Prepared by Shahida Akhter Khanam ID# 1130152660

Q 1. How are information systems transforming business and what is their relationship to globalization? Describe how information systems have changed the way businesses operate and their products & services Identify three major new information system trends Describe the characteristics of a digital firm Describe the challenges and opprtunities of globalization ina flattened world

Ans. The adoption of information technology has been growing widely all around the world. We can not think of a moment without using IT devices. The word IT has become an essencial element in our every day life. For instance, we are now more addicted to wireless cell phones than land lines.

The use of the technology has brought significant changes into the fundamental business procedures by evolving from the automation of structured processes to systems. Old systems are creatively being destroyed and new systems are taking their place. Today the concept of in-store shopping has replaced by the online shopping. Nowadays customers do not visit retail outlets to get informations about products and services, rather they google it for wide range of solutions. Firms producing goods and serviceson a global scale achieve extraordinary cost reduction by finding low-cost suppliers and managing production facilities in other countries. Currently, more businesses are using the Internet as an efficient way to reach as many customers as possible. Its more than just for email; companies now use the web for advertising, sales and communicating with consumers. As a result, workers who are well versed in Internet applications are in demand. Although social networking websites such as Facebook and Twitter were once considered distractions, many campus-based and online colleges are now realizing the importance of these platforms in the business sector. In fact, some schools even offer classroom-based or online courses that focus purely on ways to use these services to enhance a companys marketing efforts. If you need more information about online university, look on the internet.

In todays world any modern business requires information systems to handle everything, from customer information to human resources. Without information systems to handle the various tasks of an organization, a company would not be able to handle its operations efficiently. Again, to operate business efficiently, IT sysytems requires upgradation. The generations most recent information technology system includes ) the emerging mobile digital platform to compete with the PC as a business system, for example: Blackberry gives instant professional solutions to its end customers. The use of

mobiles is no more limited to the deliverance of personal messages. The advancements in mobile technology and their uses have surprised us to a greater extent, both negatively as well as positively. Observing the way of giving out news, mobile technology now allows us to get breaking news as soon as possible. An individual can now make quick and informed decisions via real time information by mobile technology. The amazing features of Wi-Fi and GPRS have provided the facility of using Internet anywhere and anytime. However, Mobile computing will create a major new market for the software industry, and will stimulate the next major category of IT. ii) The growth of online software as service; major business applications are now delivered online as an internet service rather than as boxed software or custom systems. Today the software industry is one of the most promising industries along with IT and that is why the number of competition in the field is growing each day. iii) Companies are discovering new ways to use Internet technology in daily business. For example, cloud computing where more and more business software runs over the internet. Companies are using this kind of software to set up web-based meetings. Cloud computing allows businesses with various locations to meet online. It reduces the need for airfare and hotel stays, thus saving the company money.

Organizations now leverage information technology to digitalize business processes and foster creativity. Today businesses realize that we live in an economy that is moving towards digital firms. Even developing countries like Bangladesh are taking steps ahead of the game in technology and on-line services. Electronic communication increases the overall amount of communication within and outside a firm. For example, Siemens AG (siemens.com) was an established old-economy company that saw the need to transform itself into a digital enterprise. Its use of Web-based systems to support buying, selling, collaboration, and customer service exemplifies EC. The digital enterprise uses IT to accomplish one or more of three basic objectives which are reaching and engaging customers more effectively, boosting employee productivity and improving operating efficiency. It also uses converged communication and computing technology to improve business processes and performance. In short, digital firm means every business process in the company is digitized. However, few characteristics of fully digital firms are as follows: Significant business relationships are digitally enabled and mediated such as relationships between company and customers or suppliers. The system that is used to contact with customers called CRM (Customers Relationship Management). And the relationship with supplier is managed by SCM (Supply Chain Management). The examples of fully digitized organizations are Cisco, Accenture, IBM etc. Core business processes are accomplished through digital networks. In the digital firm, the company has to invest in ERP (Enterprise Resources Planning) to link every department in the company together and make the information flows from one department to others smoothly.

 Key corporate assets intellectual property, core competencies, and financial and human assets are managed through digital means. Firms can sense and respond to their environments far more rapidly than traditional firms. They offer extraordinary opportunities for more flexible global organization and management, practicing time-shifting and space-shifting. In digital firm, there is a new type of job which is called telecommuting. It is a job that the workers do not have to work in the office. They can work anywhere and anytime through digital systems. There is no space and time limitation. The business model of digital firm is proved that it could reduce the cost for doing business because the firms do not have to invest in the office and the workers do not have to spend their times in the traffic. Moreover, telecommuting job does not create any pollution to the society and these are the main advantages of this kind of job.

