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Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
1
CHAPTER 1INTRODUCTION : BUSINESS AND
INFORMATION TECHNOLOGY
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
2
Learning Objectives Discuss business pressures and responses in today’s
Information Age Differentiate between data and information, and describe
the characteristics of high-quality data. Name and describe the components of an information
system. Describe the capabilities expected of information systems
in modern organizations. Describe opportunities for strategic use of information
systems.
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Case : Blades Board & Skate rapid growth The Business Problem
retailer of ice and inline skates and snowboards
the business needed a computer system that could instantly track sales and inventory at all of its stores
The Solution point-of-sales (POS) systems
computerized cash registers that use specialized software to record transaction data such as the stock numbers of items sold, cost , time of sale, and information on the customer, such as name
help retailers cut costs, increase profits, and serve customers better by making the most of sales information
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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The Results
Case (continued…)
Quicker, more accurate, and more detailed picture of sales and inventory
Tied into the firm’s accounting software Order products from vendors only when
needed, decreasing the amount of warehouse space
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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What have we learned from this case??
Case (continued…)
interrelating with other systems permeating every business process enabling tremendous gains in knowledge, productivity, and
profitability
A great variety of information can now be gathered at each part of each business process, and information can be distributed throughout the organization, giving knowledge and insight for competitive decision making and strategic advantage.
Information Technologies are woven into complex systems
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Business in the Information Age:Pressures
Global Competition for Market and for Labor Need for Real-time Operations Changing Work Force Customer-Oriented Operations Technological Innovation and Obsolescence Information Overload Social Responsibility of Organizations Government Regulation and Deregulation Ethical Issues Organizational Responses to Business Pressures in
the Information Age
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Business in the Information Age:Responses
Strategic Systems Customer Focus and Customer Service
mass customization Continuous Improvement Efforts
just-in-time (JIT) total quality management (TQM) Business Process Reengineering Empowering Employees and Fostering Collaborative Work Team-based Structure Business Alliances
supply chain management and enterprise resource planning (ERP) Electronic Commerce
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Business Pressures & Organizational Responses : Summary
Business PressuresGlobal Competition for Market and LaborNeed for Real-time OperationsChanging Work ForceCustomer OrientationTechnological Innovation and ObsolescenceInformation OverloadSocial ResponsibilityGovernment Regulation and DeregulationEthical Issues
Organizational ResponsesStrategic SystemsCustomer Focus and Customer ServiceContinuous Improvement Efforts (Just-in-Time, Total Quality Management)Business Process Reengineering (BPR)Team-based StructureBusiness AlliancesElectronic Commerce
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Why You Need to Learn About Information Technology
IT is Generally Interesting IT Facilitates Work in Organizations IT Offers Career Opportunities IT is Used by All Departments
Locating real estate at nations bank Using IT to strategic advantage at McDonald’s
Canada Using IT to manage human resources at the City of
Winnipeg in Manitoba, Canada
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Why You Need to Learn About Information Technology (continued…)
Web-based One-to-One Marketing at Liberty Financial Companies
one-to-one Web Marketing aims to personalize a user’s online experience by offering
services and advertisements that are likely to appeal to that person
Web-site operator can use the information it collects on individuals to provide customized content
used Web-based marketing software to build its database of customer profiles
investors able to find exactly the information they need, quickly and easily from Web sites
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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What is a Computer-Based Information System?
Hardware Software Database Network Procedures People
A computer-based information system (CBIS) is an information system that uses computer and often telecommunications technology to perform some or all of its intended tasks. An information technology is a particular component of a system, like a personal computer, a printer, or a network. But few information technologies are used alone. Rather, they are most effective combined into information systems. The basic components of information systems are the following:
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Components of Computer-based Information System
PEOPLE
HARDWARE SOFTWARE
DATABASE
NETWORK
PROCEDURES
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Provide Fast and Accurate Transaction Provide Large Capacity, Fast Access Storage Provide Fast Communications (machine to machine, human to human) Reduce Information Overload Span Boundaries Provide Support for Decision Making Provide a Competitive Weapon General Technological Trends for IT
Capabilities of Information Systems
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Strategic Questions andInformation Technology Answer
Information Technology and organizational strategy are inseparable
Porter’s strategic analysis model (5 forces models) the relative power of buyers and suppliers, threats
from substitute products and services, and the ease or difficulty with which new competitors can enter the industry
Value chain the discrete steps involved in the manufacturing
of a product or the provision of a service
Introduction to Information TechnologyTurban, Rainer and Potter
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Strategic Questions Can we use IT to gain leverage over our suppliers? To improve our bargaining
power? To reduce their bargaining power? Can we use IT to reduce purchasing costs? To reduce our order processing costs? To
reduce suppliers’ billing costs? Can we use IT to identify alternative supply sources? To locate substitute products?
