Business INFO
Why are systems for collaboration and social business so important and what technologies do they use? Explain the benefits of collaboration and social business. Describe what organizational culture is necessary for business processes and collaboration.
QUESTION : Why are systems for collaboration and social business so important and what technologies do they use? Explain the benefits of collaboration and social business. Describe what organizational culture is necessary for business processes and collaboration.
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BOOK
Management Information Systems, 16th Edition
ISBN: 9780135192047
By: Kenneth C. Laudon; Jane P. La…
Kenneth C. Laudon; Jane P. Laudon
1-1 How are information systems transforming business, and why are they so essential for running and managing a business today?
Its not business as usual in the United States or the rest of the global economy anymore. In 2017, American businesses spent nearly $1 trillion on information systems hardware, software, and telecommunications equipment. In addition, they spent another $143 billion on business and management consulting and servicesmuch of which involves redesigning firms business operations to take advantage of these new technologies. In fact, most of the business value of IT investment derives from these organizational, management, and cultural changes inside firms (Saunders and Brynjolfsson, 2016). Figure 1.1 shows that between 1999 and 2017, private business investment in information technology consisting of hardware, software, and communications equipment grew from 21 to 33 percent of all invested capital.
Figure 1.1 Information Technology Capital Investment
Information technology capital investment, defined as hardware, software, and communications equipment, grew from 21 to 33 percent of all invested capital between 1999 and 2017.
Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, Table 5.3.6. Real Private Fixed Investment by Type, Chained Dollars (2018).
Figure 1.1 Full Alternative Text
As managers, most of you will work for firms that are intensively using information systems and making large investments in information technology. You will certainly want to know how to invest this money wisely. If you make wise choices, your firm can outperform competitors. If you make poor choices, you will be wasting valuable capital. This book is dedicated to helping you make wise decisions about information technology and information systems.
How Information Systems are Transforming Business
You can see the results of this large-scale spending around you every day by observing how people conduct business. Changes in technology and new innovative business models have transformed social life and business practices. More than 269 million Americans have mobile phones (81 percent of the population), and 230 million of these people access the Internet using smartphones and tablets. Fifty-five percent of the entire population now uses tablet computers, whose sales have soared. Two hundred million Americans use online social networks; 175 million use Facebook, while 54 million use Twitter. Smartphones, social networking, texting, e-mailing, and webinars have all become essential tools of business because thats where your customers, suppliers, and colleagues can be found (eMarketer, 2018).
By June 2017, more than 140 million businesses worldwide had dot-com Internet sites registered. Today, 220 million Americans shop online, and 190 million will purchase online. In 2017, FedEx moved about 16 million packages daily in 220 countries and territories around the world, mostly overnight, and the United Parcel Service (UPS) moved more than 28 million packages daily. Businesses are using information technology to sense and respond to rapidly changing customer demand, reduce inventories to the lowest possible levels, and achieve higher levels of operational efficiency. Supply chains have become more fast-paced, with companies of all sizes depending on just-in-time inventory to reduce their overhead costs and get to market faster.
As newspaper print readership continues to decline, in 2017 more than 180 million people read a newspaper online, and millions more read other news sites. Online digital newspaper readership is growing at 10 percent annually, about twice as fast as the Internet itself. About 128 million people watch a video online every day, 85 million read a blog, and 30 million post to blogs, creating an explosion of new writers and new forms of customer feedback that did not exist five years ago (eMarketer, 2018). Social networking site Facebook attracted 214 million monthly visitors in 2018 in the United States and more than 2 billion worldwide. Businesses are using social networking tools to connect their employees, customers, and managers worldwide. Most Fortune 500 companies now have Facebook pages, Twitter accounts, and Tumblr sites.
E-commerce and Internet advertising continue to expand. Googles U.S. online ad revenues surpassed $32 billion in 2017, and Internet advertising continues to grow at more than 20 percent a year in the United States, reaching more than $107 billion in revenues in 2018 (eMarketer, 2018).
New federal security and accounting laws requiring many businesses to keep e-mail messages for five years, coupled with existing occupational and health laws requiring firms to store employee chemical exposure data for up to 60 years, are spurring the annual growth of digital information at the estimated rate of 5 exabytes annually, equivalent to 37,000 new Libraries of Congress.
Whats New in Management Information Systems?
Plenty. In fact, theres a whole new world of doing business using new technologies for managing and organizing. What makes the MIS field the most exciting area of study in schools of business is the continuous change in technology, management, and business processes. Five changes are of paramount importance.
