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Chapter 1 Information Systems in Global Business Today 35

1.1 THE ROLE OF INFORMATION SYSTEMS IN
BUSINESS TODAY

I t’s not business as usual in America anymore, or the rest of the global
economy. In 2012, American businesses will spend over $540 billion on
information systems hardware, software, and telecommunications equip-
ment. In addition, they will spend another $650 billion on business and
management consulting and services—much of which involves redesign-
ing firms’ business operations to take advantage of these new technologies.
Figure 1.1 shows that between 1980 and 2011, private business investment in
information technology consisting of hardware, software, and communications
equipment grew from 32 percent to 52 percent of all invested capital.
As managers, most of you will work for firms that are intensively using
information systems and making large investments in information technol-
ogy. You will certainly want to know how to invest this money wisely. If
you make wise choices, your firm can outperform competitors. If you make
poor choices, you will be wasting valuable capital. This book is dedicated to
helping you make wise decisions about information technology and informa-
tion systems.

HOW INFORMATION SYSTEMS ARE TRANSFORMING

BUSINESS

You can see the results of this massive spending around you every day by
observing how people conduct business. More wireless cell phone accounts
were opened in 2012 than telephone landlines installed. Smartphones, texting,
e-mail, and online conferencing have all become essential tools of business.
One hundred twenty-two million people in the United States access the Internet
using mobile devices in 2012, which is half of the total Internet user population

FIGURE 1.1 INFORMATION TECHNOLOGY CAPITAL INVESTMENT

Information technology capital investment, defined as hardware, software, and communications
equipment, grew from 32 percent to 52 percent of all invested capital between 1980 and 2011.
Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 2012.

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