Perspectives of Information System

Chapter 1 Managing the Digital Firm 1. 2 Perspectives on Information Systems What Is an Information System? Too often you hear someone say, "Oh yeah, I know how to use a computer. I can surf the Web with the best of them and I can play Solitaire for hours. I'm really good at computers. " Okay. So that person can pound a keyboard, use a mouse at lightning speed, and has a list of favorite Web sites a mile long.

But the real question is: "Is that person information literate? " Just because you can pound the keyboard doesn't necessarily mean you can leverage the technology to your advantage or to the advantage of your organization.An organization can gather and keep all the data on its customers that a hard drive can hold. You can get all the output reports that one desk can physically hold. You can have the fastest Internet connection created to date. But if the organization doesn't take advantage of customer data to create new opportunities, then all it has is useless information.

If the output report doesn't tell management that it has a serious problem on the factory floor, then all that's been accomplished is to kill a few more trees.If you don't know how to analyze the information from a Web site to take advantage of new sales leads, then what have you really done for yourself today? Most of us think only of hardware and software when we think of an information system. There is another component of the triangle that should be considered, and that's the people side or "persware". Think of it this way: [pic] In this section of the text, Laudon & Laudon discuss the components of an information system.

They talk about the input, processing, output, and feedback processes. Most important is the feedback process; unfortunately, it's the one most often overlooked.The hardware (input and output) and the software (processing) receive the most attention. With those two alone, you have computer literacy. But if you don't use the "persware" side of the triangle to complete the feedback loop, you don't accomplish much.

Add the "persware" angle with good feedback and you have the beginnings of information literacy. You also create formal systems structured to collect, store, process, disseminate, and use data in well-designed and well-built computer-based information systems (CBIS). |The Window on Technology: UPS Comptes Globally With Information Technology (see p. 7 of the textbook) describes how UPS is | |using information technology to compete in a global economy. Analyze the four components of UPS's information system: input, | |output, processing, and feedback. | It Isn't Just Technology: A Business Perspective on Information Systems Using feedback completes the information processing loop.

To be a good information systems manager, however, you must bring into that loop far more than just computer data. For instance, your information system reports that you produced 100,000 widgets last week with a "throwback" rate of 10 percent.The feedback loop tells you that the throwback rate has fallen 2 percent in the last month. Wow, you say, that's a pretty good improvement. So far, so good. But if you put that information into the broader context of the organization, you're still costing the organization a huge sum of money because each percentage point on the throwback rate averages $10,000.

And when you bring in available external environmental information, your company is 5 percent above the industry norm. Now that's information you can use — to your advantage or disadvantage!There is a distinct difference between possessing information systems literacy and simple computer literacy. If you, as a manager, can combine information from internal sources and external environments, if you can be part of the solution and not part of the problem, you can consider yourself "information literate. " Dimensions of Information Systems As Figure 1-8 shows, there are three basic dimensions of information systems. [pic] Organizations Organizations are funny things.

Each one tends to have its own individual personality and yet share many things in common with other organizations.Look at some of the organizations you may be associated with — softball team, fraternity/sorority, health club, or a child's soccer team. See, organizations exist everywhere, and each has its own structure, just as workplace organizations have structures and personalities to fit their needs, or in some cases, their old habits. A baseball team needs talented, well-trained players at different positions.

Sometimes, the success of the team depends on a good, well-informed coach or manager. So too with the workplace organization.Business organizations have their major business functions, which need many kinds of players with various talents, who are well-trained and well-informed, in order to succeed. The larger the organization, the more formal the management structure, including the need for standard operating procedures (SOPs). SOPs can help streamline standard business processes so that managers and employees can properly complete their tasks in a more efficient manner.

Many companies now integrate these business processes into their information systems to ensure uniformity, consistency, and compliance.As we'll see in upcoming chapters, many companies are even incorporating the informal work processes into their information systems in an effort to capture as much corporate knowledge as possible. Just as every baseball team needs good players at different positions, a business organization requires different employees to help it succeed. Knowledge workers help create new knowledge for the organization and data workers help process the paperwork necessary to keep an organization functioning. Without production or service workers, how would the company get its products and services to the customer?Management Every good organization needs good managers. Pretty simple, pretty reasonable.

Take professional baseball managers. They don't actually play the game, they don't hit the home run, catch the fly ball for the last out, or hang every decoration for the celebration party. They stay on the sidelines during the game. Their real role is to develop the game plan by analyzing their team's strengths and weaknesses. But that's not all; they also determine the competition's strengths and weaknesses. Every good manager has a game plan before the team even comes out of the locker room.