Globalization is the information can be easily transported from one country or one continent to others. The emergence of the internet into the international communication system has stimulated globalization by reducing the costs of operating and transaction on a global scale. Markets are moving online and there is growth of e-commerce. Business models and processes is changing to cyber-intermediation for example i-tune is now the biggest music store, Netflix is now the biggest DVD rental store that one can rent the music online or can get free mailing of music to your home. The competition in digital economy is now based on innovations, not on price alone. However, Information systems can flatten organizations by means of reducing the number of levels in an organization by providing managers with information to supervise larger numbers of workers and by giving lower-level employees more decision-making authority. Briefly, information system enables globalization. IT provides the communication network that facilitates the expansion of products, ideas, and resources among nations and among people regardless of geographic location. Creating efficient and effective channels to exchange information, IT has been the catalyst for global integration.

Q 2. Why are information systems so essential for running and managing a business todday? List and describe six reasons why information sysytems are so important for business today.

Ans. Information systems are a foundation for conducting business today. In many industries, survival and even existence is difficult without extensive use of information technology. Information systems have become essential for helping organizations operate in a global economy. Organizations are trying to become more competitive and efficient by transforming themselves into digital firms where nearly all core business processes and relationships with customers, suppliers, and employees are digitally enabled. Businesses today use information systems to achieve six major objectives: operational excellence; new products, services, and business models; customer/supplier intimacy; improved decision making; competitive advantage; and day-to-day survival. 1. Operational excellence: In todays economy, the business goal of every organization is the same- to optimize every function, workflow, and operational process to the greatest extent possible, to provide for improved service performance and substantial cost reduction. Many companies launch programs or deploy new systems to improve the performance of their operations, be it in production, supply chain, marketing or customer service. For example, Wal-Marts continuous inventory replenishment system uses sales data captured at the checkout counter to transmit orders to restock merchandise directly to its suppliers. The system enables Wal-Mart to keep costs low while fine-tuning its merchandise to meet customer demands 2. New products, services, and business models: A number of information systems researchers have found information technology as an important ingredient of innovation development. Firms implement information technology to enhance and enlarge the scope of their products and services. For Example: Apple Inc transformed an old business model based on its iPod technology platform that included Apples iPod; i-Tunes - change entire business model of music industry; i-Phone - without IT, there is no i-phone. i-phone is the major trend of IT convergence, i-Phone change new business model of social network of how people are connected together. In the past PC companies compete with each other but now there is cross-industries competitions such as the competitions between MP3 and cell-phone, cellphone and PC. 3. Customer and supplier intimacy: Supply chain management systems and customer relationship management systems, are designed to support organization-wide process coordination and integration so that the organization can operate efficiently. Supply chain management systems help the firm manage its relationship with suppliers to optimize the planning, sourcing, manufacturing, and delivery of products and services.

For example, J.C.Penneys information system which links sales records to contract manufacture; at Wallmart, whenever one check-out the products, the information will be transferred directly to suppliers. Customer relationship management uses information systems to coordinate all of the business processes surrounding the firms interactions with its customers to optimize firm revenue and customer satisfaction. For example, most high-end hotels like Raddisson, Sonargaon use computers to keep track of guests' preferences, such as their preffered room temperature, check-in time, and television programs. This helps their business to gain customer satisfaction, hence repeat visit.

4. Improved decision making: The IT system in todays world has gone so far that it helps managers to take decisions for the organization. Many managers operate in an information bank, never having the right information at the right time to make an informed decision. Without accurate information, managers must use forecasts, best guesses, luck that can lead to: Overproduction, underproduction of goods and services Misallocation of resources Poor response times These poor outcomes raise costs and lose customers. Information system made it possible for the managers to use real time data from the marketplace when making decision. Very recently, few organization practices IT software that proposes automated decisions based on data given. For Example: Blue Ocean Strategy is newly developed software that helps company to take managerial decisions.

5. Competitive advantage: Refers to create innovation or do something different from competitors (creativity) such as price, products, operation etc. Organizational responses are usually taken in reaction to change in the business environment or to competitors' actions. Sometimes such response may be too late. Therefore, organizations can play a proactive role and make significant changes in their industry before anyone else. A first mover strategy is risky, but can be very rewarding if successful. These competitive advantages maybe based on delivering better performance, charging less for superior products or R=responding to customers and suppliers in real time. However, in almost every industry some firms do better than most others. Theres almost always a stand-out firm. For Examples, In the automotive industry,Toyota and TPS (Toyota Production System) enjoy a considerable advantage over competitors information systems are critical to the implementation of TPS; In off-line retail Wal-Mart, the largest retailer on earth, is the leader; In online music, Apples iTunes is considered the leader with more than 75 percent of the

downloaded music market, and in the related industry of digital music players, the iPod is the leader; In Web search, Google is considered the leader. Firms that do better than others are said to have a competitive advantage over others. They either have access to special resources that others do not, or they are able to use commonly available resources more efficiently, usually because of superior knowledge and information assets. 6. Day to day survival: Business enviroment is changing day by day as consumer demands are changing resulting in changed and upgraded IT system. If competitors already have technologies that are important for their competitiveness, one also needs to acquire them in order to survive in the competition. For instance, Previosly customers had to physically visit banks to perform their transactions or withdraw money. Realizing the problem and customer demand, Citibank introduced the first automatic teller machine to attract customers through higher service levels. Providing ATMs services to retail banking customers is simply a requirement of being in and surviving in the retail banking business. Other banks also introduced the ATM sevice in order to survive in the industry.

