The Modern Organization in the Global, Web-Based Environment CHAPTER 1 The Modern Organization in the Global, Web-Based Environment How the internet supports today’s business.

Learning Objectives Differentiate among data, information, and knowledge. Distinguish between information technology infrastructure and information technology architecture. Discuss the relationships among business pressures, organizational responses, and the role of information systems.

Chapter Outline 1.1 Information Systems: Concepts and Definitions 1.2 The Global, Web-Based Platform 1.3 Business Pressures, Organizational Responses, and IT Support 1.4 Why Are Information Systems Important to You? 1.5 The Plan of the Book

Chapter Opening Case P. 4 Google servers in a server farm Google Headquarters

Today we are … The most connected generation in history. Practicing continuous computing. Surrounded by a personal, movable information network. Our personal information network is created by constant cooperation between: the digital devices we carry; the wired and wireless networks that we access as we move about; Web-based tools for finding information and communicating and collaborating with other people. We can pull information from the Web and push ideas back to the Web. Your personal information network is created by constant cooperation between: the digital devices you carry; the wired and wireless networks that you access as you move about; Web-based tools for finding information and communicating and collaborating with other people. You can pull information from the Web and push your ideas back to the Web.

1.1 Information Systems: Concepts and Definitions Data Item Elementary description of things, events, activities and transactions that are recorded, classified and stored but are not organized to convey any specific meaning. Information Data organized so that they have meaning and value to the recipient. Knowledge Data and/or information organized and processed to convey understanding, experience, accumulated learning and expertise as they apply to a current problem or activity. Data Item. Elementary description of things, events, activities and transactions that are recorded, classified and stored but are not organized to convey any specific meaning. Information. Data organized so that they have meaning and value to the recipient. Knowledge. Data and/or information organized and processed to convey understanding, experience, accumulated learning and expertise as they apply to a current problem or activity.

1.1 Information Systems: Concepts and Definitions Information Technology Architecture. A high-level map or plan of the information assets in an organization, which guides current operations and is a blueprint for future directions. Information Technology Infrastructure. The physical facilities, IT components, IT services and IT personnel that support an entire organization. Information Technology Architecture. A high-level map or plan of the information assets in an organization, which guides current operations and is a blueprint for future directions. Information Technology Infrastructure. The physical facilities, IT components, IT services and IT management that support an entire organization.

IT Architecture Example: Online Travel Agency

1.1 Information Systems: Concepts and Definitions IT components consist of hardware, software, telecommunications and networks, and wireless communications. IT components are basically synonymous with the IT platform. IT services consist of data management, managing security and risk, and systems development. IT personnel use IT components to produce IT services.

1.2 The Global, Web-Based Platform Best represented by the Internet and the World Wide Web. Enables us to connect, compute, communicate, collaborate, and compete everywhere and anytime. Operates without regard to geography, time, distance, and language.

The Internet The cloud in this figure represents the Internet. Various companies’ data centers are connected to the Internet. When you make a query to Google, Yahoo, or Amazon (for example), your request travels over the Internet to one of their data centers. As many servers as are needed are brought to bear answering your query. The response is then sent back to you.

IT Components, Services, Platform, and Infrastructure IT components consist of hardware, software, telecommunications and networks, and wireless communications. IT services consist of data management, managing security and risk, and systems development. IT personnel use IT components to produce IT services. IT components are basically synonymous with the IT platform. IT infrastructure consists of IT components, IT personnel, and IT services.

The Stages of Globalization (From Thomas Friedman’s The World is Flat) Globalization 1.0 (from 1492 to 1800) Globalization 2.0 (from 1800 to 2000) Globalization 3.0 (from 2000 to the present) For my notes on Friedman’s Flatteners, see: http://www.auburn.edu/~rainerk/world_is_flat.html Globalization 1.0 * 1492 to 1800 * World went from large to medium-size * All about countries and muscles * Key agents of change: brawn and horsepower Globalization 2.0 * 1800 to 2000 * World has shrunk from medium to small-size * Key agent of change: multinational companies * First half: global integration powered by falling transportation costs (steam engine and railroad) * Second half: global integration powered by falling telecommunications costs (telephone, PC, satellites, fiber-optic cable) Globalization 3.0 * 2000 – now * World is now tiny (everyone is everyone else’s close neighbor) * Competitive playing field is being leveled * Key agent of change: software, in conjunction with the global fiber-optic network * Enabling people to collaborate and compete globally 3.0 2.0 1.0

Globalization 1.0 1492 to 1800 World went from large to medium-size. All about countries the amount of muscle, horsepower, steam power, etc that they could deploy. Key agents of change: brawn and horsepower. Christopher Columbus Christopher Columbus “discovering” the New World in 1492.

