Chapter 1: Summary  
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Explain why information systems are so important today for business and management.

Information systems are a 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. Information technology has become the largest component of capital investment for firms in the United States and many industrialized societies.

Evaluate the role of information systems in today’s competitive business environment.

Information systems have become essential for helping organizations deal with changes in global economies and the business enterprise. Information systems provide firms with communication and analytic tools for conducting trade and managing businesses on a global scale. Information systems are the foundation of new knowledge-based products and services in knowledge economies and help firms manage their knowledge assets. Information systems make it possible for businesses to adopt more flexible arrangements of employees and management that can coordinate with other organizations across great distances. 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. The Internet is bringing about a convergence of technologies that is further widening the use of information systems in business and transforming industries and business models.

Assess the impact of the Internet and Internet technology on business and government.

The Internet provides global connectivity and a flexible platform for the seamless flow of information across the enterprise and between the firm and its customers and suppliers. It is the primary technology infrastructure for electronic commerce, electronic business, and the emerging digital firm. In electronic commerce (e-commerce), businesses can exchange electronic purchase and sale transactions with each other and with individual customers. Electronic business (e-business) uses Internet and other digital technology for organizational communication and coordination, collaboration with business partners, and the management of the firm, as well as for
electronic commerce transactions. Digital firms use Internet technology intensively to manage their internal processes and relationships with customers, suppliers, and other external entities. E--government uses the Internet and intranets to improve delivery of government services, make internal operations more efficient, and empower citizens to network electronically with other citizens.

Define an information system from both a technical and business perspective and distinguish between computer literacy and information systems literacy.

An information system collects, stores, and disseminates information from an organization’s environment and internal operations to support organizational functions and decision making, communication, coordination, control, analysis, and visualization. Information systems transform raw data into useful information through three basic activities: input, processing, and output. From a business perspective, an information system creates economic value for the firm as an organizational and management solution, based on information technology, to a challenge posed by the environment. The information system is part of a series of value-adding activities for acquiring, transforming, and distributing information to improve management decision making, enhance organizational performance, and, ultimately, increase firm profitability.

           Information systems are rooted in organizations; they are an outcome of organizational structure, culture, politics, workflows, and business processes. They are instruments for organizational change and value creation, making it possible to recast these organizational elements into new business models and redraw organizational boundaries. Managers are problem solvers who are responsible for analyzing the many challenges confronting organizations and for developing strategies and action plans. Information systems are one of their tools, delivering the information required for solutions. Information systems both reflect management decisions and serve as instruments for changing the management process. Information systems cannot make managers and organizations more effective unless they are accompanied by complementary assets such as new business processes, organizational culture, or management behavior.

           Information systems literacy requires an understanding of the organizational and management dimensions of information systems as well as the technical dimensions addressed by computer literacy. Information systems literacy draws on both technical and behavioral approaches to studying information systems. Both perspectives can be combined into a sociotechnical approach to systems.

Identify the major management challenges to building and using information systems.

There are five key management challenges in building and using information systems: (a) obtaining business value from information systems; (b) providing appropriate complementary assets to use information technology effectively; (c) understanding the system requirements of a global business environment; (d) creating an information technology infrastructure that is flexible enough to support changing organizational goals; and (e) designing systems that people can control, understand, and use in a socially and ethically responsible manner.