2- Management

• Management’s job is to make sense out of the many situations faced by

organizations, make decisions, and formulate action plans to solve
organizational problems.
• Managers perceive business challenges in the environment, they set the
organizational strategy for responding to those challenges, and they
allocate the human and financial resources to coordinate the work and
achieve success.
• They must exercise responsible leadership.
• They must also create new products and services and even re-create
the organization from time to time. A substantial part of management
responsibility is creative work driven by new knowledge and
information.
• The business information systems reflects the hopes, dreams, and
realities of real-world managers.
• Information technology can play a powerful role in helping managers
design and deliver new products and services and redirecting and
redesigning their organizations.
 3- Information Technology
• Information technology is one of many tools managers use to cope with change.
• Computer hardware is the physical equipment used for input, processing, and output
activities in an information system. It consists of the following: computers of various
sizes and shapes (including mobile handheld devices); various input, output, and
storage devices; and telecommunications devices that link computers together.
• Computer software consists of the detailed, preprogrammed instructions that control
and coordinate the computer hardware components in an information system.
• Data management technology consists of the software governing the organization of
data on physical storage media.
• Networking and telecommunications technology , consisting of both physical devices
and software, links the various pieces of hardware and transfers data from one
physical location to another. Computers and communications equipment can be
connected in networks for sharing voice, data, images, sound, and video.
• A network links two or more computers to share data or resources, such as a printer.
• The world’s largest and most widely used network is the Internet .
• The Internet is a global “network of networks” that uses universal standards to
connect millions of networks in more than 230 countries around the world.
• The Internet has created a new “universal” technology platform on which to build new
products, services, strategies, and business models.
• Internal corporate networks based on Internet technology are called intranets
• Private intranets extended to authorized users outside the organization are
called extranets
• Firms use such networks to coordinate their activities with other firms for
making purchases, collaborating on design, and other interorganizational work.
• The World Wide Web is a service provided by the Internet that uses universally
accepted standards for storing, retrieving, formatting, and displaying
information in a page format on the Internet.
• Web pages contain text, graphics, animations, sound, and video and are linked
to other web pages. By clicking on highlighted words or buttons on a web
page, you can link to related pages to find additional information and links to
other locations on the web. The web can serve as the foundation for new kinds
of information systems.
• All of these technologies, along with the people required to run and manage
them, represent resources that can be shared throughout the organization and
constitute the firm’s information technology (IT) infrastructure .
• The IT infrastructure provides the foundation, or platform , on which the firm
can build its specific information systems.
• Each organization must carefully design and manage its IT infrastructure so
that it has the set of technology services it needs for the work it wants to
accomplish with information systems.
 A Business Perspective on
Information Systems
• We can see that from a business perspective, an
information system is an important instrument for creating
value for the firm.
• Information systems enable the firm to increase its revenue
or decrease its costs by providing information that helps
managers make better decisions or that improves the
execution of business processes.
• For example, the information system for analyzing
supermarket checkout data can increase firm profitability by
helping managers make better decisions as to which
products to stock and promote in retail supermarkets
• The business perspective calls attention to the
organizational and managerial nature of
information systems. An information system
represents an organizational and management
solution, based on information technology, to
a challenge or problem posed by the
environment.
Complementary Assets: Organizational
Capital and the Right Business Model
 Complementary Assets: Organizational
Capital and the Right Business Model
• Complementary assets are those assets required to derive value
from a primary investment. For instance, to realize value from
automobiles requires substantial complementary investments in
highways, roads, gasoline stations, repair facilities, and a legal
regulatory structure to set standards and control drivers.
• firms that support their technology investments with investments
in complementary assets, such as new business models, new
business processes, management behavior, organizational
culture, or training, receive superior returns, whereas those firms
failing to make these complementary investments receive less or
no returns on their information technology investments.
• These investments in organization and management are also
known as organizational and management capital .
Chapter 2 : Global E-business and
Collaboration
 2- 1 What are business processes?
How are they related to information
systems?
• In order to operate, businesses must deal with many
different pieces of information about suppliers,
customers, employees, invoices, and payments, and
of course their products and services.
• They must organize work activities that use this
information to operate efficiently and enhance the
overall performance of the firm.
• Information systems make it possible for firms to
manage all their information, make better decisions,
and improve the execution of their business
processes.
 Business processes
• The manner in which work is organized, coordinated,
and focused to produce a valuable product or service.
• Business processes are the collection of activities
required to produce a product or service. These
activities are supported by flows of material,
information, and knowledge among the participants in
business processes.
• Business processes also refer to the unique ways in
which organizations coordinate work, information, and
knowledge and the ways in which management
chooses to coordinate work.
Example of business processes
How Information Technology Improves
Business Processes?
• Information systems automate many steps in business processes
that were formerly performed manually, such as checking a
client’s credit or generating an invoice and shipping order.
• Today, information technology can do much more. New
technology can actually change the flow of information, making
it possible for many more people to access and share
information, replacing sequential steps with tasks that can be
performed simultaneously, and eliminating delays in decision
making.
• new business processes based on new business models would
be inconceivable without today’s information technology.
• by conducting a business process analysis, you will also begin to
understand how to change the business by improving its
processes to make it more efficient or effective
 2- 2 How do systems serve the different
management groups in a business, and how do systems that
link the enterprise improve organizational performance?

• Because there are different interests, specialties,

and levels in an organization, there are different
kinds of systems. No single system can provide
all the information an organization needs.
 Systems for Different Management
Groups
• A business firm has systems to support different groups or levels of
management.
• These systems include transaction processing systems (TPS) and systems
for business intelligence.
• Operational managers need systems that keep track of the elementary
activities and transactions of the organization, such as sales, receipts, cash
deposits, payroll, credit decisions, and the flow of materials in a factory.
• Transaction processing systems (TPS) provide this kind of information.
• TPS is a computerized system that performs and records the daily routine
transactions necessary to conduct business, such as sales order entry,
hotel reservations, payroll, employee record keeping, and shipping.
• At the operational level, tasks, resources, and goals are predefined and
highly structured.
• Transaction processing systems are often so central to a business that TPS
failure for a few hours can lead to a firm’s demise and perhaps that of
other firms linked to it.