falling cost of chips)

2. Law of mass digital storage
3. Metcalfe’s law and network economics
4. Declining communication costs and the internet
5. Standards and network effects

What are the components of IT infrastructure? (7)

1. Computer hardware platforms

2. Operating system platforms
3. Enterprise software applications
4. Data management and storage (evolution)
5. Networking/telecommunications platforms
6. Internet platforms
7. Consulting system integration services
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Current trends in Hardware Platforms (6)

1. The mobile digital platform

2. BYOD (bring your own device)
3. Consumerization of IT
4. Quantum computing
5. Virtualization
6. cloud computing

SaaS: Software as a service

PaaS: Platform as a service

IaaS: Infrastructure as a service

Comparing cloud computing models: Public, Private, Hybrid

7. Green Computing (green IT)

8. High performance, power-saving processors

Current trends in software:

1. Open-source software
2. Linux
3. Software for the web: JAVA, HTML, Ruby & Python
4. Web services
5. SOA: service oriented architecture
6. Software outsourcing and cloud services

Challenges of Managing IT infrastructure:

1. Dealing with platform and infrastructure change

2. Management and governance
3. Making wise infrastructure investments
4. Competitive forces model for IT infrastructure investment.
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Week 5 Foundations of Business

Intelligence: Database and Management.
Managing data in a Traditional File Environment