ITM 100 All Notes for Final Exam Foundation of Information Systems
2025-2026 Toronto Metropolitan University
ITM100
Chapter One
Information Systems in Business Today
What’s New in Management Information Systems
- There are continuous changes in technology, management, and business processes:
- IT innovations:
- Cloud computing, mobile digital platforms, big data, AI, the internet of things (IoT)
- New business models:
- Viewers are unplugging from cable and using only the internet for entertainment
- E-Commerce expanding:
- Selling services, not only goods
- Management changes:
- Online collaboration, business intelligence, virtual meetings
- Changes in firms and organizations:
- More collaborative, social media to listen to consumers, more aware of technologies
Globalization Challenges & Opportunities
- Globalization: Internet and global communications have greatly changed how and where
business is done
- Internet has drastically reduced costs of operating on a global scale
- Increases foreign trade, outsourcing
- Competition for jobs, markets, resources, ideas
- Growing interdependence of global economies
- Requires new understandings of markets and opportunities
The Emerging Digital Firm
- Digital firm: a firm in which nearly all of the organization’s significant business relationships with
customers, suppliers, and employees are digitally enabled and mediated
- In a fully digital firm:
- Significant business relationships are digitally enabled and mediated
- Core business processes are accomplished through digital networks
- Key corporate assets are managed digitally
- Digital firms offer greater flexibility in organization and management, examples include time
, shifting and space shifting
- Business processes: the set of logically related tasks and behaviours that organizations develop
overtime 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 employee are examples of business processes
- The way organizations accomplish their business processes can be a source of
competitive strength
- Key corporate assets-intellectual property, core competencies, and financial and human
assets-are managed through digital means
Strategic Business Objectives of Information Systems
- There is a growing interdependence between
the ability to use informational technology and the
ability to implement corporate strategies and
achieve corporate goals
- Firms invest heavily in information systems to
, achieve six strategic business objectives:
- Operational excellence
- New products, services, and business models
- Customer and supplier intimacy
- Improved decision making
- Competitive advantage
- Survival
The Role of Information Systems in Business Today
- Operational excellence improves efficiency to attain higher profitability
- Information systems and technologies are the most important tools to achieve greater
productivity
- Information systems are a major enabling tool to create new products, new services, and
entirely new business models
- Business model: how a company produces, delivers, and sells a product or service to
create wealth
- Serving customers well leads to customers returning, raising revenues and profits, building
customer intimacy
- Intimacy with suppliers results in lower costs and allows them to provide vital inputs
- When managers do not have the right information at the right time, they make decisions
relying on forecasts, best guesses, and luck
- This results in misallocation of resources and poor response time
- Competitive advantage includes:
- Delivering better performance
- Charging less for superior products
- Responding to customers and suppliers in real time
- Competitive advantage often results from achieving previous business objectives
- 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
- Most nations have statutes and regulations that create a legal duty for companies
What is an Information System?
- Information technology: consists of all of the hardware and software that a firm needs to use in
order to achieve its business objectives
- Information system: a set of interrelated components that collect, process, store, and
distribute information to support decision making and control in an organization
- Information systems may also help managers and workers analyze problems, visualize
complex subjects, and create new products
- Information: data that have been shared into a form that is meaningful and useful to human beings
- Data: 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
Functions of an Information System
, Dimensions of Information Systems
- Information systems literacy: a broader understanding of the management and organizational
dimensions of systems as well as the technical dimensions of systems
- Computer literacy: the knowledge of information
technology
- Management information systems: MIS deals with
behavioural issues as well as technical issues
surrounding the development, use, and impact of
information systems used by managers and
employees in the firm
- Organization:
- Hierarchy of authority, responsibility; separation
of business functions; unique business processes;
unique business culture; organizational politics
- Senior management makes long-range
strategic decisions about products and services
as well as ensures financial performance of the
firm
- Middle management carries out the programs
and plans of senior management
- Operational management is responsible for
monitoring the daily activities of the business
- Knowledge workers design products or services and create new knowledge for the firm
- Data workers assist with scheduling and communications at all levels of the firm
- Production or service workers actually produce the product and deliver the service
- The major business functions consist of sales and marketing, manufacturing and
production, finance and accounting, and human resources
- Management:
- Managers set organizational strategy and must act creatively
- Creation of new products and services
- Occasionally re-creating the organization
- Technology:
- Information technology infrastructure: provides the foundation on which the firm can build its
specific information systems
- Data management technology: consists of the software governing the organization of data
on physical storage media
- Networking and telecommunications technology: consists of the software governing the
organization of data on physical storage media
- Computer hardware: the physical equipment used for input, processing, and output
activities in an information system
- Computer software: consists of the detailed, preprogrammed instructions that control and
coordinate the computer hardware components in an information system
A Business Perspective on Information Systems
- Investments in information technology will result in superior returns
- Managers and business firms invest in information technology and systems because they
provide real economic value to the business
- The decision to build or maintain an information system assumes that the returns on this
investment will be superior to the other investments in buildings, machines, or other assets
