MANAGEMENT MANAGING THE DIGITAL FIRM SIXTEENTH EDITION Kenneth C. Laudon New York University Jane P. Laudon Azimuth Information Systems Vice President of Courseware Portfolio Management: Senior Art Director: Mary Seiner Microsoft
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may appear in this work are the property of their respective Library of Congress Cataloging-in-Publication Data Names: Laudon, Kenneth C., author. | Laudon, Jane P. (Jane Price), ISBN 10: 0-13-519179-3 ABOUT THE AUTHORS Kenneth C. Laudon is a Professor of Information Systems at New York University’s Stern School of Business. He holds a B.A. in Economics from Stanford and a Ph.D. from Columbia Professor Laudon’s current research is on the planning and management of large-scale in- Ken Laudon has testified as an expert before the United States Congress. He has been a At NYU’s Stern School of Business, Ken Jane Price Laudon is a management con- sultant in the information systems area and
Jane received her Ph.D. from Columbia University, her M.A. from Harvard University, The Laudons have two daughters, Erica and Elisabeth, to whom this book is dedicated. iii BRIEF CONTENTS PART ONE Organizations, Management, and the Networked PART TWO Information Technology Infrastructure 161 Chapter 5 IT Infrastructure and Emerging Technologies 162 PART THREE Key System Applications for the Digital Age 337 Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise PART FOUR Building and Managing Systems 491 Chapter 13 Building Information Systems 492 Glossary G-1 Indexes I-1 iv COMPLETE CONTENTS PART ONE Organizations, Management, and the Networked Opening Case: PCL Construction: The New Digital Firm 3 so essential for running and managing a business today? 5 How Information Systems Are Transforming Business 6 • What’s New in Globalization Challenges and Opportunities: A Flattened World 11 • The What Is an Information System? 16 • Dimensions of Information It Isn’t Just Technology: A Business Perspective on Information Technical Approach 28 • Behavioral Approach 29 • Approach of This The Company 30 • Position Description 31 • Job Requirements 31 • v vi Contents Global E-business and Collaboration 40 Chapter 2 Opening Case: Enterprise Social Networking Helps Sanofi Pasteur Business Processes 43 • How Information Technology Improves Business Systems for Different Management Groups 46 • Systems for Linking the • E-business,
E-commerce, and E-government 55 and what technologies do they use? 56 What Is Collaboration? 56 • What Is Social Business? 57 • Business The Information Systems Department 66 • Organizing the Information The Company 68 • Position Description 68 • Job Requirements 69 • Information Systems, Organizations, and Strategy 78 Opening Case: Technology Helps Starbucks Find Better Ways to Compete 79 build and use information systems successfully? 81 What Is an Organization? 81 • Features of Organizations 84 Economic Impacts 89 • Organizational and Behavioral Impacts 90 • Contents vii 3-3 How do Porter’s competitive forces model, the value chain model, Porter’s Competitive Forces Model 94 • Information System Strategies
for The Internet’s Impact on Competitive Advantage 100 • The Business Value Synergies, Core Competencies, and Network-Based Strategies 105 how should they be addressed? 109 Sustaining Competitive Advantage 109 • Aligning IT with Business The Company 111 • Position Description 111 • Job Requirements 111 • Chapter 4 Ethical and Social Issues in Information Systems 120 Opening Case: Are Cars Becoming Big Brother on Wheels? 121 systems? 123 A Model for Thinking about Ethical, Social, and Political Issues 124 • Five Basic Concepts: Responsibility, Accountability, and Liability 129 • Ethical Information Rights: Privacy and Freedom in the Internet Age 132 •
Property Computer-Related Liability Problems 142 • System Quality: Data Quality and viii Contents Interactive Session | Organizations Will Automation Kill Jobs? 148 Health Risks: RSI, CVS, and Cognitive Decline 149 The Company 152 • Position Description 152 • Job Requirements 152 • PART TWO Information Technology Infrastructure 161 Chapter 5 IT Infrastructure and Emerging Technologies 162 Opening Case: PeroxyChem’s Cloud Computing Formula for 5-1 What is IT infrastructure, and what are the stages and drivers of Defining IT Infrastructure 165 • Evolution of IT Infrastructure 167 •
