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

IT - The Organization and the Individual Chapter 12

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

Eleventh Edition James A. O’Brien 4 Introduction to Information Systems Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved. 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. Chapter Objectives

Evaluating Trends

6 Technology & Organizations Impact of new technologies on organizations: Impact of new technologies on organizations: First, most organizations will perform existing functions at decreasing costs over time and thus become more efficient.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.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.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 Trend -- Information -> Collaboration Today’s Internet focuses on access to and delivery of information Today’s Internet focuses on access to and delivery of information Tomorrow’s Internet will support human collaboration in an information-rich environment 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 The Internet is global, and is creating a global capability to build knowledge-based communities

8 The Productivity Paradox Over the last 50 years, organizations have invested trillions of dollars in information technology. 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.Total worldwide annual spending on IT in 2000 was two trillion dollars, and is expected to be over three trillion dollars by Yet it is very hard to demonstrate that IT investments really have increased outputs or wages. 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. 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 productivity as outputs divided by inputs. Economists define productivity as outputs divided by inputs. Outputs are calculated by multiplying units produced, for example, number of automobiles, by their average value.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 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. If other inputs—investments and materials—are included, the ratio is known as multifactor productivity.

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

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

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

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

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

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

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

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

Eleventh Edition James A. O’Brien 18 Introduction to Information Systems Irwin/McGraw-Hill Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved. 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.

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