1 Information Systems in

Global Business Today

Manajemen Sistem Informasi CSIM603182

Learning Objectives
• How are information systems transforming
business, and why are they so essential for
running and managing a business today?

• What is an information system? How does it

work? What are its management, organization,
and technology components? Why are
complementary assets essential for ensuring
that information systems provide genuine
value for organizations?

• What academic disciplines are used to study

information systems, and how does each
contribute to an understanding of information
systems?

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Why IS are Essential for Running and Managing A
Business Today?

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IT Capital Investment

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How IS are Transforming Business
Changes in technology and new innovative business models have transformed social life and
business practices.

• Mobile phones: Smartphone, Tablet

• Social network: X, Instagram, Tiktok
• E-marketplace: Tokopedia, Shopee
• Internet advertising: Google ads, Meta ads

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Continuous Change in MIS Field (1/2)
• IT innovations
• Example: emergence of cloud computing, the growth of a mobile digital business
platform based on smartphones and tablet computers, big data and the Internet of
Things (IoT), business analytics, machine learning systems and the use of social networks
by managers to achieve business objectives.

• New business models

• Example: online video services for streaming or downloading, such as Netflix, Apple
iTunes, and Amazon, has forever changed how premium video is distributed and even
created.

• E-commerce expansion
• Physical products.
• Services.

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Continuous Change in MIS Field (2/2)
• Management changes
• Management is going mobile. Managers on the move are in direct, continuous contact
with their employees. The growth of enterprise-wide information systems with
extraordinarily rich data means that managers no longer operate in a fog of confusion but
instead have online, nearly instant access to the really important information they need
for accurate and timely decisions.

• Change in firms and organizations

• More emphasis on employees taking on multiple roles and tasks and collaborating with
others on a team, competency and skills rather than position in the hierarchy, higher-
speed and more-accurate decision making based on data and analysis.

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Globalization Challenges and Opportunities
• Goods and jobs move across borders.
• Service jobs move offshore to lower-wage countries outsourcing.
• Develop high-level skills through education and on-the-job experience that cannot be
outsourced.
• Avoid markets for goods and services that can be produced offshore much less expensively.

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The Emerging Digital Firm
• A digital firm is one in which nearly all of the organization’s significant business relationships
with customers, suppliers, and employees are digitally enabled and mediated.
• Key corporate assets—intellectual property, core competencies, and financial and human
assets—are managed through digital means.
• In a digital firm, any piece of information required to support key business decisions is available
at anytime and anywhere in the firm.

• Business processes refer to the set of logically related tasks and behaviours that organizations
develop over time to produce specific business results and the unique manner in which these
activities are organized and coordinated.
• Developing a new product, generating and fulfilling an order, creating a marketing plan, and
hiring an employee are examples of business processes, and the ways organizations
accomplish their business processes can be a source of competitive strength.

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Six Strategic Business Objectives
• Operational excellence
• Information systems and technologies are some of the most important tools available to managers for achieving
higher levels of efficiency and productivity in business operations.
• New products, services and business models
• Information systems and technologies are a major enabling tool for firms to create new products and services as
well as entirely new business models.
• Customer and supplier intimacy
• Use of information systems and technologies to achieve customer intimacy. When a business really knows its
customers and serves them well, the customers generally respond by returning and purchasing more.
• Improved decision making
• Information systems and technologies have made it possible for managers to use real-time data from the
marketplace when making decisions.
• Competitive advantage
• Doing things better than your competitors, charging less for superior products, and responding to customers and
suppliers in real time all add up to higher sales and higher profits that your competitors cannot match.
• Survival
• Business firms also invest in information systems and technologies because they are necessities of doing business.
Sometimes these “necessities” are driven by industry-level changes
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Definition of IS
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. 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.

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Definition of IS

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Data and Information

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Functions of an IS

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Dimensions of IS

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Organizations
• Organizations have a structure that is
composed of different levels and specialties.
Their structures reveal a clear-cut division of
labor. Authority and responsibility in a
business firm are organized as a hierarchy, or
a pyramid structure. The upper levels of the
hierarchy consist of managerial, professional,
and technical employees, whereas the lower
levels consist of operational personnel.

• Culture: Fundamental set of assumptions,

values, and ways of doing things, that has
been accepted by most of its members

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Major Business Functions

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Management
Management’s job is to make sense out of the many situations faced by organizations,
make decisions, and formulate action plans to solve organizational problems.