Computer Hardware Platforms 176 • Operating System Platforms 178 • The Mobile Digital Platform 180 • Consumerization of IT and BYOD 180 Computers? 181 Quantum Computing 183 • Virtualization 183 • Cloud Computing 183 Edge Computing 188 • Green Computing 189 • High-Performance and Linux and Open Source Software 190 • Software for the Web: Java, HTML, Dealing with Platform and Infrastructure Change 196 • Management and Contents ix 5-6 How will MIS help my career? 200 The Company 200 • Position Description 200 • Job Requirements 200 • Chapter 6 Foundations of Business Intelligence: Databases and Opening Case: Data Management Helps the Charlotte Hornets Learn More 6-1 What are the problems of managing data resources in a traditional file File Organization Terms and Concepts 213 • Problems with the Traditional Database Management Systems 217 • Capabilities of Database Management The Challenge of Big Data 227 • Business Intelligence Infrastructure 228 Analyzing Its Data 230 Analytical Tools: Relationships, Patterns, Trends 231 • Databases and Establishing an Information Policy 236 • Ensuring Data Quality 237 There 239 The Company 240 • Position Description 240 • Job Requirements 241 • References: 248 x Contents Telecommunications, the Internet, and Wireless and key networking technologies? 253 Networking and Communication Trends 253 • What Is a Computer Signals: Digital Versus Analog 259 • Types of Networks 259 • Transmission What Is the Internet? 261 • Internet Addressing and Architecture 262 Internet Services and Communication Tools
267 U nethical or Good Business? 270 The Web 271 n etworking, communication, and Internet access? 279 Cellular Systems 279 • Wireless Computer Networks and Internet Access 280 • The Company 285 • Position Description 285 • Job
Requirements 285 • Securing Information Systems 294 Opening Case: Hackers Target the U.S. Presidential Election: What 8-1 Why are
information systems vulnerable to destruction, error, and Why Systems are Vulnerable 298 • Malicious Software: Viruses, Worms, Trojan Legal and Regulatory Requirements for Electronic Records Management 308 Computers 309 Electronic Evidence and Computer Forensics 311 Contents xi 8-3 What are the components of an organizational framework for security Information Systems Controls 312 • Risk Assessment 313 • Security
Identity Management and Authentication 316 • Firewalls, Intrusion Detection The Company 327 • Position Description 327 • Job Requirements 327 • PART THREE Key System Applications for the Digital Age 337 Chapter 9 Achieving Operational Excellence
and Customer Intimacy: Opening Case: Avon Beautifies Its Supply Chain 339 excellence? 341 What are Enterprise Systems? 341 • Enterprise Software 342 • Business 9-2 How do supply chain management systems coordinate planning, Interactive Session | Management Soma Bay Prospers
with ERP in the The Supply Chain 346 • Information Systems and Supply Chain 9-3 How do customer relationship management systems help firms What Is Customer Relationship Management? 353 • Customer Relationship xii Contents 9-4 What are the challenges that enterprise applications pose, Enterprise Application Challenges 358 Relationship Management 359 9-5 How will MIS
help my career? 363 Review Summary 364 • Key Terms 365 • Review Questions 365 • Hands-On MIS Projects 366 Applications 368 E-commerce: Digital Markets, Digital Goods 372 Opening Case:
Youtube Transforms the Media Landscape 373 digital goods? 375 E-commerce Today 376 • The New E-commerce: Social, Mobile, Local 377 • Types of E-commerce 385 • E-commerce Business Models
386 E-commerce Revenue Models 390 Behavioral Targeting 393 • Social E-commerce and Social Network Location-Based Services and Applications 405 • Other Mobile Commerce Develop an E-commerce Presence Map 406 • Develop a Timeline: Contents xiii 10-7 How will MIS help my career? 408 Review Summary 410 • Key Terms 410 • Review Questions 411 • Hands-On MIS Projects 412 Chapter 11 Managing Knowledge and Artificial Intelligence 418 Opening Case: Machine Learning Helps Akershus University Hospital Make
