Chapter 1

CHAPTER 1 

Information Technology's Role in Business

1. Understanding Information Technology (IT) provides an advantage in business, and also very important to all students regardless of their area of expertise. 

• Information Technology's Impact on Business Operations

1. Information Technology plays a critical role in deploying enterprisewide initiatives by facilitating communication and increasing business intelligence. (In other words allowing people to communicate in newer ways.)

1. In order to understand IT's role in business you must learn how businesses function. A typical business operates by functional areas. 

• Functional areas are interdependent parts of a business. 

• Each functional area has a specific core business function. 

• Information Technology (IT) - is a field concerned with the use of technology in managing and processing information.

1. Does no guarantee business success and innovation, but is most useful when it leverages the talents of people. IT is only efficient if the right people know how to use and manage it effectively.

• Management Information Systems (MIS) - is a general name for the business function and academic discipline covering the application of people, technologies, and procedures--collectively information systems--to solve business problems.

1. MIS is a business function just as marketing, finance, operations, and human resources are business functions.

1. Accounting - provides quantitative information about the finances of the business including recording, measuring, and describing financial information. 

1. Finance - deals with the strategic financial issues associated with increasing the value of the business, while observing applicable laws and social responsibilities. 

1. Human Resources (HR) - includes the policies, plans, and procedures for the effective management of employees (human resources).

1. Sales - is the function of selling a good or service and focuses on increasing customer sales, which increases company revenues.

1. Marketing - is the process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the company's products. 

1. Operations Management (also called production management) - is the management of systems or processes that convert or transform resources (including human resources) into goods and services.

1. Management information systems (MIS) - is the academic discipline covering the application of people, technologies, and procedures--collectively called information systems--to solve problems. 

It is important to distinguish between data, information, business intelligence.

• Data - are raw facts that describe the characteristics of an event.

• Information - is data converted into a meaningful and useful context.

• Business Intelligence - refers to applications and technologies that are used to gather, provide access to, and analyze data and information to support decision -making efforts.

1. The plans and goals of the IT department must align wit the plans and goals of the organization.

• Three Key Resources: (in order of priority)

1. People use.

1. information technology to work with

1. information

• ^^^ are inextricably linked. If one fails they all fail. Also if one fails, then chances are the business will               fail.

• Organizational Information Cultures

1. Information-Functional Culture - Employees use information as a means of exercising influence or power over others.

1. Information-Sharing Culture - Employees across departments trust each other to sue information (especially about problems and failures) to improve performance.

1. Information-Inquiring Culture - Employees across departments search for information to better understand the future and align themselves with current trends and new directions.

1. Information-Discovery Culture - Employees across departments are open to new insights about crises and radical changes and seek ways to create competitive advantages.

Information Technology Basics

Common Departments in an Organization 
Functional Areas of Business
Data, Information, and Business Intelligence

IT Resources
IT Cultures
It culture plays a large role in determining how successful it will share information.