chapter 11 it support of organizational performance
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Chapter 1Chapter 1 11
Chapter 1Chapter 1
IT Support of Organizational Performance
Chapter 1Chapter 1 22
Learning ObjectivesLearning Objectives
Describe the digital economy and digital Describe the digital economy and digital enterprisesenterprises
Recognize the relationship between Recognize the relationship between performance, organizational pressures, and performance, organizational pressures, and responses and technologyresponses and technology
Define IS and ITDefine IS and IT
Understand what the adaptive enterprise isUnderstand what the adaptive enterprise is
Chapter 1Chapter 1 33
Learning Objectives (Continued)Learning Objectives (Continued)
Understand the support role that IS and IT play Understand the support role that IS and IT play in the organizationin the organization
Understand the importance of learning about ITUnderstand the importance of learning about IT
Chapter 1Chapter 1 44
Digital Economy –Digital Economy – “New” Economy“New” Economy
E-Business:E-Business: The use of electronic technologies to The use of electronic technologies to transact businesstransact business
Collaboration:Collaboration: People and Organizations interact, People and Organizations interact, communicate, collaborate, and search for informationcommunicate, collaborate, and search for information
Information Exchange:Information Exchange: Storing, processing and Storing, processing and transmission of informationtransmission of information
Chapter 1Chapter 1 55
Digital BusinessDigital Business
Chapter 1Chapter 1 66
The Old Economy –The Old Economy – Taking Photo’sTaking Photo’s
1.1. Buy film in a storeBuy film in a store
2.2. Load your cameraLoad your camera
3.3. Take picturesTake pictures
4.4. Take roll of film to store for processingTake roll of film to store for processing
5.5. Pickup the film when readyPickup the film when ready
6.6. Select specific photos for enlargementSelect specific photos for enlargement
7.7. Mail to family and friendsMail to family and friends
Chapter 1Chapter 1 77
The New EconomyThe New Economy – – Taking Photo’sTaking Photo’s
11stst Generation Digital Photography Generation Digital Photography Old economy (except 6 and 7) were replaced by Old economy (except 6 and 7) were replaced by
using a scanner and emailingusing a scanner and emailing
22ndnd Generation Digital Photography Generation Digital Photography Use a Digital Camera, no film, no processingUse a Digital Camera, no film, no processing
33rdrd Generation Digital Photography Generation Digital Photography Your Digital Camera is now in your mobile phone, Your Digital Camera is now in your mobile phone,
your binoculars, or palmtop computer.your binoculars, or palmtop computer.
Chapter 1Chapter 1 88
Business ModelsBusiness Models
A A business modelbusiness model is a method of doing business by is a method of doing business by which a company can generate revenue to sustain itself. which a company can generate revenue to sustain itself. The model spells out how the company adds value to The model spells out how the company adds value to create a product or service. (create a product or service. (Value ChainValue Chain))
Nokia makes and sells cell phonesNokia makes and sells cell phones A TV station provides free broadcasting. Its survival depends A TV station provides free broadcasting. Its survival depends
on a complex model involving advertisers and content on a complex model involving advertisers and content providersproviders
Internet portals, such as Yahoo, also use a complex Internet portals, such as Yahoo, also use a complex business model.business model.
Chapter 1Chapter 1 99
Digital Age Business ModelsDigital Age Business Models
Name-Your-Own PriceName-Your-Own Price
Reverse AuctionsReverse Auctions
Affiliate MarketingAffiliate Marketing
E-Marketplaces and ExchangesE-Marketplaces and Exchanges
Electronic aggregation (buying groups)Electronic aggregation (buying groups)
Chapter 1Chapter 1 1010
Drivers Forcing Changes In Drivers Forcing Changes In Business ModelsBusiness Models
Environmental, organizational, and technological Environmental, organizational, and technological factorsfactors
React frequently and quickly to both the React frequently and quickly to both the threatsthreats and the and the opportunities opportunities resulting from this new resulting from this new business environmentbusiness environment
A response can be a reaction to a pressure A response can be a reaction to a pressure already in existence, an initiative intended to already in existence, an initiative intended to defend an organization against future pressures, defend an organization against future pressures, or an activity that exploits an opportunity created or an activity that exploits an opportunity created by changing conditionsby changing conditions
Business Pressures
Business Critical Response Activities
Chapter 1Chapter 1 1111
The Drivers of Change The Drivers of Change ((Continued)Continued)
Chapter 1Chapter 1 1212
Business Pressures, Business Pressures, Organizational Responses, and Organizational Responses, and
IT SupportIT Support Business PressureBusiness Pressure - The business environment is the - The business environment is the combination of social, legal, economic, physical, and combination of social, legal, economic, physical, and political factors that affect business activitiespolitical factors that affect business activities
Significant changes in any of these factors are likely to Significant changes in any of these factors are likely to create business pressure on the organizationcreate business pressure on the organization
The three types of business pressures faced are: The three types of business pressures faced are: marketmarket, , technologytechnology, and , and societal pressuressocietal pressures..