11-1 What is the role of knowledge management systems in Important Dimensions of Knowledge 422 • The Knowledge Evolution of AI 427 • Major Types of AI 428 • Expert Systems 428 • Enterprise Content Management Systems 439 • Locating and Sharing Knowledge Workers and Knowledge Work 441 Interactive Session | Management Sargent & Lundy Learns to Manage Requirements of Knowledge Work Systems 443 • Examples of Knowledge Interactive Session | Technology The Reality of Virtual Reality 446 The Company 447 • Position Description 448 • Job Requirements 448 • References: 456 xiv Contents Enhancing Decision Making 458 Chapter 12 Opening Case: Big Data and the Internet of Things Drive Precision Agriculture 459 making process work? 461 Business Value of Improved Decision
Making 461 • Types of Decisions 462 • Managerial Roles 464 • Real-World Decision Making 466 • High-Velocity What Is Business Intelligence? 468 • The Business Intelligence Decision Support for Operational and Middle Management 475 • D ecision Group Decision-Support Systems (GDSS) 481 The Company 482 • Position Description 482 • Job Requirements 482 • PART FOUR Building and Managing Systems 491 Chapter 13 Building Information Systems 492 Opening Case: Cameron International Builds a New System for Financial 13-1 How does building new systems produce organizational change? 495 Systems Development and Organizational Change 495 Processes 497 Business Process Redesign 498 Contents xv 13-2 What are the core activities in the systems development Systems Analysis 502 • Systems Design 503 • Completing the Systems Structured Methodologies 507 • Object-Oriented Development 509 • Traditional Systems Life Cycle 511 • Prototyping 512 • End-User Rapid Application Development (RAD), Agile Development, and DevOps 517 • The Company 520 • Position Description 520 Mobile Apps 521 Job Requirements 522 • Interview Questions 522 • Author Tips 523 Discussion Questions 525 Cloud 528 Chapter 14 Managing Projects 532 Opening Case: Sound Project Management Helps Stepan Company Improve 14-1 What are the objectives of project management, and why is it so Runaway Projects and System Failure 535 • Project Management Management Structure for Information Systems Projects 537 • Linking Systems Information System Costs and Benefits 542 • Capital Budgeting for xvi
Contents 14-4 What are the principal risk factors in information systems projects, and The
Company 553 Cloud 554 Position Description 555 • Job Requirements 555 • Interview Managing Global Systems 564 Opening Case: New Systems Help Eli Lilly Standardize as a Global 15-1 What major factors are driving the internationalization of Developing an International Information Systems Architecture 567 • Global Strategies
and Business Organization 573 • Global Systems to A Typical Scenario: Disorganization on a Global Scale 576 • Global Systems Computing Platforms and Systems Integration 581 • Connectivity 581 • The Company 583 Position Description 585 • Job Requirements 585 • Interview Contents xvii Interactive Session | Management AbbVie Builds a Global Systems Review
Summary 588 • Key Terms 588 • Review Questions 589 • Hands-On MIS Projects 589 Glossary G-1 Indexes I-1 BUSINESS CASES AND INTERACTIVE SESSIONS Here are some of the business firms you will find described in the cases and Interactive Sessions of Chapter 1: Information Systems in Global Business Today PCL Construction: The New Digital Firm Chapter 2: Global E-business and Collaboration Enterprise Social Networking Helps Sanofi Pasteur Innovate and Improve Quality Chapter 3: Information Systems, Organizations, and Strategy Technology Helps Starbucks Find Better Ways to Compete Chapter 4: Ethical and Social Issues in Information Systems Are Cars Becoming Big Brother on Wheels? Chapter 5: IT Infrastructure and Emerging Technologies PeroxyChem’s Cloud Computing Formula for Success Chapter 6: Foundations of Business Intelligence: Databases and Information Data Management Helps the Charlotte Hornets Learn More About Their Fans Chapter 7: Telecommunications, the Internet, and Wireless Technology Tour de France Wins with Wireless Technology Chapter 8: Securing Information Systems Hackers Target the U.S. Presidential Election: What Happened? Chapter 9: Achieving Operational Excellence and Customer Intimacy: Enterprise Avon Beautifies Its Supply Chain Chapter 10: E-commerce: Digital Markets, Digital Goods Youtube Transforms the Media Landscape Chapter 11: Managing Knowledge and Artificial Intelligence Machine Learning Helps Akershus University Hospital Make Better Treatment Decisions Chapter 12: Enhancing Decision Making Big Data and the Internet of Things Drive Precision Agriculture Chapter 13: Building Information Systems Cameron International Builds a New System for Financial Reporting Chapter 14: Managing Projects Sound Project Management Helps Stepan Company Improve Financial Planning Chapter 15: Managing Global Systems New Systems Help Eli Lilly Standardize as a Global Company PREFACE New To This Edition xx
