CHAPTER 1: INFORMATION SYSTEMS AND & STRATEGY
1.1 What is an IS?
the IS mirrors the real world to provide e(icient and convenient access to
information in the world
- mirroring:
à you must decide what you want to mirror/capture
(e.g. student registering for a class, a student
sneezing, …)
- information:
data (raw facts and figures without context) à information (data + context) à
knowledge (processing information in a more advanced way)
e.g. $122 à $122 is the price of Nike AirMax sneakers à Nike AirMax priced at $122 sell
better than other models, so we should stock more of them
---
input = ‘making the mirroring work’ = keeping the digital world in sync with the real
world, what happens in the real organization is reflected in the system
processing & output = turning raw data into information
- input:
how can we capture RW (real world) phenomena?
à human or technology e.g. checking a book in the library (real person vs. RFID tags)
but not everything can be captured e.g. if you read the book
input requires engineering:
‘mapping’ = translating what happens in the real world into corresponding digital
events in an information system so the system accurately reflects reality
e.g.
à mapping requires:
o a thorough understanding of the properties of the world = how things actually
work (e.g. how students use Toledo)
o a thorough understanding of the capabilities of technology = what the system
can detect, track or automate (e.g. Toledo can track clicks)
1
, o manipulating and exploiting those properties to achieve the purposes of the
information system = combining both to design the IS eWectively (e.g. a student
is active if they click something within 10 minutes)
---
• types of information systems
OPERATIONAL LEVEL IS: “daily task helper”
= focus on capturing data and providing operational data for daily operational decision
making
= focus on the day-to-day operations of a business, main purpose is to capture, store,
and provide data that employees need to make routine, short-term decisions
characteristics:
o processes: well structured, unambiguous, routinely
= they follow a clear and standard procedure every
time, there’s no confusion on how to do them
o decisions: short term, occur frequently, little
uncertainties = routine
o users: clerks, cashiers, sales assistants, etc.
o required information: easy to determine,
independent of individual, well structured, and from
within organization = info doesn’t depend on a
person’s judgement or interpretation
e.g. ERP (KU Loket)
MANAGEMENT LEVEL IS
= focus on processing, analysing and visualizing data data for management-level
decision making
characteristics:
o processes: less routinely
o decisions: mid/medium/long term, less often, more uncertainties/risks
o users: middle/top management
o required information: operational level + data warehouse, less easy to
determine, dependent of individual and moment, less well structured, need for
external information increases (e.g. sales trends)
e.g. Power BI, calculations at strategic level
AI-BASED DECISION SUPPORT
= use artificial intelligence to help make routine operational decisions by analysing
current and historical data and recommending or automating actions
o processes: routinely
2
, o decisions: operational
o Users: operational level – middle management
o required information: operational level + data warehouse (historical data)
e.g. credit scoring, recommendation
ADDITIONAL TYPES OF IS
- oWice automation systems (OAS)
= helps employees do daily oWice tasks faster using tools like email, word processors,
spreadsheets, and calendars (e.g. Microsoft OWice, Excel, Word, …)
- knowledge work systems (KWS)
= specialized systems for engineers, scientists, … to obtain new knowledge (e.g. CAD)
1.2 IS Strategy
business or IT strategy first? Henderson & Venkatraman’s Strategic Alignment Model
business strategy = plan that defines
how a company will achieve its goals and
compete in the market
IT strategy = plan that defines how
technology will be used to support the
business strategy and improve operations
strategic integration = integrate IT sand
business strategy
operational integration = aligning day-
to-day organisational processes with IS
(e.g. warehouse staW pack and ship orders à IS tracks inventory and alerts for
restocking)
BUT… requires a design layer for strategic fit and functional fit
functional fit
strategic fit
3
, o strategic fit
= design layer translates strategy to operations
= matching what a company wants to do (strategy) with how it actually works internally
in other words: “Can we actually deliver what our strategy promises?”
o functional fit
= aligning IT capabilities with business needs, making sure the IT system provides the
right information and tools the business needs to make decisions and run processes
eWectively
• 4 diWerent paths
strategic execution
o define your business strategy
o design your way of working
o define the information you need
o define the technology needed
technology transformation
o define your business strategy
o consider Digital Technology Opportunities
o design your way of working accordingly, with the technology in mind
competitive potential (e.g. insta, facebook, amazon)
o consider Digital Technology Opportunities
o define your business strategy
o design your business
= start from technology and define a business strategy making use of digital tech
e.g. dematerialization (replacing physical products with digital ones e.g. spotify)
servitization (shifting from selling products to oWering services)
datafication (turning processes into data streams that can be analysed and monetised
e.g. smart toothbrush)
service level
o consider Digital Technology Opportunities
o develop services
o oWer the services to other businesses
= develop platforms that oWer services that can be used by others (e.g. Microsoft)
• value chain
4
1.1 What is an IS?
the IS mirrors the real world to provide e(icient and convenient access to
information in the world
- mirroring:
à you must decide what you want to mirror/capture
(e.g. student registering for a class, a student
sneezing, …)
- information:
data (raw facts and figures without context) à information (data + context) à
knowledge (processing information in a more advanced way)
e.g. $122 à $122 is the price of Nike AirMax sneakers à Nike AirMax priced at $122 sell
better than other models, so we should stock more of them
---
input = ‘making the mirroring work’ = keeping the digital world in sync with the real
world, what happens in the real organization is reflected in the system
processing & output = turning raw data into information
- input:
how can we capture RW (real world) phenomena?