Chapter 1Chapter 1 1313
Three Types of Business Three Types of Business PressuresPressures
Market PressuresMarket Pressures: :
The Global Economy and Strong CompetitionThe Global Economy and Strong Competition
The Changing Nature of the WorkforceThe Changing Nature of the Workforce
Powerful CustomersPowerful Customers
Chapter 1Chapter 1 1414
Business Pressures Business Pressures (Continued)(Continued)
Technology PressuresTechnology Pressures::
Technological Innovation and ObsolescenceTechnological Innovation and Obsolescence
Information OverloadInformation Overload
Chapter 1Chapter 1 1515
Business Pressures Business Pressures (Continued)(Continued)
Societal PressuresSocietal Pressures: :
Social Responsibility Social Responsibility
Government Regulation and Deregulation Government Regulation and Deregulation
Protection Against Terrorist AttacksProtection Against Terrorist Attacks
Ethical IssuesEthical Issues
Chapter 1Chapter 1 1616
Organizational ResponsesOrganizational Responses
Strategic Systems:Strategic Systems: enable organizations to increase enable organizations to increase market share and/or profits.market share and/or profits.
Customer FocusCustomer Focus enable organizations to provide enable organizations to provide superb customer service and prevent losing customers superb customer service and prevent losing customers to competitors.to competitors.
Chapter 1Chapter 1 1717
Organizational Responses Organizational Responses (Continued)(Continued)
Make-to-OrderMake-to-Order is a strategy of producing customized is a strategy of producing customized products and servicesproducts and services
Mass CustomizationMass Customization is producing a large quantity of is producing a large quantity of items, but customizing them to fit the desire of each items, but customizing them to fit the desire of each customercustomer
E-businessE-business and and E-commerceE-commerce is the strategy of doing is the strategy of doing business electronicallybusiness electronically
Chapter 1Chapter 1 1818
Why Study Information Why Study Information Systems?Systems?
You will be more effective in your chosen career if you You will be more effective in your chosen career if you understand how successful information systems are built, understand how successful information systems are built, used, and managedused, and managed
You also will be more effective if you know how to You also will be more effective if you know how to recognize and avoid unsuccessful systems and failuresrecognize and avoid unsuccessful systems and failures
According to the US Bureau of Labor Statistics, the “top According to the US Bureau of Labor Statistics, the “top seven fastest growing occupations fall within IT or seven fastest growing occupations fall within IT or computer related field”computer related field”
Developing “Computer” Literacy will only enhance your Developing “Computer” Literacy will only enhance your “Information” Literacy“Information” Literacy
Chapter 1Chapter 1 1919
Doing Business in the Digital Doing Business in the Digital EconomyEconomy
The The digital economydigital economy is an economy based on digital is an economy based on digital technologies, including communication networks (the technologies, including communication networks (the Internet, intranets, and extranets), computers, software, Internet, intranets, and extranets), computers, software, and other related technologiesand other related technologies
Also called the Also called the Internet economyInternet economy, the , the new economynew economy, or , or the the Web economyWeb economy
Digital infrastructures provide a Digital infrastructures provide a global platformglobal platform over over which people and organizations interact, communicate, which people and organizations interact, communicate, collaborate, and search for information.collaborate, and search for information.
Chapter 1Chapter 1 2020
The Global Platform of the New The Global Platform of the New EconomyEconomy
A huge number of digitizable products; that is products A huge number of digitizable products; that is products that can be converted to digital format. Most common that can be converted to digital format. Most common are: books, movies, magazines, TV and radio are: books, movies, magazines, TV and radio programming, electronic games, music CDs, and programming, electronic games, music CDs, and computer software.computer software.
Consumers and firm conducting financial transaction Consumers and firm conducting financial transaction digitally.digitally.
Physical goods such as home appliances and Physical goods such as home appliances and automobiles that contain embedded computer chips and automobiles that contain embedded computer chips and connectivity capabilities.connectivity capabilities.
