Information Systems and Networks by Samuel Rota Bulò Department of Management Università Ca' Foscari Venezia
Objectives Introduction to computer networks and information systems for companies with emphasis to architecture, internet protocols and services Description of technologies used for planning, management and monitoring of typical activities of a company Get in touch with case studies
Schedule from 27th March to 3rd May, 2013. Day Time Place Room Wednesday 10:30 12:00 San Giobbe 3B Thursday 10:30 12:00 San Giobbe 3B Friday 10:30 12:00 San Giobbe 3B
References Slides of the lessons published on the web site of the course (see later) Book: Management Information Systems - Managing the digital firm by Laudon K.C. and Laudon J.P.. Pearson.
Contacts prof. Samuel Rota Bulò srotabul@dais.unive.it http://www.dais.unive.it/~srotabul/infsys2012.html Office hours: immediately after lectures by appointment DAIS, via Torino 155, Mestre
Exam Written exam theoretical questions on the topics addressed during the course exercises Teamwork no more than 3 persons in-depth analysis of a case study or deepening of topics related to the course presentation during the last lesson hours
Lesson 1 Information Systems in Global Business Today
Case study: wood harvesting Finland is leader in the timber machine industry Possne industry is one of the largest manufacturers of rubber-wheel cut-to-length forest machines Products: harvesters cutting heads forwarders cranes
Case study: wood harvesting
Case study: wood harvesting A harvester is a tractor-like machine used for cutting logs it has a crane with a cutting head the cutting head grasps the tree at the stem and uses its saw to make the first cut the head moves the cut tree trunk and finds the next cutting point during the movement the cutting head removes the branches of the tree A forwarder is a special forest tractor with a crane that is designed for efficient trunk collection and transportation
Case study: wood harvesting Possne offers also an integrated set of information systems to all partners in the logistic chain.
Case study: wood harvesting Role of the information system: estimate the demand for different types and sizes of timber from the field office of a wood purchasing organization a cutting plan is created to optimize the cutting yield for a particular logging area a map of the area and work instructions for the harvester driver are generated the harvester driver obtains the instructions via a dedicated e-mail system which are displayed in the harvester cabin the cutting of a log into pieces is optimized by the information system after the trees have been cut the driver sends the information to the field office forwarders use a map and GPS to locate the cut logs and transport them to the roadside piles of cut logs are then transported by trucks to factories using optimal routes
The knowledge society Information is important as the other economical resources: land, labour and capital.
Business and Information Systems (IS) Firms are intensively using IS and making large investments in information technology
Business and IS IS are transforming business cell phones, backberrys, iphones, email, online conferences are becoming essential tools by properly exploiting and investing in IT a company can outperform competitors poor choices of IT technologies might drive a company to a lost of competitiveness business should follow the new social dynamics induced by IT and evolve accordingly
Some facts 89 millions people access internet using mobile devices 99 million businesses have a.com internet site registered 162 million Americans shop online 41 million Americans research products or services online FedEx moved 3.4 million packages daily UPS moved 15 million packages daily 78 million people read news online 39 million people watch a video online everyday 66 million read a blog and 16 million post to blogs Facebook attracts monthly 500 million visitors many Fortune 500 companies have a Facebook page e-commerce and internet advertising continue to expand: Google's revenue > $25 billion in 2009 internet advertising is growing 10% per year
What's new in IS Lots! new businesses and industries appear e.g., Facebook old ones decline e.g., Kodak successful firms are those who learn how to use the new technologies
What's new in IS Technology: cloud computing software as a service mobile digital platform Management: online coordination, collaboration and knowledge faster business intelligence applications virtual meetings Organizations: web 2.0 applications telework co-creation of business values
Globalization challenges in 1492, Columbus reaffirmed that the world was round it was populated by people and languages leaving in isolation from one another with disparities in economic and scientific developments the industrial revolution was a world-wide phenomenon energized by expansion of trade among nations today, the world is again flat as internet and global communications have greatly reduced the economic and cultural advantages of developed countries a growing percentage of the economy depends on imports and exports jobs move across borders
Globalization challenges internet has reduced the costs of operating and transacting on a global scale customers can shop worldwide firms can find low-cost suppliers and manage production facilities in other countries internet service firms can replicate their business model and services easily in multiple countries information systems enable globalization
Features of the digital world Globalization: integration of economies all over the world is possible thanks to the technological progress.