Management Information Systems, 16th edition has new features and content to New Features • New Career Opportunities section in each chapter, identified by , • New Conceptual Videos collection includes 45 conceptual videos of • New Video Cases collection: 36 video cases (two or more per chapter) •
Learning Tracks: 49 Learning Tracks in MyLab MIS for additional cov- New Topics The 16th edition features all new opening, closing, and Interactive Session • Updated coverage
of artificial intelligence (AI): Chapter 11 has • Big Data and the Internet of Things: In-depth coverage of big data, big Preface xxi • Cloud Computing: Updated and expanded coverage of cloud • Social, Mobile, Local: New e-commerce content in Chapter 10 describ- • Social Business: Expanded coverage of social business, introduced in • Machine learning • Natural language processing • Computer vision systems • Robotics • “Deep learning” • Supervised learning • Unsupervised learning • Edge computing • 5G networks • General Data Protection Regulation (GDPR) • Mobile device management (MDM) • Office 365 • Blockchain • Data lake • Distributed database • FinTech The CORE Laudon text and MyLab MIS provide the most up-to-date and com- The MyLab MIS platform provides an interactive digital environment xxii Preface features to a digital platform that emphasizes videos, animations, interactive Reach Every Student with MyLab MIS MyLab is the teaching and learning platform that empowers you to reach every Solving Teaching and Learning Challenges The Laudon learning package is more current, real-world, and authoritative The Laudons are known for
their outstanding real-world case studies, which The Laudon text and learning package now has a very strong career
focus, The MyLab MIS edition offers unique digital interactive features that hold The Core Text The core text provides an overview of fundamental MIS concepts using an Preface xxiii Case Study and Instructional Video Package: 36 video case studies (two to three • Select race Management Business A diagram accompanying Chapter Organization Each chapter contains the following elements: • A Chapter Outline based on Learning Objectives • Lists of all the Case Studies and Video Cases for each chapter • A chapter-opening case describing a real-world organization to establish • A diagram analyzing the opening case in terms of the management, • Two Interactive Sessions with Case
Study Questions job hunting and career preparation material Decision Problems, a hands-on application software project, and a xxiv Preface Student Learning-Focused Student
Learning Objectives are organized around a set of study questions to Key Features We have enhanced the text to make it more interactive, leading edge, and ap- Business-Driven with Real-World Business Cases The text helps students see the direct connection between information systems We use current (2018) examples from business and public organizations Interactivity There’s no better way to learn about MIS than by doing MIS! We provide dif- • MyLab MIS Online Video Case Package. Students can watch short • MyLab MIS Online Conceptual Videos. Forty-five video animations • Interactive Sessions. Two short cases in each chapter have been Preface xxv 98 Part One Organizations, Management, and the Networked Enterprise INTERACTIVE SESSION ORGANIZATIONS Digital Technology Helps Crayola Brighten Its Brand Crayola is one of the world’s most beloved brands help children learn and play in colorful ways. The Each chapter contains The Crayola crayon box became part of the col- Crayola is using digital technology, but not to re- CASE STUDY QUESTIONS 3. What people issues did Crayola have to address in Case Study Questions •