à human or technology e.g. checking a book in the library (real person vs. RFID tags)
but not everything can be captured e.g. if you read the book
input requires engineering:
‘mapping’ = translating what happens in the real world into corresponding digital
events in an information system so the system accurately reflects reality
e.g.
à mapping requires:
o a thorough understanding of the properties of the world = how things actually
work (e.g. how students use Toledo)
o a thorough understanding of the capabilities of technology = what the system
can detect, track or automate (e.g. Toledo can track clicks)
1
, o manipulating and exploiting those properties to achieve the purposes of the
information system = combining both to design the IS eWectively (e.g. a student
is active if they click something within 10 minutes)
---
• types of information systems
OPERATIONAL LEVEL IS: “daily task helper”
= focus on capturing data and providing operational data for daily operational decision
making
= focus on the day-to-day operations of a business, main purpose is to capture, store,
and provide data that employees need to make routine, short-term decisions
characteristics:
o processes: well structured, unambiguous, routinely
= they follow a clear and standard procedure every
time, there’s no confusion on how to do them
o decisions: short term, occur frequently, little
uncertainties = routine
o users: clerks, cashiers, sales assistants, etc.
o required information: easy to determine,
independent of individual, well structured, and from
within organization = info doesn’t depend on a
person’s judgement or interpretation
e.g. ERP (KU Loket)
MANAGEMENT LEVEL IS
= focus on processing, analysing and visualizing data data for management-level
decision making
characteristics:
o processes: less routinely
o decisions: mid/medium/long term, less often, more uncertainties/risks
o users: middle/top management
o required information: operational level + data warehouse, less easy to
determine, dependent of individual and moment, less well structured, need for
external information increases (e.g. sales trends)
e.g. Power BI, calculations at strategic level
AI-BASED DECISION SUPPORT
= use artificial intelligence to help make routine operational decisions by analysing
current and historical data and recommending or automating actions
o processes: routinely
2
, o decisions: operational
o Users: operational level – middle management
o required information: operational level + data warehouse (historical data)
e.g. credit scoring, recommendation
ADDITIONAL TYPES OF IS
- oWice automation systems (OAS)
= helps employees do daily oWice tasks faster using tools like email, word processors,
spreadsheets, and calendars (e.g. Microsoft OWice, Excel, Word, …)
- knowledge work systems (KWS)
= specialized systems for engineers, scientists, … to obtain new knowledge (e.g. CAD)
1.2 IS Strategy
business or IT strategy first? Henderson & Venkatraman’s Strategic Alignment Model
business strategy = plan that defines
how a company will achieve its goals and
compete in the market
IT strategy = plan that defines how
technology will be used to support the
business strategy and improve operations
strategic integration = integrate IT sand
business strategy
operational integration = aligning day-
to-day organisational processes with IS
(e.g. warehouse staW pack and ship orders à IS tracks inventory and alerts for
restocking)
BUT… requires a design layer for strategic fit and functional fit
functional fit
strategic fit
3
, o strategic fit
= design layer translates strategy to operations
= matching what a company wants to do (strategy) with how it actually works internally
in other words: “Can we actually deliver what our strategy promises?”
o functional fit
= aligning IT capabilities with business needs, making sure the IT system provides the
right information and tools the business needs to make decisions and run processes
eWectively
• 4 diWerent paths
strategic execution
o define your business strategy
o design your way of working
o define the information you need
o define the technology needed
technology transformation
o define your business strategy
o consider Digital Technology Opportunities
o design your way of working accordingly, with the technology in mind
competitive potential (e.g. insta, facebook, amazon)
o consider Digital Technology Opportunities
o define your business strategy
o design your business
= start from technology and define a business strategy making use of digital tech
e.g. dematerialization (replacing physical products with digital ones e.g. spotify)
servitization (shifting from selling products to oWering services)
datafication (turning processes into data streams that can be analysed and monetised
e.g. smart toothbrush)
service level
o consider Digital Technology Opportunities
o develop services
o oWer the services to other businesses
= develop platforms that oWer services that can be used by others (e.g. Microsoft)
• value chain
4