Chapter 1Chapter 1 2121
Electronic BusinessElectronic Business
Businesses increasingly perform their basic functions: Businesses increasingly perform their basic functions: buying and selling goods and services, servicing buying and selling goods and services, servicing customers, and collaborating with business partners customers, and collaborating with business partners electronicallyelectronically
This process is known as This process is known as electronic business (E-electronic business (E-business) business) or or electronic commerce (E-commerce)electronic commerce (E-commerce)
Chapter 1Chapter 1 2222
New Economy vs. Old EconomyNew Economy vs. Old Economy
Example Example OldOld New New Buying and selling textbook Buying and selling textbook Visit the bookstoreVisit the bookstore Visit web site for publishers Visit web site for publishers
and retailers and retailers
Registering for classesRegistering for classes Walk around campus to Walk around campus to Departments, Registrar’s Departments, Registrar’s office, etc. office, etc.
Access campus web siteAccess campus web site
Photography Photography Buy film, use camera, take Buy film, use camera, take picture, take it for processing picture, take it for processing
Use digital cameraUse digital camera
Paying for GasolinePaying for Gasoline Fill up your car, go inside, pay Fill up your car, go inside, pay cash or credit card cash or credit card
Use speed pass token; wave Use speed pass token; wave over the sensor and go over the sensor and go
Paying for Transportation Paying for Transportation Pay cash, metal tokens Pay cash, metal tokens Metro cards electronic cardsMetro cards electronic cards
Paying for goodsPaying for goods Visit store, select item, pay, goVisit store, select item, pay, go Use self-service kiosksUse self-service kiosks
Supplying commercial photos Supplying commercial photos Use newspapers, paper, Use newspapers, paper, catalog, or online catalog, or online
Use hub-like supply chain with Use hub-like supply chain with digitized picture digitized picture
Chapter 1Chapter 1 2323
New Economy vs. Old EconomyNew Economy vs. Old Economy
Example #1: Registering for ClassesExample #1: Registering for Classes
Old Economy: You would go to the Registrar’s Old Economy: You would go to the Registrar’s Office on campus with a paper registration Office on campus with a paper registration documentdocument
New Economy: You access your campus website, New Economy: You access your campus website, log into registration site, and electronically register log into registration site, and electronically register for classes from anywherefor classes from anywhere
Chapter 1Chapter 1 2424
New Economy vs. Old EconomyNew Economy vs. Old Economy
Example #2: Buying and Selling TextbooksExample #2: Buying and Selling Textbooks
Old Economy: You go to the bookstore in person Old Economy: You go to the bookstore in person and buy new or sell used booksand buy new or sell used books
New Economy: You go online to the Publisher’s New Economy: You go online to the Publisher’s Web site or to Web-based services such as Web site or to Web-based services such as Amazon.com to buy or sell booksAmazon.com to buy or sell books
Chapter 1Chapter 1 2525
New Economy vs. Old EconomyNew Economy vs. Old Economy
Example #3: PhotographyExample #3: Photography
Old Economy: You use a camera with film, which Old Economy: You use a camera with film, which you have to purchase and have developed; you you have to purchase and have developed; you mail copies of pictures.mail copies of pictures.
New Economy: You can scan photos, make copies New Economy: You can scan photos, make copies and e-mail them. Digital cameras require no film or and e-mail them. Digital cameras require no film or processing. Digital photography and video processing. Digital photography and video integrated into cell phones for immediate viewing integrated into cell phones for immediate viewing
Chapter 1Chapter 1 2626
New Economy vs. Old EconomyNew Economy vs. Old Economy
Example #4: Paying for GasolineExample #4: Paying for Gasoline
Old Economy: You pump your gas and go inside to Old Economy: You pump your gas and go inside to pay using cash or creditpay using cash or credit
New Economy: Insert credit card at pump, receive New Economy: Insert credit card at pump, receive authorization, pump gas, get receipt, drive away. authorization, pump gas, get receipt, drive away. Another example is Speedpass technology.Another example is Speedpass technology.