Hands-On MIS Projects. Every chapter concludes with a Hands-On chapter. • Collaboration and Teamwork Projects. Each
chapter features a col- xxvi Preface Students practice using Each chapter features a Improving Decision Making: Using Web Tools
to Configure and Price an Automobile of CarsDirect (www.carsdirect.com) and begin your investigation. Locate the Ford Escape. Research the vari- Customization and Flexibility Our Learning Tracks and Video Cases in MyLab MIS give instructors the flexibil- Learning Tracks There are 49 Learning Tracks in MyLab MIS available to instructors and Chapter Learning Tracks Chapter 1: Information Systems How Much Does IT Matter? How Computer Hardware Works Preface xxvii Chapter Learning Tracks Chapter 6: Foundations of Database Design, Normalization, and Entity-Relationship
Diagramming Chapter 7: Telecommunications, Broadband Network Services and Technologies Chapter 8: Securing Information The Booming Job
Market in IT Security Chapter 9: Achieving Opera- SAP Business Process Map Chapter 10:
E-commerce: Digital E-commerce Challenges: The Story of Online Groceries Chapter 11: Managing Challenges of Knowledge Management Systems Chapter 12: Enhancing Decision Building and Using Pivot Tables Chapter 13: Building Information
Unified Modeling Language Chapter 14: Managing Projects Capital Budgeting Methods for Information Systems Investments Video Cases and Instructional Videos Instructors can download step-by-step instructions
for accessing the video cases Chapter Video Chapter 1: Information Systems in Global Business in the Cloud: Facebook, Google, and eBay Data Centers xxviii Preface Video Cases and Instructional Videos (Continued) Chapter Video Chapter 6: Foundations of Business Dubuque Uses Cloud Computing and Sensors to Build a Smarter
City Chapter 7: Telecommunications, the Internet, Telepresence Moves out of the Boardroom and into the Field Chapter 8: Securing Information Systems Stuxnet and Cyberwarfare Chapter 9: Achieving Operational Life Time Fitness Gets in Shape with Salesforce CRM Chapter 10: E-commerce: Digital Markets, Walmart Takes on Amazon: A Battle of IT and Management
Systems Chapter 11: Managing Knowledge and How IBM's Watson Became a Jeopardy Champion Chapter 12: Enhancing Decision Making PSEG Leverages Big Data and Business Analytics Using GE’s
Predix Platform Chapter 13: Building Information Systems IBM: Business Process Management in a SaaS Environment Chapter 14: Managing Projects Blue Cross Blue
Shield Smarter Computing Project Chapter 15: Managing Global Systems Daum Runs Oracle Apps on Linux Developing Career Skills For students to succeed in a rapidly changing job market, they should be aware Career Opportunities and Resources Every student who reads this text wants to know: How will this book help my ca- Preface xxix The Career Opportunities section,
identified by this icon is the last Below are the job descriptions used in this edition based on postings from Chapter Career Opportunity Job Description 1. Business Information Systems in Your Career Financial Client Support and Sales Assistant I nformation Management Automotive Digital Advisor Students can use Career Opportunities to shape their resumes and career plans In MyLab MIS we have provided additional Career Resources, including job- xxx Preface Chapter Table of Contents Overview Chapter 1 Title Instructor Teaching Resources Supplements available to instructors Features of the Supplement Computerized TestGen The authors have worked closely with skilled test item writers to ensure that AACSB Assessment Guidelines We have attempted in this book to support AACSB efforts to encourage TestGen allows instructors to: Preface xxxi Supplements available to instructors Features of the Supplement PowerPoints meet accessibility standards for students with disabilities. Acknowledgments The production of any book involves valued contributions from a number of Our special thanks go to our supplement authors for their work, including Special thanks to colleagues at the Stern School of Business at New We also want to especially thank all our reviewers whose suggestions helped Brad Allen, Plymouth State University xxxii Preface Essia Hamouda, University of California–Riverside PART ONE Organizations, CHAPTER 1 CHAPTER 3 CHAPTER 2 CHAPTER 4 PART ONE introduces the major themes of this book, raising a series of important