However, Information systems are the foundation for conducting business today. In many industries, survival and even existence without extensive use of IT is inconceivable, and IT plays a critical role in increasing productivity. Although information technology has become more of a commodity, when coupled with complementary changes in organization and management, it can provide the foundation for new products, services, and ways of conducting business that provide firms with a strategic advantage.

Q 3. What exactly is an information system? How does it work? What are its management, organization and technology components? Define an information system and describe the activities it perform List and describe the organizational, management, and technology dimensions of information systems. Distinguish between data and information and between information system literacy and computer literacy

Ans. Information system is a set of interrelated components that work together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization. In addition to supporting decision making, coordination, and control, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products. The major activities of an information system are; (i) Input of data resources: Data about business transactions and other events must be captured and prepared for processing by the input activity. Input typically takes the form of data entry activities such as recording and editing. End uses typically record data about transactions on some type of physical medium such as paper form, or enter it directly into a computer system. This usually includes a variety of editing activities to ensure that they have recorded data correctly. Once entered, data may be transferred onto a machine-readable medium such as a magnetic disk until needed for processing. For example, data about sales transactions can be recorded on source documents such as paper sales order forms. Alternately, salespersons can capture sales data using computer keyboards or optical scanning devices; they are visually prompted to enter data correctly by video displays. This provides them with a more convenient and efficient user interface, that is, methods of end user input and output with a computer system. Methods such as optical scanning and displays of menus, prompts, and fill-in-the-blanks formats make it easier for end users to enter data correctly into an information system. (ii) Processing of data into information: Data is typically subjected to processing activities such as calculating, comparing, sorting, classifying, and summarizing. These activities organize, analyze and manipulate data, thus converting them into information for end users. The quality of any data stored in an information system must also be maintained by a continual process of correcting and updating activities. For example, data received about a purchase can be (1) added to a running total of sales results, (2) compared to a standard to determine eligibility for a sales discount, (3) sorted in numerical order based on product identification numbers, (4) classified into product categories (such as food and nonfood items), (5) summarized to provide a sales manager with information about various product categories, and finally, (6) used to update sales records.

(iii) Output of information products: Information in various forms is transmitted to endusers and made available to them in the output activity. The goal of information systems is the production of appropriate information products for end users. Common information products messages, reports, forms, and graphic images, which may be provided by video displays, audio responses, paper products, and multimedia. For example, a sales manager may view a video display to check on the performance of a salesperson, accept a computer-produced voice message by telephone, and receive a printout of monthly sales results. (iv) Storage of data resource: Storage is a basic system component of information systems. Storage is the information system activity in which data and information are retained in an organized manner for later use. For example, just as written text material is organized into words, sentences, paragraphs, and documents; stored data is commonly organized into fields, records, files, and database. This facilitates its later use in processing or its retrieval as output when needed by users of a system. (v) Control of system performance: An important information system activity is the control of its performance. An information system should produce feedback about its input, processing, output, and the system is meeting established performance standards. Then appropriate system activities must be adjusted so that proper information products are produced for end users. For example, a manager may discover that subtotals of sales amounts in a sales report do not add up to total sales. This might mean that data entry or processing procedures need to be corrected. Then changes would have to be made to ensure that all sales transactions would be properly captured and processed by a sales information system.

An information system represents a combination of management, organization, and technology elements. Organization: The organization dimension of information systems involves issues such as the organizations hierarchy, functional specialties, business processes, culture, and political interest groups. Management: The management dimension of information systems involves setting organizational strategies, allocating human and financial resources, creating new products and services and re-creating the organization if necessary. Technology: The technology dimension consists of computer hardware, software, data management technology, and networking/telecommunications technology.

IT mainly deals with data and information of the subject. These two components are different by means of, Data are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use. On the other hand, Information is data that have been shaped into a form that is meaningful and useful to human beings.

However, basic difference lies in between information system literacy and computer literacy as well which as follows; Information literacy is more concerned with creating information useful to an organization and its employees, Whereas computer literacy addresses the simple use of computers. Information systems literacy is a broad-based understanding of information systems. It includes a behavioral as well as a technical approach to studying information systems. As technology uses spread beyond traditional computers, information literacy enables employees and organizations to gain an edge over their competition. In contrast, computer literacy focuses primarily on knowledge of information technology. It is limited to understanding how computer hardware and software works.

Nevertheless, Information systems are a foundation for conducting business today. In many industries, survival and even existence is difficult without extensive use of information technology. Hence, Managers need to understand certain essential features of organizations to build and use information systems successfully.