1.1 © 2002 by Prentice Hall c h a p t e r 1 1 MANAGING THE DIGITAL FIRM DIGITAL FIRM

1.2 © 2002 by Prentice Hall ANALYZE ROLE OF INFORMATION SYSTEMS IN BUSINESS ENVIRONMENTANALYZE ROLE OF INFORMATION SYSTEMS IN BUSINESS ENVIRONMENT DEFINE INFORMATION SYSTEM, COMPUTER LITERACY, INFORMATION SYSTEMS LITERACYDEFINE INFORMATION SYSTEM, COMPUTER LITERACY, INFORMATION SYSTEMS LITERACY EXPLAIN HOW INFORMATION SYSTEMS TRANSFORM ORGANIZATION & MANAGEMENTEXPLAIN HOW INFORMATION SYSTEMS TRANSFORM ORGANIZATION & MANAGEMENT* LEARNING OBJECTIVES © 2002 by Prentice Hall

1.3 © 2002 by Prentice Hall LEARNING OBJECTIVES ASSESS DIGITAL FIRM, ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, INTERNET TECHNOLOGYASSESS DIGITAL FIRM, ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, INTERNET TECHNOLOGY IDENTIFY MANAGEMENT CHALLENGES TO BUILDING, USING INFORMATION SYSTEMSIDENTIFY MANAGEMENT CHALLENGES TO BUILDING, USING INFORMATION SYSTEMS* © 2002 by Prentice Hall

1.4 © 2002 by Prentice Hall MANAGEMENT CHALLENGES WHY INFORMATION SYSTEMS?WHY INFORMATION SYSTEMS? CONTEMPORARY APPROACHES TO INFORMATION SYSTEMSCONTEMPORARY APPROACHES TO INFORMATION SYSTEMS ROLE OF INFORMATION SYSTEMSROLE OF INFORMATION SYSTEMS USING INFORMATION SYSTEMSUSING INFORMATION SYSTEMS* © 2002 by Prentice Hall

1.5 © 2002 by Prentice Hall MANAGEMENT CHALLENGES 1. DESIGN COMPETITIVE & EFFICIENT SYSTEMS 2. UNDERSTAND SYSTEM REQUIREMENTS OF GLOBAL BUSINESS ENVIRONMENT 3. CREATE INFORMATION ARCHITECTURE THAT SUPPORTS ORGANIZATION’S GOALS * © 2002 by Prentice Hall

1.6 © 2002 by Prentice Hall MANAGEMENT CHALLENGES 4. DETERMINE BUSINESS VALUE OF INFORMATION SYSTEMS 5. DESIGN SYSTEMS PEOPLE CAN CONTROL, UNDERSTAND & USE IN A SOCIALLY, ETHICALLY RESPONSIBLE MANNER * © 2002 by Prentice Hall

1.7 © 2002 by Prentice Hall THE CHANGING BUSINESS ENVIRONMENT GLOBALIZATIONGLOBALIZATION INDUSTRIAL ECONOMIESINDUSTRIAL ECONOMIES TRANSFORMATION OF THE ENTERPRISETRANSFORMATION OF THE ENTERPRISE*

1.8 © 2002 by Prentice Hall GLOBALIZATION MANAGEMENT & CONTROLMANAGEMENT & CONTROL COMPETITION IN WORLD MARKETSCOMPETITION IN WORLD MARKETS GLOBAL WORK GROUPSGLOBAL WORK GROUPS GLOBAL DELIVERY SYSTEMSGLOBAL DELIVERY SYSTEMS*

1.9 © 2002 by Prentice Hall INDUSTRIAL ECONOMIES KNOWLEDGE-BASED ECONOMIESKNOWLEDGE-BASED ECONOMIES PRODUCTIVITYPRODUCTIVITY NEW PRODUCTS & SERVICESNEW PRODUCTS & SERVICES KNOWLEDGE AS AN ASSETKNOWLEDGE AS AN ASSET TIME-BASED COMPETITIONTIME-BASED COMPETITION SHORTER PRODUCT LIFESHORTER PRODUCT LIFE TURBULENT ENVIRONMENTTURBULENT ENVIRONMENT LIMITED EMPLOYEE KNOWLEDGE BASELIMITED EMPLOYEE KNOWLEDGE BASE*