IT Innovations
A continuing stream of information technology innovations istransforming the traditional business world. Examples include the emergenceof cloud computing, the growth of a mobile digital business platform based on smartphones and tablet computers, big data and the Internet of Things (IoT), business analytics, machine learning systems, and the use of social networks by managers to achieve business objectives. Most of these changes have occurred in the past few years. These innovations are enabling entrepreneurs and innovative traditional firms to create new products and services, develop new business models, and transform the day-to-day conduct of business. In the process, some old businesses,evenindustries, are being destroyed while new businesses are springing up.
New Business Models
For instance, the emergence of online video services for streaming or downloading, such as Netflix, Apple iTunes, and Amazon, has forever changed how premium video is distributed and even created. Netflix in 2018 attracted more than 125 million subscribers worldwide to what it calls the Internet TV revolution. Netflix has moved into premium TV show production with nearly 1,000 original shows such as American Vandal, Suburra, The Crown, Friends From College, No Country For Old Men, House of Cards, and Orange Is the New Black, challenging cable
1-2 What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations?
So far weve used information systems and technologies informally without defining the terms. Information technology (IT) consists of all the hardware and software that a firm needs to use in order to achieve its business objectives. This includes not only computer machines, storage devices, and handheld mobile devices but also software, such as the Windows or Linux operating systems, the Microsoft Office desktop productivity suite, and the many thousands of computer programs that can be found in a typical large firm. Information systems are more complex and can be best understood by looking at them from both a technology and a business perspective.
What Is an Information System?
An information system can be defined technically 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, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products.
Information systems contain information about significant people, places, and things within the organization or in the environment surrounding it. By information we mean data that have been shaped into a form that is meaningful and useful to human beings. Data, in contrast, are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use.
A brief example contrasting information and data may prove useful. Supermarket checkout counters scan millions of pieces of data from bar codes, which describe each product. Such pieces of data can be totaled and analyzed to provide meaningful information, such as the total number of bottles of dish detergent sold at a particular store, which brands of dish detergent were selling the most rapidly at that store or sales territory, or the total amount spent on that brand of dish detergent at that store or sales region (see Figure 1.3).
Figure 1.3 Data and Information
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 territory.
Figure 1.3 Full Alternative Text
Three activities in an information system produce the information that organizations need to make decisions, control operations, analyze problems, and create new products or services. These activities are input, processing, and output (see Figure 1.4). Input captures or collects raw data from within the organization or from its external environment. Processing converts this raw input into a meaningful form. Output transfers the processed information to the people who will use it or to the activities for which it will be used. Information systems also require feedback, which is output that is returned to appropriate members of the organization to help them evaluate or correct the input stage.
Figure 1.4 Functions of an Information System
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.
Figure 1.4 Full Alternative Text
In PCLs project management system, input includes the names and addresses of contractors and subcontractors, project names and identification numbers, project activities, labor costs, materials costs, and start and completion dates for project activities. Computers store these data and process them to calculate how much each project activity and the entire project will cost and estimated completion time. The system provides meaningful information such as the size, cost, and duration of all projects under PCL management, projects over and under budget, and projects and project activities that are late or on time.
Although computer-based information systems use computer technology to process raw data into meaningful information, there is a sharp distinction between a computer and a computer program on the one hand and an information system on the other. Computers and related software programs are the technical foundation, the tools and materials, of modern information systems. Computers provide the equipment for storing and processing information. Computer programs, or software, are sets of operating instructions that direct and control computer processing. Knowing how computers and computer programs work is important in designing solutions to organizational problems, but computers are only part of an information system.
A house is an appropriate analogy. Houses are built with hammers, nails, and wood, but these do not make a house. The architecture, design, setting, landscaping, and all of the decisions that lead to the creation of these features are part of the house and are crucial for solving the problem of putting a roof over ones head. Computers and programs are the hammers, nails, and lumber of computer-based information systems, but alone they cannot produce the information a particular organization needs. To understand information systems, you must understand the problems they are designed to solve, their architectural and design elements, and the organizational processes that lead to the solutions.
Dimensions of Information Systems
To fully understand information systems, you must understand the broader organization, management, and information technology dimensions of systems (see Figure 1.5) and their power to provide solutions to challenges and problems in the business environment. We refer to this broader understanding of information systems, which encompasses an understanding of the management and organizational dimensions of systems as well as the technical dimensions of systems, as information systems literacy. Computer literacy, in contrast, focuses primarily on knowledge of information technology.
Figure 1.5 Information Systems are More Than Computers
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.
The field of management information systems (MIS) tries to achieve this broader information systems literacy. MIS deals with behavioral issues as well as technical issues surrounding the development, use, and impact of information systems used by managers and employees in the firm.
Lets examine each of the dimensions of information systemsorganizations, management, and information technology.
Organizations
Information systems are an integral part of organizations. Indeed, for some companies, such as credit reporting firms, there would be no business without an information system. The key elements of an organization are its people, structure,