Economical changes Increased international trade of goods and services
Cultural changes Other cultures are easily accessible (through TV, internet, etc.) New scenarios of colonization
Technological changes Availability of low-cost communication and computation platforms
Digital Firm A firm where all significant relationships with customers, suppliers and employees are digitally enabled and mediated. core business processes are accomplished through digital networks linking the whole firm with multiple organizations business processes refer to the set of logically related tasks and behaviours that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated
Digital Firm any piece of information required to support the key business (key corporate assets) decisions are available at any time and anywhere in the firm through digital means digital firms sense and respond to changes far more rapidly than traditional firms, giving them more flexibility to survive in turbulent times time and space shifting are the norm businesses are conducted continuously 24/7 work takes place in a global workshop
Strategic business objectives of IS Entire sectors of the economy are nearly inconceivable without substantial investments in IS E-commerce firms such as Amazon, ebay, Google, and E*Trade simply would not exist Today s service industries (finance,insurance, and real estate), as well as personal services such as travel, medicine, and education could not operate without IS retail firms such as Walmart and Sears and manufacturing firms such as General Motors and General Electric require IS to survive and prosper
Interdependence between organizations and IS There is a growing interdependence between a firm s ability to use information technology and its ability to implement corporate strategies and achieve corporate goals
Strategic business objectives of IS Business firms invest heavily in IS to achieve six strategic business objectives: 1. operational excellence 2. new products, services and business models 3. customer and supplier intimacy 4. improved decision making 5. competitive advantage 6. survival
Strategic business objectives of IS: operational excellence IS for improving efficiency and achieve higher profitability e.g., Walmart, largest retailer on earth $408 billion in sales in 2010 their Retail Link system digitally links its suppliers to every one of Walmart's stores as soon as a customer purchases an item, the corresponding supplier is notified so that a replacement to the shelf can be shipped most efficient retail $28 per square foot closest competitors $23 per square foot
Strategic business objectives of IS: new products, services and business models IS and technologies are a major enabling tool for firms to create new products, services and entirely new business models a business model describes how company produces, delivers, and sells a product or service to create wealth e.g., Apple transformed the old business model of music distribution legal distribution based on its own ipod technology platform prospered from a continuing stream of innovations, including ipod, itunes music service, ipad, iphone.
Strategic business objectives of IS: customer intimacy by knowing the customers, a firm can serve them well and customers respond by returning and purchasing more e.g., the Mandarin Oriental, high-end hotels computers keep track of guests' preferences (room temperature, check-in time, TV programs, etc.) and store the data in large data repositories rooms are remotely controlled and monitored (automatic change of room conditions) analysis of best customers to develop individualized marketing campaigns
Strategic business objectives of IS: supplier intimacy the more a business engages its suppliers, the better the suppliers can provide vital inputs and lower costs e.g., JCPenney, clothing chain every time a dress shirt is bought the record of the sale appears at the TAL Apparel Ltd. supplier the supplier by means of a computer model determines the quantity, styles, colors and sizes of replacement shirts to be shipped to each JCPenney store JCPenney shirt inventory is near zero and so its costs
Strategic business objectives of IS: improved decision making lack of up-to-date information prevents managers to take informed decisions this results in over- or underproduction of goods or services, misallocation of resources, poor response time higher costs IS allows to deliver real-time data to managers from the marketplace when making decisions e.g., Verizon Corporation, largest telecommunication company in USA web-based digital dashboard to provide managers with precise real-time information on customer complaints, network performance, line outages or storm-damaged lines
Strategic business objectives of IS: competitive advantage by achieving one or more of the business objectives a firm has already achieved a competitive advantage companies like Walmart, Apple, UPS, are industry leaders because they know how to use information systems for this purpose
Strategic business objectives of IS: survival business firms invest in IS and technologies because they forced to by industry-level changes e.g., after Citibank introduced the first ATM in NY in 1977, the competitors rushed to provide the same technology to their customers nowadays, regulations create the legal duty for companies and employees to retain records of information IS and technologies provide the capability to respond to these challenges