2025-2026 Toronto Metropolitan University
ITM100
Chapter One
Information Systems in Business Today
What’s New in Management Information Systems
- There are continuous changes in technology, management, and business processes:
- IT innovations:
- Cloud computing, mobile digital platforms, big data, AI, the internet of things (IoT)
- New business models:
- Viewers are unplugging from cable and using only the internet for entertainment
- E-Commerce expanding:
- Selling services, not only goods
- Management changes:
- Online collaboration, business intelligence, virtual meetings
- Changes in firms and organizations:
- More collaborative, social media to listen to consumers, more aware of technologies
Globalization Challenges & Opportunities
- Globalization: Internet and global communications have greatly changed how and where
business is done
- Internet has drastically reduced costs of operating on a global scale
- Increases foreign trade, outsourcing
- Competition for jobs, markets, resources, ideas
- Growing interdependence of global economies
- Requires new understandings of markets and opportunities
The Emerging Digital Firm
- Digital firm: a firm in which nearly all of the organization’s significant business relationships with
customers, suppliers, and employees are digitally enabled and mediated
- In a fully digital firm:
- Significant business relationships are digitally enabled and mediated
- Core business processes are accomplished through digital networks
- Key corporate assets are managed digitally
- Digital firms offer greater flexibility in organization and management, examples include time
, shifting and space shifting
- Business processes: the set of logically related tasks and behaviours that organizations develop
overtime 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 employee are examples of business processes
- The way organizations accomplish their business processes can be a source of
competitive strength
- Key corporate assets-intellectual property, core competencies, and financial and human
assets-are managed through digital means
Strategic Business Objectives of Information Systems
- There is a growing interdependence between
the ability to use informational technology and the
ability to implement corporate strategies and
achieve corporate goals
- Firms invest heavily in information systems to
, achieve six strategic business objectives:
- Operational excellence
- New products, services, and business models
- Customer and supplier intimacy
- Improved decision making
- Competitive advantage
- Survival
The Role of Information Systems in Business Today
- Operational excellence improves efficiency to attain higher profitability
- Information systems and technologies are the most important tools to achieve greater
productivity
- Information systems are a major enabling tool to create new products, new services, and
entirely new business models
- Business model: how a company produces, delivers, and sells a product or service to
create wealth
- Serving customers well leads to customers returning, raising revenues and profits, building
customer intimacy
- Intimacy with suppliers results in lower costs and allows them to provide vital inputs
- When managers do not have the right information at the right time, they make decisions
relying on forecasts, best guesses, and luck
- This results in misallocation of resources and poor response time
- Competitive advantage includes:
- Delivering better performance
- Charging less for superior products
- Responding to customers and suppliers in real time
- Competitive advantage often results from achieving previous business objectives
- 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
- Most nations have statutes and regulations that create a legal duty for companies
What is an Information System?
- Information technology: consists of all of the hardware and software that a firm needs to use in
order to achieve its business objectives
- Information system: a set of interrelated components that collect, process, store, and
distribute information to support decision making and control in an organization
- Information systems may also help managers and workers analyze problems, visualize
complex subjects, and create new products
- Information: data that have been shared into a form that is meaningful and useful to human beings
- Data: 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
Functions of an Information System
, Dimensions of Information Systems
- Information systems literacy: a broader understanding of the management and organizational
dimensions of systems as well as the technical dimensions of systems
- Computer literacy: the knowledge of information
technology
- Management information systems: MIS deals with
behavioural issues as well as technical issues
surrounding the development, use, and impact of
information systems used by managers and
employees in the firm
- Organization:
- Hierarchy of authority, responsibility; separation
of business functions; unique business processes;
unique business culture; organizational politics
- Senior management makes long-range
strategic decisions about products and services
as well as ensures financial performance of the
firm
- Middle management carries out the programs
and plans of senior management
- Operational management is responsible for
monitoring the daily activities of the business
- Knowledge workers design products or services and create new knowledge for the firm
- Data workers assist with scheduling and communications at all levels of the firm
- Production or service workers actually produce the product and deliver the service
- The major business functions consist of sales and marketing, manufacturing and
production, finance and accounting, and human resources
- Management:
- Managers set organizational strategy and must act creatively
- Creation of new products and services
- Occasionally re-creating the organization
- Technology:
- Information technology infrastructure: provides the foundation on which the firm can build its
specific information systems
- Data management technology: consists of the software governing the organization of data
on physical storage media
- Networking and telecommunications technology: consists of the software governing the
organization of data on physical storage media
- Computer hardware: the physical equipment used for input, processing, and output
activities in an information system
- Computer software: consists of the detailed, preprogrammed instructions that control and
coordinate the computer hardware components in an information system
A Business Perspective on Information Systems
- Investments in information technology will result in superior returns
- Managers and business firms invest in information technology and systems because they
provide real economic value to the business
- The decision to build or maintain an information system assumes that the returns on this
investment will be superior to the other investments in buildings, machines, or other assets
