What is a System
A system can be broadly defined as an integrated set of elements that accomplish a defined objective. People from different engineering disciplines have different perspectives of what a "system" is. For example, software engineers often refer to an integrated set of computer programs as a "system." Electrical engineers might refer to complex integrated circuits or an integrated set of electrical units as a "system." As can be seen, "system" depends on one‘s perspective, and the .integrated set of elements that accomplish a defined objective is an appropriate definition.
An information system can be defined as a set of interrelated components that collect (or retrieve), process, store and distribute information to support decision making and control in an organization. In addition to supporting decision making, coordination and control, an information system also help managers and workers analyze problems and visualization in an organization.
Information systems contain information about significant people, places and things within the organization or in the environment surrounding it.
Types of information systems
Dimensions of information systems
Information systems are more than computers. Using information systems effectively requires an understanding of the organization, management and information technology shaping the systems. Thus an information systems can be described as organizational and management solutions to challenges posed by the environment.
Purpose of information systems
We are in the midst of a swiftly moving river of technology and business innovations that is transforming the global business landscape. An entirely new Internet business culture is emerging with profound implications for the conduct of business. You can see this every day by observing how businesspeople work using high-speed Internet connections for e-mail and information gathering, portable computers connected to wireless networks, cellular telephones connected to the Internet, and hybrid handheld devices delivering phone, Internet, and computing power to an increasingly mobile and global workforce.
The emerging Internet business culture is a set of expectations that we all share. We have all come to expect online services for purchasing goods and services, we expect our business colleagues to be available by e-mail and cell phone, and we expect to be able to communicate with our vendors, customers, and employees any time of day or night over the Internet. We even expect our business partners around the world to be fully connected. Internet culture is global.
Information systems are the foundation for conducting business today. In many industries, survival and the ability to achieve strategic business goals are difficulty without extensive use of information technology. Business today use information systems to achieve six major objectives:
A business perspective on information system
Managers and business firms invest in information technology and information systems because they provide real economic value to the business. In a business perspective an information system creates value to the firm through increasing revenue by providing information that help managers make better decisions or improving the execution of business processes.. Every business has an information value chain in which raw information is systematically acquired and then transformed through various stages that add value to that information. The value of an information system to a business, as well as the decision to invest in any new information systems is in part determined by the extent to which the system will lead to better management decisions, more efficient business processes and higher firm profitability.
Value Chain: primary and supporting activities that add value to an organization’s products and services to achieve competitive advantage
Why information systems matter
While many managers are familiar with the reasons why managing their typical resources such as equipment and people are important, it is worthwhile to take a moment to examine four reasons why managing information systems and technology are just as important.
As the text states, "Investment in information technology has doubled as a percentage of total business investment since 1980, and now accounts for more than one-third of all capital invested in the United States… " That's a lot of money that businesses are spending on a relatively new component of many organizations. The business world has come a long way very rapidly in the last twenty years in terms of the amount of dollars spent on technology. Unfortunately, many companies haven't made the same advances in learning how to properly manage all these new corporate assets.
Foundation of Doing Business
Take a look around you and see if you can find a business that does not depend on information technology in one form or another. The local restaurant probably manages their lunch-time crowds using hand-held devices that allow the waiter or waitress to communicate menu orders directly to the kitchen. The rental car company uses information technology to track not only customer orders but may also use global positioning systems that relay the exact position of every car wherever it is. Your local drycleaners may also use information technology to keep track of all
their chemical processes to ensure regulatory compliance. In short, there are very few businesses and organizations that do not currently use some form of information technology.
Simply put, effectively managing your organization's information technology and resources will increase the productivity and effectiveness of your company. With the right technology workers can increase the amount of work they are able to accomplish in less time than ever before.
Strategic Opportunity and Advantage
Businesses and organizations simply can't stick their heads in the sand and ignore all of the improvements and inventions that are available nowadays. If they choose to do so, chances are their competition won't. It's not just the improvements in current processes that are available but the opportunities for new products or services that businesses can take advantage of with information technology.
How Much Does IT Matter?
For many years computer technology was relegated to the back rooms or basements of a corporation. Only the "techies" worried about it, and they were often the only ones who really knew how it all worked. Now computers are all over the organization — there's one on every desk and, more times than not, in every pocket or purse. It's not enough for you to know how to pound a keyboard or click a mouse. It's not even enough for you to know how to surf the Web or send e-mail. Every employee, including you, must know how to take advantage of information systems to improve your organization and to leverage the available information into a competitive advantage for your company.
Why IT Now? Digital Convergence and the Changing Business Environment
The Internet and Technology Convergence
Even though the Internet as a whole has existed since 1969, the World Wide Web didn't exist until around 1993-1994. That's fewer than 10 years ago. Now you can't pick up a magazine or a newspaper, turn on the television or radio, even drive by a billboard, without some kind of reference to "dot-com." Businesses are rushing to the Internet in an effort to keep up with the competition or to create whole new businesses. Now organizations struggle with such issues as how to design and develop a Web site or how to determine a fair e-mail policy for employees.
Electronic market systems are allowing businesses to take advantage of technology to create new methods of buying and selling. For a while it seemed as though the middleman was going out of business because of the new direct connections between customers and merchants. While this is true in some industries, new opportunities are springing up for the middleman in other areas. We'll look at this issue in more detail later.
Transformation of the Business Enterprise
You can't help but know about all the job cuts occurring in our country. It seems like every week we hear about thousands and thousands of people losing their jobs. Back in the 1980s most of the job losses were in the blue-collar sector. In the 1990s it seems many of the cuts were made in the white-collar, management jobs. Why? Think about it. Technology, to a large extent, has driven organizations to change the way they operate and that includes the way they manage. We're going to take an in-depth look at how organizations work and how they've been transformed by technology.
Next time you purchase a product, any product, look at the fine print and see where it's made. It could be China, or the Philippines, or a South American company, or even in the United States. You can disagree with the fact that many manufacturing jobs are being moved from the U.S. to foreign countries. But look at the vast number of jobs that are being created in this country. Maybe they aren't the traditional factory jobs we're used to. In fact, many of our new jobs are in the information industry. Many of them service whole new markets that didn't exist just a few years ago. There was no position called "Webmaster" in 1991. That's because the Web didn't exist. But now, that particular job category is one of the fastest growing in the U.S. and overseas.
The global economy Laudon & Laudon talk about is being made possible by technology, and that's why it's so important that you understand how to use information systems technology instead of just computer technology.
Rise of the Information Economy
In a knowledge- and information-based economy, knowledge and information are key ingredients in creating wealth. Think back to the early 1900s when the horse and buggy were the main form of transportation. Along came a guy named Ford who built a whole new industry around the automobile. Many jobs, such as horse groomers, horse shoers, and buggy manufacturers, were lost forever. Now think about all the new jobs that were created — not just in the factories, but all the other businesses associated with the car. The people in the horse and buggy industry adapted, retrained for the new jobs, and the whole country changed. The same thing is happening now with the information industry. Many of the new jobs that are being created have better working conditions, better pay, and more advantages than the old jobs had. You just have to be equipped to take advantage of the situation. You have to take advantage of retraining opportunities. You have to gain the skills necessary for the transformation of the industries that have been a mainstay of this country. It's not that hard — it just takes a lot of hard work.
Chapter Review Questions?
Laudon K, Laudon J, Management Information Systems, Managing the digital firm