Chapter 1 Information Technology For Management 4 th Edition Turban, McLean, Wetherbe Lecture Slides by A. Lekacos, Stony Brook University John Wiley & Sons, Inc. Information Technology in the Digital Economy
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Chapter 1
Information Technology For Management 4th Edition
Turban, McLean, WetherbeLecture Slides by A. Lekacos, Stony Brook University
John Wiley & Sons, Inc.
Information Technology in the
Digital Economy
Chapter 1 2
Chapter Objectives
Describe the characteristics of the digital economy and e-business.
Recognize the relationships between business pressures, organizational responses, and information systems.
Identify the major pressures in the business environment and describe the major organizational responses to them.
Define computer-based information systems and information technology.
Describe the role of information technology in supporting the functional areas, public services and specific industries
List the new technology development in the areas of generic and networked computing and Web-based systems.
Understand the importance of learning about information technology.
Chapter 1 3
Digital Economy – “New” Economy
E-Business: The use of electronic technologies to transact business.
Collaboration: People and Organizations interact, communicate, collaborate and search for information
Information Exchange: Storing, processing and transmission of information.
Chapter 1 4
Digital Business
Your Domain/ URL
I nt er net
POS
Appliance
Server
Store 3
PCThin Client
Appliance
On-line Multi-station Store
Net
Appliance
Store 1
On-line
Single-station Store
On-line Customers
Consumer & Business
Commercial
E-commerce
Hub
AccountingPhone OrdersMail Orders
Order Fulfillment
STARS
Thin Client
Thin Client
In-house operations
PCPC
PC
Purchasing
On-line
Salesperson
Linux Credit Card Approval
Apache Server
Cold Fusion
Sybase ASE Database
Linux SSL
Apache Server
Beacon Hill's Stars
Tarentella
SCO UnixLinuxUni x
Busi ness t o Busi ness
Server
E-Commerce Server
Wind ows 2 0 0 0
Of f i ce Sui t e
Vi d eo Conf erenci ng
Server
IP Ad d r ess 1
IP Ad d r ess 2
IP Ad d r ess 3
STARS
Networks
Internet
Telecommunications
ConsumerIn-office
Field Sales
Chapter 1 5
The Old Economy – Taking Photo’s
1. Buy film in a store
2. Load your camera
3. Take pictures
4. Take roll of film to store for processing
5. Pickup the film when ready
6. Select specific photos for enlargement
7. Mail to family and friends
Chapter 1 6
The New Economy – Taking Photo’s
1st Generation Digital Photography
Old economy except 6 and 7 were replaced by using a scanner and emailing
2nd Generation Digital Photography
Use a Digital Camera, no film, no processing.
3rd Generation Digital Photography
Your Digital Camera is now your mobile phone, in your binoculars or a palmtop
computer.
Chapter 1 7
Business Models
A business model is a method of doing business by which a company can generate revenue to sustain itself. The model spells out how the company adds value to create a product or service. (Value Chain) Nokia makes and sells cell phones
A TV station provides free broadcasting. Its survival depends on a complex model involving advertisers and content providers.
Internet portals, such as Yahoo, also use a complex business model.
Chapter 1 8
Digital Age Business Models
Name-Your-Own Price
Reverse Auctions
Affiliate Marketing
E-Marketplaces and Exchanges
Electronic aggregation (buying
groups)
Chapter 1 9
Drivers Forcing Changes In Business
Models
Environmental, organizational, and technological factors are creating a highly competitive business environment these factors or forces can change quickly, sometimes in an unpredictable manner.
Therefore, 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.
Business Pressures
Business Critical Response Activities
Chapter 1 10
The Drivers of change
Business Pressures on an Organization that force change.
Market
Technology
Society
Chapter 1 11
The Drivers of change Continued
Business Pressures on an Organization.
MarketSociety
Technology
Chapter 1 12
Organizational Response to these
Drivers
Strategic Systems
Continuous Improvement – Operational Efficiency
Restructuring business processes
Manufacturer to order
Customer Focus Strategy
Employ E-business tools
Business Alliances
Technology is required to effectively implement these critical responses.
