Chapter 1

• Information Technology


  All the hardware and the software that a firm needs in order to achieve its business objective
• Information Systems


  More complex and can be best understood by looking at them from both a technology and business perspective
• Information System


  Set of interrelated components that collect, process, store, and distribute information to support decision making, coordination, and control
• Data


  Streams of raw facts
• Information


  Data shaped into meaningful form
• Functions of an Information System

  1. Input: Captures raw data

  2. Processing: Converts raw data into meaningful form

  3. Output: Transfers processed information

  4. Feedback: Output is returned to appropriate members to evaluate or correct input
• Management Information Systems (MIS)


  Deals with behavioural issues as well as technical issues surrounding the development, use, and impact of information systems used by managers and employees
• Dimensions of Information Systems

  • Organizations
  • Management
  • Technology
• Organizations


  • Hierarchy of authority and responsibility
  • Separation of business functions
  • Unique business processes and culture
  • Organizational politics
• Management


  • Set organizational strategy
  • Act creatively to create new products/services and re-create the organization
• Technology


  • Computer hardware and software
  • Data management technology
  • Networking and telecommunications technology
  • IT infrastructure
• Investments in information technology will result in superior returns through productivity increases, revenue increases, and superior long-term strategic positioning
• Business Information Value Chain

  Raw data acquired and transformed through stages that add value to that information
• Investing in information technology does not guarantee good returns due to variation in the returns firms receive from systems investments
• Complementary Assets


  Assets required to derive value from a primary investment, such as new business processes, management behavior, organizational culture, and training
• Outsourcing


  Obtaining certain services or products from a third party company, regardless of location
• Offshoring


  Obtaining services or products from another country, either by outsourcing or relocating certain aspects of the business