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7/28/2019 Networked Economy
1/31
1 - 1
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
The Transition to a
Networked Economy
7/28/2019 Networked Economy
2/31
1 - 2
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Our Changing World
Dependent on computer networks
LANs/Internet/World Wide Web
Moving toward heavy use of electronic
commerce
Relationships are changing at
the corporate level between companies and theircustomers, suppliers, and employees.
the individual level between friends, relatives, andcolleagues.
Moving from an industrial economy to a
networked economy
7/28/2019 Networked Economy
3/31
1 - 3
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Economic Waves
Hunter/Gatherer
Agricultural
Industrial
Knowledge-based
7/28/2019 Networked Economy
4/31
1 - 4
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
are the nervous system of modern companies
enable stakeholders to interact electronically
are the foundation of what we call the Internet and the
World Wide Web enable and facilitate electronic commerceboth B2C
and B2B
are the basis of a new type of economythe
networked economy
A Connected World:Computer Networks
7/28/2019 Networked Economy
5/31
1 - 5
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Trends in Use of E-commerce
7/28/2019 Networked Economy
6/31
1 - 6
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Networked economy
Enhanced, transformed, or new economicrelationships based on computer networksand human knowledge
Economic
relationships
Knowledge
7/28/2019 Networked Economy
7/31
1 - 7
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Stakeholder Relationships
TraditionalCustomers
Employees
Suppliers
NewCustomers as unpaid
employee
Electronic user groups
Employees as special
service representatives
Elements of the Networked Economy:
Economic Relationships
7/28/2019 Networked Economy
8/31
1 - 8
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Employee
ManagementEmployee
Customer Customer
Suppliers
Organization
Environment
Elements of the Networked Economy:
Economic Relationships
7/28/2019 Networked Economy
9/31
1 - 9
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Scarcity
Searching strategies
Transactions Communications
Information Storage
Differences between Industrial
and Networked Economy
iff i
7/28/2019 Networked Economy
10/31
1 - 10
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Differences between Industrial
and Networked Economy
DigitalAnalogInformation
storage
Many-to-manyOne-to-one, one-to-many
Communication
E-mail, Web,
electronic payments
Face-to-face, phone,
postal, checks, cards
Transactions
Web-basedPaper-based, inperson
Searchingstrategies
TimeLand, capitalScarcity
NetworkedEconomy
IndustrialEconomy
Areas of Change
7/28/2019 Networked Economy
11/31
1 - 11
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Example of Differences--
Purchasing Process1. Requirements
2. Acquisition
3. Ownership4. Retirement
7/28/2019 Networked Economy
12/31
1 - 12
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Purchasing a camera
Ownership process
Requirements
7/28/2019 Networked Economy
13/31
1 - 13
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Purchasing a camera
Ownership process
Requirements
Acquis i t ion
7/28/2019 Networked Economy
14/31
1 - 14
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Purchasing a camera
Ownership process
Requirements
Acquis i t ion
Ownersh ip
7/28/2019 Networked Economy
15/31
1 - 15
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Purchasing a camera
Ownership process
Requirements
Acquis i t ion
Ownersh ip
Retirement
Old vs. New
7/28/2019 Networked Economy
16/31
1 - 16
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Ten Ways the Rules are
Changing
1. Matter 6. Value
2. Space 7. Efficiency
3. Time 8. Markets
4. People 9. Transactions
5. Growth 10. Impulse
7/28/2019 Networked Economy
17/31
1 - 17
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Matter
It matters less!
Concrete and bricks vs bits and bytes
Value of Amazon.com vs Barnes & Noble
7/28/2019 Networked Economy
18/31
1 - 18
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Space
Distance is dead and boundaries no longer
exist!
Communications can take place instantlyover great distances
Competition is worldwide
No company is safe is its local market
7/28/2019 Networked Economy
19/31
1 - 19
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Time
Its disintegrating
Web year = a fraction of chronological
year Move fast or be left behind!
7/28/2019 Networked Economy
20/31
1 - 20
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
People
They are more important than ever
Customers
EmployeesSuppliers
Good ideas are hard to find and worth a
great deal Lock in good employees with stock
options
7/28/2019 Networked Economy
21/31
1 - 21
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Growth
Accelerated by the network
Network-enhanced word of mouth
First-mover advantage worth more
7/28/2019 Networked Economy
22/31
1 - 22
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Enhanced by network externalities
Metcalfs law
Value
7/28/2019 Networked Economy
23/31
1 - 23
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Efficiency
Buyers can deal directly with sellers
Old-time middlemen are being threatened
Being replaced by infomediaries
7/28/2019 Networked Economy
24/31
1 - 24
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Markets
Buyers are gaining dramatic new power
Sellers are finding new opportunities
Intelligent software helps buyers find thebest deal.
Businesses that offer unique services or
lower costs will flourish,
7/28/2019 Networked Economy
25/31
1 - 25
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Transactions
It's a one-on-one game.
Information is easier to customize than
hardware and customers will demandcustom products
Information portion of any good or service
is becoming a larger part of its total value.
7/28/2019 Networked Economy
26/31
1 - 26
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Impulse
Virtually any product is available
everywhere
No physical barriers between wanting andbuying
The processes for marketing, sales, and
fulfillment are merging.
7/28/2019 Networked Economy
27/31
1 - 27
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
Category Description ExamplesInternetCompanies
Companies that exist because of the Internet andthe Web.
Yahoo!Mindspring
NewApproaches
Companies that use the Web to carry out already-existing business activities in a new way.
Amazon.com,NetB@nk
Transformed Companies that have used the Web to creatively
destroy theirexisting business, transforming themselves into adifferent type of company or a company that hasdifferent business activities.
UPS,
EdmundsDell Computers
Adapting Companies that are trying to adapt by usingelectronic commerce for an existing business
activity.
Delta Airlines,Lands End
Hurt byElectronicCommerce
Companies that will be endangered by theintroduction of electronic commerce or are ignoringit.
Malls,Constructioncompanies
Affected Company Categories
7/28/2019 Networked Economy
28/31
1 - 28
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
What is infrastructure?
The underlying foundation or basicframework of a system or an organization.
Information Technology is theinfrastructure of the networked economy
ITconsists of chip-based technology and
communication networks.IT refers to all forms of technology used to
create, store, exchange, and use information inits various forms (http://whatis.com).
Elements of the Networked Economy: Computers
7/28/2019 Networked Economy
29/31
1 - 29
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
The Evolution of Information Systems
Data
Information
Knowledge
Wisdom
7/28/2019 Networked Economy
30/31
1 - 30
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
IT in Organizations: IS Functions and the IS
Cycle
Rememberingthe past
Handling the
presentPreparing for
the future
InformationData
Decisions
People
and
technology
7/28/2019 Networked Economy
31/31
1 - 31
Copyright 2001,
Harcourt College
Publishers
Our Changing
World
Changing the
Rules
Elements of
the Networked
Economy
Infrastructure
of the
Networked
Economy
Information
Technology in
Organizations
A Look Ahead
Review
IS can help reduce the three risks that businessesface:
Demand Riskrisk of lowered demand
IS can enable improved customer service. Efficiency Riskrisk of higher costs due to
inefficiencies
IS can allow more efficient handling of transactions. Innovation Riskrisk of failing to keep up with
competitors innovations
IR can be reduced through appropriate new uses of IT.
Using IS Functions to deal with Business Risks