That plan may change as the game progresses, but managers pretty much know what they're going to do if they are losing or if they are winning. The same is true in workplace organizations. In every organization you'll find senior managers making long-range decisions, middle managers carrying out the plans and goals set by senior managers, and operational managers handling the day-to-day operations of the company. As we'll see, information systems output must be geared to each of these levels of management. Technology Do you own a high-definition television?Probably not, since it's only been on the market for a short time. How old is your car or truck? Manufacturers are constantly offering us new vehicles, yet we tend to upgrade only every few years.

Your personal computer may be a year old or three years old. Do you have the latest gadgets? Chances are you don't. Face it, you just can't keep up with all the new hardware. No one can. Think about how hard, not to mention expensive, it is for an individual to acquire each new software program introduced to the marketplace.

Think how difficult it is sometimes to learn how to use every feature of all those new products. No matter how big your storage technology device seems to be, you're constantly running out of room to store all the new software programs and all the data you create. As the products and services on the Internet expand everyday, your need for new communications technology and better network links just seems to grow and grow. Now put those thoughts into a much larger context of an organization's information technology (IT) infrastructure.

Yes, it would be nice if your company could purchase new computers every three months so you could have the fastest, best technology on the market. But it can't. Not only is it expensive to buy the hardware and the software, but the costs of installing, maintaining, updating, integrating, and training must all be taken into account. We'll look at the hardware and software sides of the information systems triangle in upcoming chapters, but it's important that you understand now how difficult it is for an organization, large or small, to take advantage of all the newest technology.The fastest and biggest change in modern computing is the Internet. To say that the Internet is transforming the way we live, work, and play is probably the greatest understatement in years.

Businesses can create new opportunities, but they can also lose opportunities just as quickly. Now an organization has to design new systems, or transform old ones, with not just the company in mind, but 100 million other users of the Internet, extranets, and intranets. They have to decide how much or how little information to provide, in what way, with what level of access, and how best to present it.It's a huge job! The World Wide Web allows big companies to act "small," and small companies to act "big.

" It has leveled the playing field so entrepreneurs can break into new markets previously closed to them. A Web site, consisting of a few pages or hundreds of pages, enables businesses to get close and stay close to their customers in new ways. It is truly a revolution in our global economy. Complementary Assets and Organizational Capital At the end of the twentieth century there was widespread fear of the havoc the Y2K bug would wreak on computer systems throughout the world.

Billions of dollars and millions of hours were spent fixing the problem. As a result of the preparation, very few problems arose. One of the biggest benefits was serving as a "wake-up" call to senior managers throughout corporate America about the increasing role information systems play in the success of their organizations. They discovered that managers can't ignore technology any more and pass it off to secretaries or clerical workers or the information technology department. Information systems are critical to the success of an organization at all levels.

Once technology was considered "too technical" for the rest of us to understand. Computers were relegated to the back room with a few technicians running around in white coats. No one else understood what these people did or how they did it. It was a whole different world and actually seemed disconnected from the mainstream operations of the company.

Technology and its associated information systems are now integrated throughout the organization. Everyone is concerned about its role and impact on their work activities.End users take on greater responsibility for the success of the information systems and are actually doing a lot of the work that belonged to the techies. Even the executive levels of an organization can no longer ignore the technology as they realize the importance of managing their organizational and management capital. As a firm becomes more digital, its information system continues to extend beyond the traditional role of serving the employees. Developing the complementary assets associated with the information systems such as developing new business processes, emphasizing employee training in echnology, and creating new partnerships with suppliers, customers, and even competitors, is proving to be a daunting task.

But the plain fact is that organizations, especially larger ones, just can't change as fast as the technology. Companies make huge investments not just in hardware, but in software and persware. Training people, building new operating procedures around technology, and changing work processes take far longer than the technological pace will allow. The introduction of new technology can severely disrupt organizations.Productivity naturally slips, at least in the beginning. Learning curves cost time and money.

Most system installations or changes used to mainly affect data workers or production workers. Now they affect every level of the organization, even the management and strategic levels. Every part of the organization is involved in the introduction or change of technology, and everyone plays a part in its success. |Bottom Line: Information literacy is more than just clicking a mouse, pounding the computer keyboard, or surfing the Web.

It's | |about integrating the various elements of an organization, technical and non-technical, into a successful enterprise. As a | |successful manager you must concentrate on all three parts of the information systems triangle (hardware, software, and | |persware) and integrate them into a single, cohesive system that serves the needs of the organization, the wants of the | |customer, and the desires of the employees. The more complex the system, the harder to manage, but the greater the payoff. | Lecture Notes continue...