questions: 1 CHAPTER 1 Information Systems in Global LEARNING OBJECTIVES CHAPTER CASES After reading this chapter, you will be able to PCL Construction: The New Digital Firm 1-3 What academic disciplines are used Instructional Video: 1-4 How will MIS help my career? MyLab MIS Discussion Questions: 1-4, 1-5, 1-6; Hands-on MIS Projects: 1-7, 1-8, 1-9, 1-10; 2 PCL Construction: The New Digital Firm Many people think the most widely used tool in a construction project © Ndoeljindoel/123RF PCL is a group of independent general contracting construction companies, At a PCL job site, you’ll now see employees using In the past, on-site trailers used to
house large PCL Construction plans are now in digital form, or the paper versions are 3 4 Part One Organizations, Management, and the Networked Enterprise PCL implemented Project Document Controls (PDC) to facilitate collabora- PCL started moving its
computing work to Microsoft Azure Cloud, which hosts Sources: “Technology and Innovation,” pcl.com, accessed February 9, 2018; “PCL: Capitalizing PCL Construction’s experience shows how essential information systems are The chapter-opening diagram calls attention to
important points raised by this Chapter 1 Information Systems in Global Business Today 5 • Devise technology Management Business • Revise job functions Organization Information Business processes Project Management System • Reduce
costs • Analytics dashboard Analytics Dashboard • Monitor project performance displaying key project performance indicators on a digital dashboard. The use
of It is also important to note that deploying information technology has changed Here are some questions to think about: How did information technology 1-1 How are information systems transforming business, and why are they so essential for It’s not business as usual in the United States or the rest of the global economy 6 Part One Organizations, Management, and the Networked Enterprise FIGURE 1.1 INFORMATION TECHNOLOGY CAPITAL INVESTMENT Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, Table 5.3.6. Real Private 3000 Total Investment 2500 Investment (billions) 2000 1500 1000 IT Investment
33% 0 1999 As managers, most of you will work for firms that are intensively using How Information Systems Are Transforming Business You can see the results of this large-scale spending around you every day by By June 2017, more than 140 million businesses worldwide had dot-com Inter- Chapter 1 Information Systems in Global Business Today 7 levels of operational efficiency. Supply chains have become more fast-paced, As newspaper print
readership continues to decline, in 2017 more than 180 E-commerce and Internet advertising continue to expand. Google’s U.S. online New federal security and accounting laws requiring many businesses to What’s New in Management Information Systems? Plenty. In fact, there’s a whole new world of doing business using new tech- IT Innovations. A continuing stream of
information technology innovations New Business Models. For instance, the emergence of online video ser- 8 Part One Organizations, Management, and the Networked Enterprise and broadcast producers of TV shows, and p otentially disrupting cable E-commerce Expansion. E-commerce generated about $700 billion in Management Changes. The management of business firms has changed: Changes in Firms and Organizations. Compared to industrial organiza- You can see some of these trends at work in the Interactive Session on Man- 9 Part Two Information Technology Infrastructure Chapter 1 Information Systems in Global Business Today 9 INTERACTIVE SESSION MANAGEMENT Can You Run the Company with Your iPhone? Can you run the company just by using your iPhone? using the Close Call app to describe situations and 10 Part One Organizations, Management, and the Networked Enterprise departure and arrival, the offsite Centralized Load In addition to facilitating managerial work, mobile CASE STUDY QUESTIONS 1. What kinds of applications are described here? 3. What kinds of businesses are most likely to benefit iPhone and iPad Intelligence Mobile © Mama_mia/Shutterstock Whether it’s attending an online meeting, checking orders, working with files and Chapter 1 Information Systems in Global Business Today 11 Globalization Challenges and Opportunities: In 1492, Columbus reaffirmed what astronomers were long saying: the world In 2005, journalist Thomas Friedman wrote an influential book
