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HousekeepingHousekeepingPower Point Demo?? – Thur or April 13Power Point Demo?? – Thur or April 13
Today – Chap 12Today – Chap 12 Thur – Share about chap 12 homeworkThur – Share about chap 12 homework Next Week – Spring BreakNext Week – Spring Break April 13 – Emerging TechnologyApril 13 – Emerging Technology April 15 – Long Boom ArticleApril 15 – Long Boom Article April 20April 20, 22 – Ethics Project Discussion, 22 – Ethics Project Discussion April 27 – No classApril 27 – No class April 29 – Prepare for FinalApril 29 – Prepare for Final May 4 - FinalMay 4 - Final
IT - The Organization IT - The Organization and the Individualand the Individual
Chapter 12Chapter 12
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Learning ObjectivesLearning Objectives Recognize the difficulties in managing Recognize the difficulties in managing
information resources.information resources. Recognize information systems’ Recognize information systems’
vulnerability and manage risk.vulnerability and manage risk. Identify the major aspects of the Identify the major aspects of the
economics of information technology.economics of information technology. Demonstrate how to define and measure Demonstrate how to define and measure
tangible information technology benefits.tangible information technology benefits. Show how to evaluate intangible Show how to evaluate intangible
information technology benefitsinformation technology benefits..
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• Identify several ways that information technologies have affected the job of managers in e-business companies.
• .Identify the seven major dimensions of the e-business organization and explain how they affect the success of e-business companies.
• Identify several cultural, political, and geoeconomic challenges that confront managers in the management of global e-business technologies.
Chapter Objectives
Evaluating TrendsEvaluating Trends
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Technology & OrganizationsTechnology & Organizations Impact of new technologies on organizations:Impact of new technologies on organizations:
• First, most organizations will perform existing functions First, most organizations will perform existing functions at decreasing costs over time and thus become more at decreasing costs over time and thus become more efficient.efficient.
• Second, creative organizations will find new uses for Second, creative organizations will find new uses for information technology—based on the improving price-information technology—based on the improving price-to-performance ratio—and thus become more to-performance ratio—and thus become more effective. effective.
• New and enhanced products and services will provide New and enhanced products and services will provide competitive advantage to organizations that have the competitive advantage to organizations that have the creativity to exploit the increasing power of creativity to exploit the increasing power of information technology. information technology.
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Trend --Trend --Information -> CollaborationInformation -> Collaboration
Today’s Internet focuses on access to and Today’s Internet focuses on access to and delivery of informationdelivery of information
Tomorrow’s Internet will support human Tomorrow’s Internet will support human collaboration in an information-rich collaboration in an information-rich environmentenvironment
The Internet is global, and is creating a The Internet is global, and is creating a global capability to build knowledge-based global capability to build knowledge-based communitiescommunities
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The Productivity ParadoxThe Productivity Paradox Over the last 50 years, organizations have Over the last 50 years, organizations have
invested trillions of dollars in information invested trillions of dollars in information technology.technology. • Total worldwide annual spending on IT in 2000 was two Total worldwide annual spending on IT in 2000 was two
trillion dollars, and is expected to be over three trillion trillion dollars, and is expected to be over three trillion dollars by 2004. dollars by 2004.
Yet it is very hard to demonstrate that IT Yet it is very hard to demonstrate that IT investments really have increased outputs or investments really have increased outputs or wages.wages.
The discrepancy between measures of The discrepancy between measures of investment in information technology and investment in information technology and measures of output at the national level is measures of output at the national level is described as the described as the PProductivity roductivity PParadoxaradox..
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ProductivityProductivity Economists define Economists define productivityproductivity as outputs as outputs
divided by inputs.divided by inputs. • Outputs are calculated by multiplying units produced, Outputs are calculated by multiplying units produced,
for example, number of automobiles, by their average for example, number of automobiles, by their average value.value.
If inputs are measured simply as hours of work, If inputs are measured simply as hours of work, the resulting ratio of outputs to inputs is the resulting ratio of outputs to inputs is labor labor productivityproductivity..
If other inputs—investments and materials—are If other inputs—investments and materials—are included, the ratio is known as included, the ratio is known as multifactor multifactor productivity.productivity.