1.10 © 2002 by Prentice Hall TRANSFORMATION OF ENTERPRISE FLATTENINGFLATTENING DECENTRALIZATIONDECENTRALIZATION FLEXIBILITYFLEXIBILITY LOCATION INDEPENDENCELOCATION INDEPENDENCE LOW TRANSACTION COSTSLOW TRANSACTION COSTS EMPOWERMENTEMPOWERMENT COLLABORATIVE WORKCOLLABORATIVE WORK*

1.11 © 2002 by Prentice Hall EMERGENCE OF THE DIGITAL FIRM DIGITALLY-ENABLED RELATIONSHIPS WITH CUSTOMERS, SUPPLIERS, EMPLOYEESDIGITALLY-ENABLED RELATIONSHIPS WITH CUSTOMERS, SUPPLIERS, EMPLOYEES CORE BUSINESS PROCESSES VIA DIGITAL NETWORKSCORE BUSINESS PROCESSES VIA DIGITAL NETWORKS DIGITAL MANAGEMENT OF KEY ASSETSDIGITAL MANAGEMENT OF KEY ASSETS RAPID SENSING & RESPONDING TO CHANGERAPID SENSING & RESPONDING TO CHANGE*

1.12 © 2002 by Prentice Hall LABOR FORCE COMPOSITION

1.13 © 2002 by Prentice Hall SYSTEM INPUTOUTPUTPROCESS FEEDBACK

1.14 © 2002 by Prentice Hall FUNCTIONS OF AN INFORMATION SYSTEM INPUTOUTPUTPROCESS FEEDBACK INFORMATION SYSTEM ENVIRONMENT Customers Suppliers Regulatory Stockholders Competitors Agencies ORGANIZATION

1.15 © 2002 by Prentice Hall DATA & INFORMATION DATA: STREAMS OF RAW FACTS REPRESENTING EVENTS SUCH AS BUSINESS TRANSACTIONSDATA: STREAMS OF RAW FACTS REPRESENTING EVENTS SUCH AS BUSINESS TRANSACTIONS INFORMATION: CLUSTERS OF FACTS MEANINGFUL & USEFUL TO HUMAN BEINGS IN PROCESSES SUCH AS MAKING DECISIONSINFORMATION: CLUSTERS OF FACTS MEANINGFUL & USEFUL TO HUMAN BEINGS IN PROCESSES SUCH AS MAKING DECISIONS*

1.16 © 2002 by Prentice Hall COMPUTER-BASED INFORMATION SYSTEMS (CBIS) FORMAL SYSTEMSFORMAL SYSTEMS FIXED DEFINITIONS OF DATA, PROCEDURESFIXED DEFINITIONS OF DATA, PROCEDURES COLLECTING, STORING, PROCESSING, DISSEMINATING, USING DATACOLLECTING, STORING, PROCESSING, DISSEMINATING, USING DATA*

1.17 © 2002 by Prentice Hall INFORMATION SYSTEMS ORGANIZATIONSTECHNOLOGY MANAGEMENT INFORMATION SYSTEMS SYSTEMS

1.18 © 2002 by Prentice Hall ORGANIZATIONS PEOPLE: Managers, knowledge workers, data workers, production or service workersPEOPLE: Managers, knowledge workers, data workers, production or service workers STRUCTURE: Organization chart, groups of specialists, products, geographySTRUCTURE: Organization chart, groups of specialists, products, geography*

1.19 © 2002 by Prentice Hall ORGANIZATIONS OPERATING PROCEDURES: Standard Operating Procedures (SOP), rules for actionOPERATING PROCEDURES: Standard Operating Procedures (SOP), rules for action POLITICS: Power to persuade, get things donePOLITICS: Power to persuade, get things done CULTURE: Customs of behaviorCULTURE: Customs of behavior*

1.20 © 2002 by Prentice Hall MAJOR BUSINESS FUNCTIONS SALES & MARKETINGSALES & MARKETING MANUFACTURINGMANUFACTURING FINANCEFINANCE ACCOUNTINGACCOUNTING HUMAN RESOURCESHUMAN RESOURCES*

