Housekeeping Power Point Demo?? – Thur or April 13

1. HousekeepingPower Point Demo?? – Thur or April 13 • 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

2. IT - The Organization and the Individual Chapter 12

3. Learning Objectives • 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 how to evaluate intangible information technology benefits.

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 e-business companies. • Identify several cultural, political, and geoeconomic challenges that confront managers in the management of global e-business technologies.

5. Evaluating Trends

6. Technology & Organizations • 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 price-to-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.

7. 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 Trend --Information -> Collaboration

8. The Productivity Paradox • 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. • 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.

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

10. Information Technology Developments Customer Value E-Business • Responsiveness • Accountability • Lower costs • Agility, Flexibility • Business Strategies • Supply Chain • Total Quality • Global and enterprise computing; intranets • IT infrastructure Business Partners Suppliers Managing e-Business Technologies

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

12. Example of organizational structure of an e-business enterprise Consumer Products Business Unit E-commerce Business Unit Shared IT Support Services Business Unit Industrial Products Business Unit Global Executive Core Financial Services Business Unit Shared Administrative Support Services Business Unit

13. e-Business Technology Management e-Business Technology Management Managing e-Business IT Strategy Managing Application Development & Technology Managing the IT Organization

14. Benefits Derived from Company IT Planning • Reduced support costs • Reduced complexity • Expertise portability • Interoperability • Volume discounts • Reduced training costs • Information sharing

15. Transactional Global International -Virtual e-Businesses -World Markets -Transparent Manufacturing -Global Supply Chain -Global Alliances -Autonomous operations -Region Specific -Vertical Integration -Specific Customers -Captive Manufacturing -Global Sourcing -Multiregional -Horizontal Integration -Some transparency of customers and production Global e-Business Strategies

16. Business Drivers for Global e-Business Global Customers Global Products Global Operations Global Resources Global Collaboration Business Drivers for Global e-Business

17. 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 • Hardware acquisitions • Import restrictions • Software compatibility • Local service • Balancing workloads • Lack of spare parts Global IT Platform Issues

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 e-business companies are undergoing major change as they strive to become customer-focused.

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.