To identify lower-price suppliers? Can we use IT to improve the quality of products and services we receive from
suppliers? To reduce order lead times? To monitor quality? To leverage supplier service data for better service to our customers?
Can we use IT to give us access to vital information about our suppliers that will help us reduce our costs? To select the most appropriate products? To negotiate price breaks? To monitor work progress and readjust our schedules? To assess quality control?
Can we use IT to give our suppliers information important to them that will in turn yield a cost, quality, or service reliability advantage to us? To conduct electronic exchange of data to reduce their costs? To provide master production schedule changes?
Strategic Questions (continued…)
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Strategic Questions (continued…)
Strategic Questions Can we use IT to reduce our customer’s cost of doing business with us? To reduce
paperwork for ordering or paying? To provide status information more rapidly? To reduce our costs and prices?
Can we provide some unique information to our customers that will make them buy our products/service? Can we provide better billing or account status data? Can we provide options to switch to higher-value substitutes? Can we be first with an easy-to-duplicate feature that will provide value simply by being first?
Can we use IT to increase our customers’ costs of switching to a new supplier? Can we provide proprietary hardware or software? Can we make customers dependent upon us for their data? Can we make our customer service more personalized?
Can we use external database sources to learn more about our customers and discover possible market niches? To relate buying from us to buying other products? To analyze customers interactions with us and questions to us to develop customized products/services or methods of responding to customer needs?
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Strategic Questions (continued…)
Strategic Questions Can we use IT to help our customers increase their revenues? To provide proprietary
market data to them? To support their access to their markets through our channels? Can we use IT to raise the entry barriers of new competitors into our markets? To
redefine product features around IT components? To provide customer services through IT?
Can we use IT to differentiate our products/services? To highlight existing differentiations? To create new differentiations?
Can we use IT to make a preemptive move over our competition? To offer something new because we have proprietary data?
Can we use IT to provide substitutes? To simulate other products? To enhance our existing products?
Can we use IT to match an existing competitor’s offerings? Are competitor products/services based on unique IT capabilities or technologies and capabilities generally available?
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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Information Technology Answers
Information Technology Answer (continued…)
Consolidated Stores invested $80 million in KBToys.com, a site it will jointly own with startup BrainPlay.com PetSmart plans to invest $16 million in 1999 in PetSmart.com, a site it will jointly own with startup PetJungle.com Toys “R” Us invested $80 million to relaunch Toysrus.com, which will be run as a standalone business CVS spent $30 million to buy online pharmacy Soma.com
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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The Plan of This BookPart 1 INFORMATION TECHNOLOGY IN THE BUSINESS ENVIRONMENT
1. Introduction : Business and Information Technology 2. Organizational Structure and Information Technology
Part 2 INFORMATION TECHNOLGY INFRASTRUCTURE3. Computer Hardware4. Computer Software5. Managing Organizational Data and Information6. Telecommunications and Networks7. The Internet and Intranets
Part 3 APPLYING INFORMATION TECHNOLOGY FOR COMPETITIVE ADVANTAGE8. Interorganizational and Global Information Systems9. Functional and Enterprise Systems10. Data, knowledge, and Decision Support11. Intelligent Systems in Business12. Electronic Commerce13. Strategic Information Systems and Reorganization
Part 4 DEVELOPING AND MANAGING INFORMATION SYSTEMS14. Information Systems Development15. Implementing IT:Ethics, Impacts, and Security
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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For Accounting Information systems capture, organize,
analyze, and disseminate data and information throughout modern organizations
For Finance Information systems turn financial world on
speed, volume, and accuracy of information flow
What’s in IT for Me?
Introduction to Information TechnologyTurban, Rainer and Potter
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What’s in IT for Me? (continued …)
For Marketing The Internet and the World Wide Web have
opened an entirely new channel for marketing and provided much closer contact between the consumer and the supplier
For Production/Operations Management Every process in a product or service’s value
chain can be enhanced by the proper use of computer-based information systems
Introduction to Information TechnologyTurban, Rainer and Potter
Chapter 1 Introduction : Business and Information Technology
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What’s in IT for Me? (continued …)
For Human Resource Management Employees can handle much of their personal
business themselves, and the Internet makes a tremendous amount of information available to the job seeker
For Management Information Systems (MIS) The opportunities for those planning a career in MIS
grows as fast as the adoption of information technologies into organizations everywhere