Eleventh EditionJames A. O’Brien 10Introduction to Information Systems
Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
Managing e-Business Technologies
E-Business•Agility, Flexibility•Business Strategies•Supply Chain•Total Quality
Suppliers Business Partners
Customer Value•Responsiveness•Accountability•Lower costs
Information Technology Developments
•Global and enterprise computing; intranets•IT infrastructure
Eleventh EditionJames A. O’Brien 11Introduction to Information Systems
Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
Business QualityImprovement
Traditional Organization BusinessReengineering
E-OrganizationOrganization Structure
Target
Leadership
PotentialPayback
People andCulture
Risk
Coherence
What Changes?
Knowledge
Primary
Alliances
Incrementally ImprovingExisting ProcessesHierarchicalExisting Processes
Radically RedesigningBusiness SystemsHorizontal, networkedBusiness Systems
Any ProcessCentralized focus
Strategic BusinessProcesses
Everyone is a leader
Processes
10%-50% Improvements10%-50% Improvements 10-Fold Improvements10-Fold Improvements
LowLow HighHigh
Same Jobs - More EfficientSame Jobs - More Efficient Big Job Cuts; New Jobs;Major Job RedesignBig Job Cuts; New Jobs;Major Job RedesignIT and Work Simplification
IT and Organizational
Customer relevance
Institutional
Delegated authorityCollaboration rewarded
Governance
Internal relevance
Individualistic
Ally with distant partnersComplement current gaps
Top-down
Vertical decision makingIndividuals rewarded
Distributed
Ally with competitors, customers and suppliersCreate new value
The e-Business Organization
Eleventh EditionJames A. O’Brien 12Introduction to Information Systems
Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
Example of organizational structure of an e-business enterprise
Global ExecutiveCore
E-commerce Business Unit
Consumer ProductsBusiness Unit
Shared IT Support Services Business Unit
Shared AdministrativeSupport Services Business Unit
IndustrialProductsBusiness Unit
Financial Services Business Unit
Eleventh EditionJames A. O’Brien 13Introduction to Information Systems
Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
e-Business Technology Management
Managing the IT
Organization
Managinge-Business IT
Strategy
ManagingApplication
Development &Technology
e-BusinessTechnologyManagement
Eleventh EditionJames A. O’Brien 14Introduction to Information Systems
Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
Benefits Derived from Company IT Planning
• Reduced support costs• Reduced complexity• Expertise portability• Interoperability• Volume discounts• Reduced training costs• Information sharing
Eleventh EditionJames A. O’Brien 15Introduction to Information Systems
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Global e-Business Strategies
Transactional
-Virtual e-Businesses-World Markets-Transparent Manufacturing-Global Supply Chain-Global Alliances
International
-Autonomous operations-Region Specific-Vertical Integration-Specific Customers-Captive Manufacturing
Global
-Global Sourcing-Multiregional-Horizontal Integration-Some transparency of customers and production
Eleventh EditionJames A. O’Brien 16Introduction to Information Systems
Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
Business Drivers for Global e-Business
Global Customers
Global Products
Global Operations
Global Resources
Global Collaboration
Business Drivers for Globale-Business
Eleventh EditionJames A. O’Brien 17Introduction to Information Systems
Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
Global IT Platform Issues
Global Systems Development
•Local vs. Global Requirements•Multilingual Needs•Standardization of Data•Scheduling Global Activities
Global Infrastructure•Global Data Access•Regulated Access•Transborder Data Flows
Global Computing Facilities
•Hardware acquisitions•Import restrictions•Software compatibility•Local service•Balancing workloads•Lack of spare parts
Eleventh EditionJames A. O’Brien 18Introduction to Information Systems
Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Summary• e-Business technologies are changing the
distribution, relationships, resources, and responsibilities of managers.
• High-quality information system performance is dependent on extensive and meaningful management and user involvement in the governance and development of IT applications.
• The organizational structure and roles of e-business companies are undergoing major change as they strive to become customer-focused.
Eleventh EditionJames A. O’Brien 19Introduction to Information Systems
Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Summary (cont)
• Managing global e-business technologies includes:– Dealing with cultural, political, and geoeconomic
challenges posed by various countries. – Developing appropriate business and IT
strategies.– Developing a portfolio of global e-business and
e-commerce applications and an Internet-based technology platform to support them.