Chapter 1Chapter 1 2727
New Economy vs. Old EconomyNew Economy vs. Old Economy
Example #5: Paying for Transportation in New York CityExample #5: Paying for Transportation in New York City
Old Economy: Use tokens for bus and subway Old Economy: Use tokens for bus and subway transportationtransportation
New Economy: Bus and subway riders now use New Economy: Bus and subway riders now use MetroCards; contactless cards that have a small MetroCards; contactless cards that have a small radio transmitter that transmit account information radio transmitter that transmit account information to a readerto a reader
Chapter 1Chapter 1 2828
New Economy vs. Old EconomyNew Economy vs. Old Economy
Example #6: Paying for Goods, CheckoutExample #6: Paying for Goods, Checkout
Old-old Economy: Customer selects goods, waits in Old-old Economy: Customer selects goods, waits in line for the cashier to key in price of items, and then line for the cashier to key in price of items, and then pays in cashpays in cash
Old Economy: The clerk swipes the barcode of Old Economy: The clerk swipes the barcode of each item and customer pays in cash, credit, or each item and customer pays in cash, credit, or debit. Information scanned is available for debit. Information scanned is available for immediate analysis known as immediate analysis known as source-data source-data automationautomation
Chapter 1Chapter 1 2929
New Economy vs. Old EconomyNew Economy vs. Old Economy (Ex. #6 Continued)(Ex. #6 Continued)
Example #6: Paying for Goods, Checkout continuedExample #6: Paying for Goods, Checkout continued
Old Economy: Shoppers take their items to a self-Old Economy: Shoppers take their items to a self-service kiosk and swipe the barcodes themselvesservice kiosk and swipe the barcodes themselves
New Economy: Wireless technology affixed to New Economy: Wireless technology affixed to each item. Allows you to select items that pass each item. Allows you to select items that pass through a scanner, which reads wireless signal, through a scanner, which reads wireless signal, generates a bill, automatically debits your generates a bill, automatically debits your designated account for payment and you leavedesignated account for payment and you leave
Chapter 1Chapter 1 3030
Three Types of Business Three Types of Business PressuresPressures
Market PressuresMarket Pressures: :
The Global Economy and Strong CompetitionThe Global Economy and Strong Competition
The Changing Nature of the WorkforceThe Changing Nature of the Workforce
Powerful CustomersPowerful Customers
Chapter 1Chapter 1 3131
Business Pressures Business Pressures (Continued)(Continued)
Technology PressuresTechnology Pressures::
Technological Innovation and ObsolescenceTechnological Innovation and Obsolescence
Information OverloadInformation Overload
Chapter 1Chapter 1 3232
Business Pressures Business Pressures (Continued)(Continued)
Societal PressuresSocietal Pressures: :
Social Responsibility Social Responsibility
Government Regulation and Deregulation Government Regulation and Deregulation
Protection Against Terrorist AttacksProtection Against Terrorist Attacks
Ethical IssuesEthical Issues
Chapter 1Chapter 1 3333
Organizational ResponsesOrganizational Responses
Strategic SystemsStrategic Systems provide advantages that enable provide advantages that enable organizations to increase market share and/or profits, organizations to increase market share and/or profits, better negotiate with suppliers, or prevent competitors better negotiate with suppliers, or prevent competitors from entering their marketsfrom entering their markets
Customer FocusCustomer Focus is the difference between attracting is the difference between attracting and keeping customers by providing superb customer and keeping customers by providing superb customer service and losing them to competitorsservice and losing them to competitors
Chapter 1Chapter 1 3434
Organizational ResponsesOrganizational Responses (Continued)(Continued)
Make-to-OrderMake-to-Order is a strategy of producing customized is a strategy of producing customized products and servicesproducts and services
Mass CustomizationMass Customization is producing a large quantity of is producing a large quantity of items, but customizing them to fit the desire of each items, but customizing them to fit the desire of each customercustomer
E-businessE-business and and E-commerceE-commerce is the strategy of doing is the strategy of doing business electronicallybusiness electronically
Chapter 1Chapter 1 3535
Why Should You Learn about Why Should You Learn about Information Technology (IT)?Information Technology (IT)?
IT is essential for work in organizationsIT is essential for work in organizations
IT will reduce the number of middle managersIT will reduce the number of middle managers
IT will change the manager’s jobIT will change the manager’s job
IT impacts employees at workIT impacts employees at work
IT impacts employees’ health and safetyIT impacts employees’ health and safety
IT is used by all departmentsIT is used by all departments
Chapter 1Chapter 1 3636
Why Should You Learn about Why Should You Learn about IT?IT? (Continued)(Continued)
IT provides opportunities for people with disabilitiesIT provides opportunities for people with disabilities
IT provides quality-of-life improvementsIT provides quality-of-life improvements
Improvements in health careImprovements in health care
Crime fighting and other benefitsCrime fighting and other benefits
Chapter 1Chapter 1 3737
Managerial IssuesManagerial Issues
Recognizing opportunities for using IT and Web-based systems.Recognizing opportunities for using IT and Web-based systems.
Who will build, operate, and maintain the information systems. Who will build, operate, and maintain the information systems. How much IT? How much IT?
How much and HOW important is IT? How much and HOW important is IT?
Is the situation going to change? Is the situation going to change?
Globalization. Globalization.
Chapter 1Chapter 1 3838
Managerial IssuesManagerial Issues (Continued)(Continued)
Ethics and social issues. Ethics and social issues.
Transforming the organization to the digital Transforming the organization to the digital economy. economy.
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