Chapter 1 13
Information System
An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose. Like any other system, an information system includes inputs (data, instructions) and outputs (reports, calculations). It processes the inputs by using technology such as PCs and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation.
Chapter 1 14
Information System Is A System
Chapter 1 15
Computer Based Information System
Hardware
Software
Data
Network
Procedures
People
Hardware
Software
People
DataApplication
More than hardware and software
Chapter 1 16
Applications and Operations
Retail operations
Wholesale
Manufacturing
Human Resources
Marketing
Content management
…
Chapter 1 17
Information Systems
Functional Perspective
Marketing
Identify customers
Determine what they want
Planning products
Advertising and promoting products
Determine prices for products
Chapter 1 18
Information Systems
Functional Perspective
Sales
Contact customers
Sell the product
Take the order
Follow-up on the sale
5 year sales forecast
Chapter 1 19
Information Systems
Functional Perspective
Manufacturing
Control Equipment and machinery
Design new products
When and quantity of products to produce
New production facilities
Generate the work order
Chapter 1 20
Information Systems
Functional Perspective
Purchasing
Which vendors
Quantity to purchase
Coop, rebate tracking
Handle delivery discrepancies
Generate the purchase order
Chapter 1 21
Information Systems
Functional Perspective
Finance
Financial Assets
Investment management
Banking
Long term budgets
Chapter 1 22
Information Systems
Functional Perspective
Accounting
Accounts Receivable
Disbursements
Payroll
Depreciation
Earned Coop and Rebates
Chapter 1 23
Information Systems
Functional Perspective
Human Resources Employee wages, salaries & benefits
Long term labor requirements
Tracking vacation, sick,
Track employee skills
Interview and review employees
Chapter 1 24
Trends in Technology
Cost-performance ratio of chips keeps improving. Moore’s Law, his prediction was that the processing power of silicon chips would double every 18 months.
According to McGarvey & tenornetworks.com, states that the performance of optical communication networks is growing by a factor of 10 every three years
Several new devices and methods to increase storage capacity price performance
Object technology enables the development of self-contained units of software that can be shared
Networked and distributed computing is emerging rapidly Metcalfe’s Law.
Chapter 1 25
Trends in Technology (continued)
Internet
Mobile Computing and M-Commerce
Wireless networks
Pervasive Computing
Smart Devices
Chapter 1 26
Trends in Technology (continued)
The Network Computer
Optical Networks
Storage Area Networks
Intranets & Extranets
The Internet
The Networked Enterprise
Chapter 1 27
Why Study Information Systems?
You will be more effective in your chosen career if you understand how successful information systems are built, used, and managed.
You also will be more effective if you know how to recognize and avoid unsuccessful systems and failures.
Developing “Computer” Literacy will only enhance your “Information” Literacy
Chapter 1 28
The Outline
Chapter 1 29
MANAGERIAL ISSUES Recognizing opportunities for using IT and Web-based systems.
Who will build, operate, and maintain the information systems. This is a critical issue because management wants to minimize the cost of IT while maximizing its benefits. Some alternatives are to outsource portions, or even all, of the IT activities, and to divide the remaining work between the IS department and the end users.
How much IT? This is a critical issue related to IT planning. IT does not come free, but not having it may be much costlier.
How important is IT? In some cases, IT is the only approach that can help organizations. As time passes, the comparative advantage of IT increases.
Is the situation going to change? Yes, the pressures will be stronger as time passes. Therefore, the IT role will be even more important.
Globalization. Global competition will have an impact on many companies. However, globalization opens many opportunities, ranging from selling and buying products and services online in foreign markets, to conducting joint ventures or investing in them. IT supports communications, collaboration, and discovery of information regarding all the above.
Chapter 1 30
MANAGERIAL ISSUES Continued
Ethics and social issues. The implementation of IT involves many ethical and social issues that are constantly changing due to new developments in technologies and environments. These topics should be examined any time an IT project is undertaken.
Transforming the organization to the digital economy. The transformation can be done on several fronts. Management should study the opportunities, consider alternatives and prioritize them.
Chapter 1 31
Chapter 1
Copyright © 2004 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.
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