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Strategic business objectives of information systems

By: Zeeshan Ahmed Bhatti. Strategic business objectives of information systems. Strategic Business Objectives of IS. Entire sectors of economy are nearly inconceivable w/out substantial investment in IT E.g., Google, Ebay etc.

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Strategic business objectives of information systems

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  1. By: Zeeshan Ahmed Bhatti Strategic business objectives of information systems

  2. Strategic Business Objectives of IS • Entire sectors of economy are nearly inconceivable w/out substantial investment in IT • E.g., Google, Ebayetc. • Today no industry can exist without the use of Information Technology • Finance, Insurance, Real Estate, Aviation etc. • IT has now become the core competence of a firm • E.g., HR, Finance etc.

  3. Strategic Business Objectives of IS • There is an interdependence b/w a firm’s ability to use IT and its ability to implement corporate strategies and goals • Depends on what technology it uses? • What is that technology capable of doing? • E.g., Is that technology capable of achieving what the firms wants to achieve in next 5 or 10 years? • Specifically, Businesses invest heavily in IS to achieve 6 strategic business objectives: • Operational excellence, new products, services, Customer and supplier intimacy, decision making and competitive advantage

  4. 1) Operational Excellence • Businesses continuously seek to improve efficiency of their operations • IS helps managers to achieve that • E.g., Wal-Mart (Rev. $447 Billion) has a RetailLink system – As soon as a customer purchases an item, the supplier monitoring the item knows to ship a replacement

  5. 2) New Products, Services, and Business Models • IS – a major tool for firms to create new products & services • Apple Inc. transformed an old business model of music distribution based on vinyl records, tapes, and CDs into an online, legal distribution model based on its own iPod technology platform. • Blockbuster and Netflix !!

  6. 3) Customer & Supplier Intimacy • Business wants Customer Loyalty – Repurchase behavior • Ex. Mandarin Oriental Hotels use IS to keep track of their guest preferences – Room temp., Lights; frequently dialed nos. etc • Similarly, Business needs to be engaged with suppliers – more engagement : less costs • JC Penney stores in US sales’ record appear in Hong Kong (Supplier). They know what sizes, colors and styles are needed.

  7. 4) Improved Decision Making • Many business mgrs operate on an information fog bank • Never having right info at the right time to make the right decision • E.g., Consider the outage of your Broadband or Cellular Connection • Result: Over or Under-production of goods & services, misallocation of resources, and poor response times • IS makes it possible to use real-time data • E.g., Verizon’s Web-based digital dashboard for customer complaints, network performance, line outages etc.

  8. 5) Competitive Advantage • Doing things better than your customers • E.g., Toyota’s TPS (Toyota Production System) focuses on organizing work to eliminate wastes • IS help Toyota implement the TPS and produce vehicles (customized) based on what the customers have actually ordered

  9. 6) Survival • Necessity of doing business • Necessities are driven by industry-level changes • E.g., Citi Bank’s ATM initiative in NYC in 1977 urged other banks to do so as well • Similarly, some govt. regulations make it necessary e.g., in Pakistan PTA’s initiative about customer SIM cards information

  10. So……What is an IS? • Information technology (IT) consists of all the hardware and software that a firm needs to use in order to achieve its business objectives • An Information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization

  11. Information Vs Data • Data: Streams of raw facts • Information: interpretation of data

  12. Functions of an IS • Input: Collects raw data from within the organization or from external environment • Processing: coverts raw data into meaningful form • Output: transfers processed info to its users • Feedback: by the members to evaluate or correct the input stage • E.g., London2012 Website about number of medals; Inputs? Processing? Outputs? W.r.t. Countries, Players etc.

  13. Functions of an IS

  14. Dimensions of IS

  15. Organization / Management • First Line, Middle Mgrs, Top Executives, Knowledge workers • Technology: • Hardware: Physical equipment for input, processing, and output activities in an IS • Software: pre-programmed instructions that control and coordinate the computer H/W • Networking & Telecommunication Tech: links various pieces of H/W and transfers data • Internet: Network of networks • Intranet: internal corporate networks • Extranet: private intranet networks extended outside the firm

  16. Contemporary Approaches to IS

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