Prepared by: Jan Wong

ManagingInformation

Systemsin Organizations

DIGITALECONOMY

The Learning Outcomes

At the end of this session you should be able to:

The characteristics of the digital economy and e-business

The role of I.T. in supporting the functional areas across industries

The major pressures in the business environment and their responses

DESCRIBE

IDENTIFY

DESCRIBE

Getting started…

KEYWORDSDigital Economy

E-BusinessCollaborationInfo Exchange

The use of electronic technologies to transact business.

People and Organizations interact, communicate, collaborate and search for information

Storing, processing and transmission of information.

The “New” Economy

DIGITAL ECONOMY?THE INTERNET

OLD VS NEW ECONOMYTaking Photos the OLD way…

Purchase film → Load into camera → Take pictures → Process Film → Pickup Pictures → Keep in Album / Share with Family and Friends

OLD VS NEW ECONOMY

Taking Photos the NEW way…

1st Generation → Sharing can now be done via email

2nd Generation → Use of digital camera – without film

3rd Generation → Integrated into mobile devices, instant sharing, etc

BUSINESS

• It tells how a company adds value to create a product or service (value chain)

• Examples: Nokia – manufactures and sells mobile phones TV Stations – depends on advertisers and content providers Search engines – advertisers and other value added

services

• How about: Dell? Facebook? Ebay?

MODEL“method of doing business by which a company can generate revenue to sustain itself”

DIGITAL AGE BUSINESS MODELS

• Name-Your-Own-Price Consumer sets the price, the system tries to match with sellers

• Reverse Auctions Lowest, best offered deal wins (tendering)

• Affiliate Marketing Commission basis

• E-Marketplaces and Exchanges Buying and selling electronically

• Electronic Aggregation (group purchasing) Higher the quantity, lower the price (B2B)

BUSINESS PRESSURES• Environmental, organizational, and technological factors are creating a highly competitive business environment• These factors or forces can change quickly, sometimes in an unpredictable manner.

BUSINESS CRITICAL RESPONSE ACTIVITIES

• Companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment• A response can be a reaction to a pressure already in existence, an initiative intended to defend an organization against future pressures, or an activity that exploits an opportunity created by changing conditions

What forces change?3 DRIVERS OF CHANGEMarket Technology Society

What forces change?3 DRIVERS OF CHANGE

Market

Technology

Society

Organizational Response

5 WAYS to RESPOND

1. E-Commerce

2. Business Alliances

3. Continuous Improvements

4. Strategic Systems

5. Business Process Reengineering

THINGS TO TAKE NOTE

• Understand how is the Digital Economy different from the old

• Know the importance of a business model

• Understand why organizations have to change

• Know what are the 3 drivers of change

• Understand what are business pressures

• Know what are the 5 ways organizations can respond with

D I G I T A L E C O N O M Y

C o m i n g s o o n … n e x t c l a s sManagementInformation

Systemsin Organizations

I.T: CONCEPTS& MANAGEMENT

what are information systems? how are they all different?

IT’S TIME FOR SOME DISCUSSIONS!

• Discuss the motivation for becoming an e-business

• How IT made a difference in the old economy?

• How does the internet enables new business models?

• Explain why IT is a business pressure and also an enabler of response activities that counter business pressures

• Why do some information systems fail?

• Why mass customization is desirable?