Housekeeping Power Point Demo Thur or

Housekeeping Power Point Demo? ? – Thur or April 13 n n n n n Today – Chap 12 Thur – Share about chap 12 homework Next Week – Spring Break April 13 – Emerging Technology April 15 – Long Boom Article April 20, 22 – Ethics Project Discussion April 27 – No class April 29 – Prepare for Final May 4 - Final 1

IT - The Organization and the Individual Chapter 12 2

Learning Objectives n n n Recognize the difficulties in managing information resources. Recognize information systems’ vulnerability and manage risk. Identify the major aspects of the economics of information technology. Demonstrate how to define and measure tangible information technology benefits. Show to evaluate intangible information technology benefits. 3

James A. O’Brien Introduction to Information Systems Eleventh Edition 4 Chapter Objectives • 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 ebusiness companies. • Identify several cultural, political, and geoeconomic challenges that confront managers in the management of global ebusiness technologies. Irwin/Mc. Graw-Hill Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

Evaluating Trends 5

Technology & Organizations n Impact of new technologies on organizations: • First, most organizations will perform existing functions at decreasing costs over time and thus become more efficient. • Second, creative organizations will find new uses for information technology—based on the improving priceto-performance ratio—and thus become more effective. • New and enhanced products and services will provide competitive advantage to organizations that have the creativity to exploit the increasing power of information technology. 6

Trend -Information -> Collaboration n Today’s Internet focuses on access to and delivery of information Tomorrow’s Internet will support human collaboration in an information-rich environment The Internet is global, and is creating a global capability to build knowledge-based communities 7

The Productivity Paradox n Over the last 50 years, organizations have invested trillions of dollars in information technology. • Total worldwide annual spending on IT in 2000 was two trillion dollars, and is expected to be over three trillion dollars by 2004. n n Yet it is very hard to demonstrate that IT investments really have increased outputs or wages. The discrepancy between measures of investment in information technology and measures of output at the national level is described as the Productivity Paradox. 8

Productivity n Economists define productivity as outputs divided by inputs. • Outputs are calculated by multiplying units produced, for example, number of automobiles, by their average value. n If inputs are measured simply as hours of work, the resulting ratio of outputs to inputs is labor productivity. n If other inputs—investments and materials—are included, the ratio is known as multifactor productivity. 9

Eleventh Edition Introduction to Information Systems James A. O’Brien 10 Managing e-Business Technologies Information Technology Developments Customer Value E-Business • Agility, Flexibility • Business Strategies • Supply Chain • Total Quality Suppliers Irwin/Mc. Graw-Hill • Global and enterprise computing; intranets • IT infrastructure • Responsiveness • Accountability • Lower costs Business Partners Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

James A. O’Brien Introduction to Information Systems Eleventh Edition 11 The e-Business Organization Structure Leadership People and Target Culture Business Quality Traditional Organization Improvement Hierarchical Business E-Organization Reengineering Horizontal, networked Incrementally Improving Existing Processes Centralized focus Radically Redesigning Business is a leader Business Systems Everyone Systems Any Process making Vertical decision Strategic Business Delegated authority Processes rewarded Processes Collaboration Individuals rewarded Potential Coherence 10%-50% Improvements Internal relevance 10 -Fold Improvements Customer relevance Knowledge Individualistic Low High Payback Risk Alliances Institutional Ally with distant partners Complement current gaps Ally with competitors, customers IT and Organizational and suppliers Create new value Big Job Cuts; New Jobs; Same Jobs - More Efficient What Changes? IT and Work Simplification Major Job Redesign Primary Major Job Redesign Governance Irwin/Mc. Graw-Hill Top-down Distributed Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

James A. O’Brien Introduction to Information Systems Eleventh Edition 12 Example of organizational structure of an e-business enterprise Consumer Products Business Unit E-commerce Business Unit Shared IT Support Services Business Unit Shared Administrative Support Services Business Unit Irwin/Mc. Graw-Hill Global Executive Core Industrial Products Business Unit Financial Services Business Unit Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

James A. O’Brien Eleventh Edition Introduction to Information Systems 13 e-Business Technology Management Managing e-Business IT Strategy Irwin/Mc. Graw-Hill Managing Application Development & Technology Managing the IT Organization Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

James A. O’Brien Introduction to Information Systems Eleventh Edition 14 Benefits Derived from Company IT Planning • • Reduced support costs Reduced complexity Expertise portability Interoperability Volume discounts Reduced training costs Information sharing Irwin/Mc. Graw-Hill Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

James A. O’Brien Introduction to Information Systems Eleventh Edition 15 Global e-Business Strategies International -Autonomous operations -Region Specific -Vertical Integration -Specific Customers -Captive Manufacturing Irwin/Mc. Graw-Hill Global -Global Sourcing -Multiregional -Horizontal Integration -Some transparency of customers and production Transactional -Virtual e-Businesses -World Markets -Transparent Manufacturing -Global Supply Chain -Global Alliances Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

Introduction to Information Systems James A. O’Brien Eleventh Edition 16 Business Drivers for Global e-Business Global Customers Global Products Global Operations Business Drivers for Global e-Business Irwin/Mc. Graw-Hill Global Resources Global Collaboration Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

James A. O’Brien Introduction to Information Systems Eleventh Edition 17 Global IT Platform Issues Global Infrastructure • Global Data Access • Regulated Access • Transborder Data Flows Global Systems Development Global Computing Facilities • Local vs. Global Requirements • Multilingual Needs • Standardization of Data • Scheduling Global Activities Irwin/Mc. Graw-Hill • Hardware acquisitions • Import restrictions • Software compatibility • Local service • Balancing workloads • Lack of spare parts Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

James A. O’Brien Introduction to Information Systems Eleventh Edition 18 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 ebusiness companies are undergoing major change as they strive to become customerfocused. Irwin/Mc. Graw-Hill Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.

James A. O’Brien Introduction to Information Systems Eleventh Edition 19 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. Irwin/Mc. Graw-Hill Copyright © 2002, The Mc. Graw-Hill Companies, Inc. All rights reserved.