Technology & Business

Business, Law, and Innovation

Technology & Business

Lecture 1Spring 2014

Professor Adam Dell

The University of Texas School of Law

- Economy at a macro level- Reason companies buy/ use technology- Rate of adoption- Technology inside companies

- Appendix:Brief HistoryBasic Vocabulary

What’s the Big Deal?

Economy at a Marco Level• Our economy is shifting from capital-based

economy to information-based economy

• Physical capital needs drop, as we move from tangible to intangible

• Cost of computing & communications decline the more prevalent they become

• Information KEY to COMPETITIVE EFFICIENCY

From the physical to digital

Adoption of Tech = Per Cap Income Growth

For the B School Students…

What is Capital Expenditure?

Who are the most efficient spenders?

Technology as a % of Capital Expenditures

Source: S&P's Research Insight

Every Functional Area of Business

• Technology Invasion• Every major business function addressed

• Communications (email, phone, fax, instant messaging)• Supply Chain (partners, suppliers, customers)• Procurement (RFQ, RFP)• Sales (lead management) • Customer Relationship (customer communications) • Marketing (email, SMS, social)• Accounting (Direct deposit, Excel)• HR (Applicant tracking, candidate profiling)

• No end in sight……

Why? Technology is a Corporate Arms Race

• Leading edge companies are leading edge users of technology

• Amazon (supply chain, RFID, logistics)• Dell (chatter, salesforce.com)

• Marginal competitive advantages

• Personalization (when you walk into a Macy’s they know it’s you)• Big data (Target knows you are pregnant)

• Companies cannot compete if they do not uses these tools.

• Salesman circa 1985

• Salesman circa 2013

Rate of Adoption: New Technologies

Marketing Automation

Complexity of Technology Enabled Enterprise

Small/Medium Business

Healthcare

FinancialServices

BroadcastTelcom

Federal/Public Sector

Resellers

VARs

CSRs

InsideSales

SystemIntegrators

Distributors

DistributorsOEMS

GlobalResellers

FieldService

IndependentHardware Vendors

(IHVs)

System &Technical

Integrators

VAR

Vertical Market Integrators

CorporateResellers

End Customers

Excess Inventory

PartsFinishedGoods

New Products

ServicesMainframe

CRM

ERP

Custom

SCM

Mail

XML

EDI

Web

Phone

Fax

Enterprise ProductLines Markets Channels CustomersSystems Mediums

Oh!…the woes!!!

The Implications • Lots of technologies

• Lots of systems to manage

• Lots of business processes deeply tied to IT• Ex. BP

• 200 different ERP solutions• 5 separate global deployments of SAP, none talk to each

other• Energy: 18 different ERP solutions

Let’s Step Back • How do companies buy technology?• It used to be that every 4 – 5 years:

• Evaluate new technologies• Assess ROI, cost & implications of rollout• Integrate, Migrate & Train• Deploy and Manage

– Until something better comes along WORTH going through whole painful process yet again….

– This accounts for the KLUDGE of corporate networks…

• Start with a simple architecture

Brief History of the Enterprise

• Then get ACCRETIVE

Brief History of the Enterprise

Today Companies Must Move Faster

But it’s no panacea…

Who can access my data?

Where is my data?

What if a rogue employee accidently deletes all my data? Did you back it up?

What if my cloud provider goes down?

What if I want to switch providers, how do I get my data back?

Another Kludge

InternetRadio

TV

Cable

50

0

20

40

60

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100

12019

22

1926

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1994

1998

N. A

mer

ican

Use

rs/ H

ouse

hold

s (M

M)

Years to reach 50MM users:====

Radio 38TV 13Cable 10Internet 5

Rate of Technology Adoption

Rate of Technology Adoption

A Brief History of Technology

Semiconductor Mainframe

Microprocessor Personal Computer

LAN

Local Area Network

LAN

LANLAN

Wide Area Network

WAN

A Brief History of Technology…contd.

University WANs

LAN

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ARPANET

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Internet

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Internet

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Internet

- Backbone for data transmission- Standards that enable easy data exchange- What else could we put on top of this thing?

- Voice (cell & telephones)- Applications (email, IM, ERP)

- Result: ONE NETWORK