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Welcome to the first episode of our video lecture series on the fundamentals of Management Information Systems. Today, we will broadly discuss this discipline and examine three related topics: first, the concept of digital transformation; second, what constitutes an information system; and finally, the topics that Management Information Systems deals with. Why is this topic actually relevant to you in your business studies? 
Let's take a look at global IT expenditures. Here we can clearly identify an increasing trend and a sharp rise in spending around the beginning of the coronavirus pandemic. Additionally, it is evident that these expenditures do not return to their original levels. Now let's consider the press review, where the topic of digitization is frequently discussed, official channels are expected to become even more digitized in the future, technology is being integrated into homes through smart home applications, and digitization is creating growth, new added values, and new jobs. Also, according to the latest report from the President of the Austrian Computer Society, it is important to address this issue. Therefore, we see that this is a ubiquitous topic that has become deeply embedded in our society. Nowadays, we can book and share our cars via a platform, listen to music via a streaming service, and equip our homes relatively easily with smart technology. And for this reason, the first point we are going to discuss here is digital transformation. 
Initially, we will look at a definition of the term, then discuss the three dimensions of digitization, and finally examine the challenges and questions that are particularly relevant in the context of digitization in business and society. Let's take a look at the definition of digitization according to Leimeister. So, what is meant by digitization? We can see that digitization is understood here as the changes and their outcomes in all parts of human society that arise from the increased use of digital technologies. Coming from this definition, we can now look at the three dimensions of digitization according to Leimeister: with the external focus, with the internal focus, and the outcome - specifically, the outcome as a smart product or service - that together shape digital business.
The first dimension, the internal focus, is represented on the x-axis. It concerns digital processes within and between companies, which are also supported by information systems. These are primarily processes that take place in the background. Backstage processes can be supported and transformed through digitization. This is particularly a core area in German-speaking Management Information Systems, especially in process management and business process management, which we will discuss in more detail later. An example of this would simply be support through an ERP system, or Enterprise Resource Planning system. Such an information system can now support business processes within a company. This is the first dimension: the internal focus, which includes backstage processes—those that occur within and between companies. 
Moving on to the second dimension, the external focus, this primarily involves the customer interface and the design of offerings tailored to the needs of users. In the frontstage, we take into account the needs and requirements of customers, with a focus on user and usage orientation. As illustrated in the example image, product configurations are specifically tailored to the customer, and these configuration systems offer a means of personalization. This is the second dimension: the external focus. 
And when we move on to the third dimension, the z-axis, which represents the smart product or service, we address a new aspect of digitalization related to the outcome of performance. So, what does this entail? Consider the example with Lego: a child playing with Lego bricks might use a traditional instruction manual. However, digitalization expands this experience. By using a mobile device and scanning a QR code, the child can access additional interactive features. This could involve using an iPad to control a mission and assemble the toy as part of that mission, thereby enriching the overall play experience. This relates to the concept of 'second screening,' where the Lego set is enhanced with additional features. Therefore, the emphasis here is on how digitalization enables the expansion and augmentation of a product or service that already exists in its analog form.
So, to summarize, the three dimensions – external focus, internal focus, and the outcome – define what we call 'Digital Business.' This, of course, provides companies with opportunities to think within these dimensions and develop strategies, whether focusing on a single dimension or positioning across all of them. Digitalization, and the opportunities it brings, transforms business models, offers new ways to create and implement them, and changes the value creation of products and services. 
Next, we will look at the challenges and issues of digitalization. There are certain buzzwords that frequently appear in the media and are widely used. One example of these buzzwords, when we take a closer look, is 'Cloud Computing.' Many services, when outsourced, involve data processing being handled in service data centers. This presents both a challenge and a potential new business model—one that is actively being pursued. Similarly, the 'Internet of Things'—whether it's your 'smart' refrigerator at home or your networked intelligent components in the household—brings new opportunities as well as new challenges that need to be addressed. Likewise, the vast amounts of data generated—often referred to as 'Big Data'—must be managed, processed, and, most importantly, analyzed, as they can provide valuable insights for making better forecasts. 
The next topic is IT security, which is becoming ever more relevant as cybercrime grows more pervasive and significant. We need to deal with this issue and ask: Are our data secure? Are they securely stored? What should I do in the case of a cyberattack or data loss? All these questions need to be resolved. Another important issue currently receiving a lot of media attention is artificial intelligence. AI agents that assist us with decisions, such as handling personal vacation bookings in the future or supporting decision-making in business, hold significant potential but also pose risks. And of course, we must confront and solve these challenges. Additionally, 'Augmented Reality' and 'Virtual Reality' are topics that involve the expansion of the visual environment and its integration into the workplace. These technologies offer significant potential and open up many new possibilities. The question is: How will the environment change as a result? Another example is the new concept of 'Blockchain,' which could, and likely will, transform the banking sector and the way we manage transactions in the long term. Of course, there are challenges and questions that need to be resolved as well. Finally, the issues of sustainability and ethical computing, including 'Ethical Computing' and 'Sustainable Computing,' are important areas that require ongoing discussion. We need to address how we manage data and operate data centers in a sustainable manner. Both energy and data are valuable resources, so we must ensure they are used sustainably and ethically.