declaring the A significant percentage of the economy of the United States and other It’s not just goods that move across borders. So too do jobs, some of them The U.S. economy creates more than 3.5 million new jobs in a normal, The challenge for you as a business student is to develop high-level skills 12 Part One Organizations, Management, and the Networked Enterprise The challenge for your business is to avoid markets for goods and services that What does globalization have to do with management information systems? The Emerging Digital Firm All of the changes we have just described, coupled with equally significant orga- Business processes refer to the set of logically related tasks and behaviors Key corporate assets—intellectual property, core competencies, and financial Digital firms sense and respond to their environments far more rapidly than Many firms, such as Cisco Systems, 3M, and GE (see the Chapter 12 ending Chapter 1 Information Systems in Global Business Today 13 Strategic Business Objectives of Information Systems What makes information systems so essential today? Why are businesses invest- Entire sectors of the economy are nearly inconceivable without substan- There is a growing interdependence between a firm’s ability to use informa- Specifically, business firms invest heavily in information systems to achieve FIGURE
1.2 THE INTERDEPENDENCE BETWEEN ORGANIZATIONS AND In contemporary systems, there is a growing interdependence between a firm’s information Hardware Business Strategic
Software Data Management Business Processes Business Information Telecommunications 14 Part One Organizations, Management, and the Networked Enterprise and business models; customer and supplier intimacy; improved decision mak- Operational Excellence Businesses continuously seek to improve the efficiency of their operations in Walmart, the largest retailer on earth, exemplifies the power of informa- New Products, Services, and Business Models Information systems and technologies are a major enabling tool for firms to
Today’s music industry is vastly different from the industry a decade ago. Customer and Supplier Intimacy When a business really knows its customers and
serves them well, the custom- The Mandarin Oriental in Manhattan and other high-end hotels exemplify JCPenney exemplifies the benefits of information systems–enabled sup- Chapter 1 Information Systems in Global Business Today 15 United States, the record of the sale appears immediately on computers in Improved Decision Making Many business managers operate in an information fog bank, never really h aving For instance, Verizon Corporation, one of the largest telecommunications Competitive Advantage When firms achieve one or more of these business objectives—operational Survival Business firms also
invest in information systems and technologies because There are many federal and state statutes and regulations that create a legal 16 Part One Organizations, Management, and the Networked Enterprise years. The Dodd-Frank Wall Street Reform and
Consumer Protection Act (2010), 1-2 What is an information system? How does it work? What are its management, So far we’ve used information systems and technologies informally without defin- What Is an Information System? An information system can be defined technically as a set of interrelated Information systems contain information about
significant people, places, A brief example contrasting information
and data may prove useful. Super- Three activities in an information system produce the information that orga- Chapter 1 Information Systems in Global Business Today 17 FIGURE 1.3 DATA AND INFORMATION Data Information Information create new products or services. These activities are input,
processing, and out- In PCL’s project management system, input includes the names and addresses Although computer-based information systems use computer technology A house is an appropriate analogy. Houses are built
with hammers, nails, and |