1.21 © 2002 by Prentice Hall COMPUTER TECHNOLOGY HARDWAREHARDWARE SOFTWARESOFTWARE STORAGESTORAGE COMMUNICATIONSCOMMUNICATIONS NETWORKSNETWORKS*

1.22 © 2002 by Prentice Hall SOCIOLOGY POLITICAL SCIENCE PSYCHOLOGY COMPUTERSCIENCE OPERATIONSRESEARCH MANAGEMENTSCIENCE TECHNICAL APPROACHES APPROACHES TO INFO SYSTEMS MIS BEHAVIORAL APPROACHES

1.23 © 2002 by Prentice Hall SOCIOTECHNICAL PERSPECTIVE OPTIMIZE SYSTEM PERFORMANCE: TECHNOLOGY & ORGANIZATION MUTUALLY ADJUST TO ONE ANOTHER UNTIL FIT IS SATISFACTORY * SOURCE: Liker, et al, 1987

1.24 © 2002 by Prentice Hall SYSTEM INTERDEPENDENCE BUSINESS Strategy Strategy Rules Rules Procedures Procedures ORGANIZATION INFORMATION SYSTEM HARDWARE SOFTWAREDATABASE TELE- COMMUNICATIONS INTERDEPENDENCE

1.25 © 2002 by Prentice Hall 1950s: TECHNICAL CHANGES1950s: TECHNICAL CHANGES 60s-70s: MANAGERIAL CONTROL60s-70s: MANAGERIAL CONTROL 80s-90s: INSTITUTIONAL CORE ACTIVITIES80s-90s: INSTITUTIONAL CORE ACTIVITIES GROWING IMPORTANCE * SCOPE OF INFO SYSTEMS

1.26 © 2002 by Prentice Hall WHAT YOU CAN DO ON THE INTERNET COMMUNICATE & COLLABORATECOMMUNICATE & COLLABORATE ACCESS INFORMATIONACCESS INFORMATION DISCUSSDISCUSS OBTAIN INFORMATIONOBTAIN INFORMATION ENTERTAINENTERTAIN TRANSACT BUSINESSTRANSACT BUSINESS*

1.27 © 2002 by Prentice Hall NEW OPTIONS FOR ORGANIZATIONAL DESIGN FLATTENING ORGANIZATIONSFLATTENING ORGANIZATIONS SEPARATING WORK FROM LOCATIONSEPARATING WORK FROM LOCATION REORGANIZING WORK-FLOWSREORGANIZING WORK-FLOWS INCREASING FLEXIBILITYINCREASING FLEXIBILITY REDEFINING ORGANIZATIONAL BOUNDARIESREDEFINING ORGANIZATIONAL BOUNDARIES*

1.28 © 2002 by Prentice Hall THE DIGITAL FIRM ELECTRONIC COMMERCEELECTRONIC COMMERCE ELECTRONIC BUSINESSELECTRONIC BUSINESS ELECTRONIC MARKET: Information system links buyers & sellers to exchange information, products, services, paymentsELECTRONIC MARKET: Information system links buyers & sellers to exchange information, products, services, payments*

1.29 © 2002 by Prentice Hall ELECTRONIC COMMERCE INTERNET LINKS BUYERS, SELLERSINTERNET LINKS BUYERS, SELLERS LOWERS TRANSACTION COSTSLOWERS TRANSACTION COSTS GOODS & SERVICES ADVERTISED, BOUGHT, EXCHANGED WORLDWIDEGOODS & SERVICES ADVERTISED, BOUGHT, EXCHANGED WORLDWIDE BUSINESS-TO-BUSINESS TRANSACTIONS INCREASINGBUSINESS-TO-BUSINESS TRANSACTIONS INCREASING*

1.30 © 2002 by Prentice Hall ELECTRONIC BUSINESS INTRANET: Business builds private, secure networkINTRANET: Business builds private, secure network , WEB DOCUMENTS, GROUP SOFTWARE: Extends effective communication & control , WEB DOCUMENTS, GROUP SOFTWARE: Extends effective communication & control EXTRANET: Extension of Intranet to authorized external usersEXTRANET: Extension of Intranet to authorized external users*

1.31 © 2002 by Prentice Hall c h a p t e r 1 1 MANAGING THE DIGITAL FIRM DIGITAL FIRM