Manager’s tasks:
• Set the organizational strategy for responding to those challenges.
• Allocate the human and financial resources to coordinate the work and achieve
success.
• Exercise responsible leadership.
• Create new products and services and even re-create the organization from time
to time.

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Information Technology
• Computer hardware
• The physical equipment used for input, processing, and output activities in an information system.
• Computer software
• The detailed, preprogrammed instructions that control and coordinate the computer hardware components in an
information system
• Data management technology
• The software governing the organization of data on physical storage media
• Networking and telecommunications tech
• Physical devices and software, links the various pieces of hardware and transfers data from one physical location to
another.
• Internet
• Intranet
• Extranet
• Information technology (IT) infrastructure
• Foundation, or platform, on which the firm can build its specific information systems.

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A Business Perspective on Information Systems

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Complementary Asset

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Complementary
Social, Managerial,
And Organizational
Assets Required To
Optimize Returns
From Information
Technology
Investments

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How IT Become Mediator in Business
Disintermediation Hypermediation
Perubahan dalam konsep bisnis di mana “middleman” Interaksi yang ditemukan dalam banyak transaksi online
dieliminasi. yang tersedia di internet. Mencerminkan “ a network of
Misal: Aplikasi web pembelian
countless agents.” Misal: Pay per click yang
tiket pesawat Garuda
Indonesia yang dikelola ditawarkan Google Ads
maskapai. Pelanggan dapat dimana pengiklan hanya
langsung membeli tanpa dikenai biaya berdasarkan
melalui intermediaries. jumlah klik pada iklan.

Reintermediation Infomediation
Penyusunan kembali pembeli, penjual dan mitra lainnya TI menyediakan semua kebutuhan informasi bagi para
dalam tradisional supply chain dengan cara baru. pengguna teknologi.
Misal: Tani Hub menghubungkan Misal: Portal informasi turis
antara petani (mitra pemasok), Hong Kong yang
distributor (mitra penyalur), dan menyediakan katalog
pembeli di sebuah platform restoran sesuai kebutuhan
berupa web-Based marketplaces. wisata kuliner turis.

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Academic Discipline to Study IS

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Academic Discipline to Study IS
• MIS combines the work of computer science, management science, and operations research
with a practical orientation toward developing system solutions to real-world problems and
managing information technology resources.
• It is also concerned with behavioral issues surrounding the development, use, and impact of
information systems, which are typically discussed in the field, of sociology, economics, and
psychology.
• Sociotechnical view.
• In this view, optimal organizational performance is achieved by jointly optimizing both the
social and technical systems used in production.
• Adopting a sociotechnical systems perspective helps to avoid a purely technological
approach to information systems.

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Property Rights: Intellectual Property
Intellectual property is defined as tangible and intangible products of the mind created by
individuals or corporations.

• Copyright
• A statutory grant that protects creators of intellectual property from having their work
copied by others for any purpose during the life of the author plus an additional 70 years
after the author’s death.
• In software program, copyright protects against copying entire programs or their parts.
• Patents
• A patent grants the owner an exclusive monopoly on the ideas behind an invention for 20
years.
• The strength of patent protection is that it grants a monopoly on the underlying concepts
and ideas of software. Criteria: nonobviousness (e.g., the work must reflect some special
understanding and contribution), originality, and novelty.

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Property Rights: Intellectual Property
• Trademarks
• Trademarks are the marks, symbols, and images used to distinguish products in the
marketplace.
• Trademark laws protect consumers by ensuring they receive what they paid for and
protect the investments that firms have made to bring products to market.
• Trade Secrets
• Any intellectual work product—a formula, device, pattern, or compilation of data—used
for a business purpose.
• Software that contains novel or unique elements, procedures, or compilations can be
considered a trade secret.
• Trade secret law protects the actual ideas in a work product, not only their manifestation.

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Reference
1. Laudon, K. C., & Laudon, J. P. (2020). Management information systems: Managing the digital
firm (Sixteenth edition, Global edition). Pearson.
2. McNurlin, Barbara C.; Sprague, Ralph H. Jr. , Barbara C.; Sprague, Ralph H. Jr., Information
Systems Management, Pearson New International Edition, Prentice , Pearson New
International Edition, Prentice-Hall, 2014.

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