What is an Information System? an Information System (IS) is a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization IS helps managers and workers to analyse problems, visualize complex subjects and create new products IS contains information about people, places and things within the organization or the environment surrounding it
Information systems vs Information technology Information technology (IT) consists of hardware: computer machines, storage devices, mobile devices software: operating systems (e.g., Windows, Linux, OSX), productivity suites (e.g., Libreoffice, MsOffice), any computer program used by the firm Information systems make use of information technology
Data vs Information Information is data that has been shaped into a form that is meaningful and useful for human being data is a stream of raw facts representing events occurring in organizations For example: data: 390412345678 information: +39 041 2345678
Functions of an information system Three activities in an IS produce the information that organizations need to make decisions, control operations, analyze problems, and create new products or services Input: captures or collects raw data from within the organization or from its external environment Processing: converts the 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 IS also require feedback, which is output that is returned to appropriate members of the organization to help them evaluate or correct the input stage
Functions of an information system
Example: online ticket selling input order data for tickets, e.g., purchaser's name, address, credit card number, number of tickets ordered, and the date of the game process computers store the data and process them to calculate order totals, track ticket purchases, send request for payment to credit card companies output tickets to print out, receipts for orders and reports on online ticket orders information for decision makers, e.g., number of tickets sold for a particular game, total number of tickets sold each year, frequent customers
Dimensions of an IS
Dimensions of an IS: organizations IS are integral parts of organizations and for some companies they are fundamental organizations have a hierarchical structure with a clear-cut division of labour. Senior management makes long-range strategic decisions Middle management carries out programs and plans of senior management Operational management is responsible for monitoring daily activities Work is coordinated through business processes Business processes are mostly automated by IS
Dimensions of an IS: management management deals with the many situations faced by organizations, make decisions, formulate action plans to solve organization problems manager should also create new products and services and re-create the organization from time-to-time a substantial part of management responsibility is creative work driven by new knowledge and information IS plays a fundamental role in helping managers in their activities
Dimensions of an IS: Information technology Computer hardware: physical equipment used for input, processing and output activities in an IS computers, mobile devices, input/output devices, storage devices, telecommunication devices Computer software: detailed and preprogrammed instructions that control and coordinate the computer hardware components in an IS Data management technology: software governing the organization of data on physical storage media Networking and telecommunication technology: physical devices an software linking pieces of hardware and transferring data among them IT infrastructure: all these technologies and people required to run and manage them. The foundation on which an IS is built.
A business perspective to IS Decisions to build or maintain an IS assume that the return will be superior to other investments increase in productivity, increase in revenues or decrease of costs, superior long-term strategic positioning of the firm in certain markets an IS is an important instrument to create value for the firm IS are part of a series of value-adding activities for acquiring, transforming and distributing information that managers can use to improve decision-making, enhance organizational performance, and increase firm profitability from the business perspective, an IS represents an organizational and management solution, based on information technology, to a challenge or problem posed by the environment
Case study: wood harvesting
A business perspective to IS Business firms need to change their way of doing business before taking advantage of new IT IT investments alone cannot make organizations and managers more effective unless they are accompanied by supportive values, structures and behaviour patterns in the organization and other complementary assets complementary assets are those assets required to derive value from a primary investment new business models, new business processes, management behaviour, organizational culture, or training Firms failing to make these complementary investments receive less or no return on their IT investments e.g., recording label companies refused to change their old business model based on physical music stores rather than adopt new online distribution model. Now online legal music dominates the marketplace
Returns on IT investments