Globalization 2.0 (first half) 1800 – 2000 Global integration during the first half of Globalization 2.0 was driven by falling transportation costs. steam engine railroads Steam engine Railroads Global integration during the first half of Globalization 2.0 was driven by falling transportation costs (for example, steam engine and the railroads).

Globalization 2.0 (second half) Global integration during the second half of Globalization 2.0 was driven by falling communications costs. satellites, fiber optics, personal computer, and wireless smart phones Fiber optics Global integration during the second half of Globalization 2.0 was driven by falling communications costs (e.g., satellites, fiber optics, the personal computer, and wireless smart phones). Satellites

Globalization 3.0 2000 to the present. Driven by the convergence of ten forces (flatteners). Result: emergence of a global, web-based platform. Key agent of change: Software, in conjunction with the global internet enabling people to collaborate and compete globally. Key agent of change: software, in conjunction with the global fiber-optic network enabling people to collaborate and compete globally 3.0 2.0 1.0

Globalization 3.0 (continued) Schematic Map of the Internet

1 - Fall of the Berlin Wall November 9, 1989 Free market economies of Eastern Europe (1991) and Rise of the European Union.

2 - Netscape Goes Public August 9, 1995 Marc Andreessen (wrote Mosaic browser and Netscape browser)

3 - Workflow Software Enables computer applications to interoperate or communicate and work with one another without human intervention. Standards such as Extensible Markup Language (XML) enable workflow communication. This image is an interesting juxtaposition of the old assembly line (on the right) and the integrated circuits of work-flow software (on the left).

4 - Uploading Anyone can create and upload content to the web. Shift from static, passive approach to media to an active participatory approach. The Open Source Movement: an essential ingredient of uploading. Clicking on the Blogger, Wikipedia, or YouTube logos on this slide will take you to their respective home pages.

The Open Source Movement Linux Mozilla Firefox The Mozilla Foundation has shifted its focus to its Firefox Web browser and Thunderbird e-mail package. Thunderbird

5 - Outsourcing Involves taking a specific function that a company was doing itself, having another company perform that same function and then integrating their work back into the original company. Outsourcing gained momentum and “took off” with Year 2000 (Y2K) problem.

6 - Offshoring Occurs when a company moves an entire operation, or certain tasks to another country. The operation and/or activities are performed the same way, but with cheaper labor, lower taxes, fewer benefits, etc. Call center in India

7 - Supply Chaining Occurs when companies, their suppliers, and their customers collaborate and share information. Requires common standards so each segment of the chain can efficiently interface/communicate.

8 - Insourcing Delegates operations or jobs within a business to another company, which specializes in those operations. Example: Dell hires FedEx to analyze Dell’s shipping process and then “take over” that process. FedEx employees work inside Dell but remain employed by Fed Ex.

9 - Informing Ability to search for information (e.g., search engines). Facilitates the formation of global communities. There are MANY other interesting search engines as we see in Chapter 5

10 - The IT Steroids The IT Steroids amplify the other flatteners. They enable all forms of computing and collaboration to be digital, mobile, virtual, and personal. Digital All analog content and processes are being digitized. Mobile Thanks to wireless technologies, computing, connecting, collaborating can be done anywhere. Virtual The process of shaping, manipulating, and transmitting digitized content can be done at very high speeds, so that users do not have to think about these processes. Personal Individuals can perform all the virtual processes on their own computing devices. Digital: all analog content and processes are being digitized Mobile: thanks to wireless technologies, computing, connecting, collaborating can be done anywhere Virtual: the process of shaping, manipulating, and transmitting digitized content can be done at very high speeds, so that users do not have to think about these processes Personal: Individuals can perform all these processes on their own computing devices

The IT Steroids Computing-Processing Computing-Storage Instant Messaging and File Sharing Wireless Technologies Voice over Internet Protocol Videoconferencing Computer Graphics

Computing - Processing TO Ultramobile personal computer Charles Babbage’s Difference Engine (1822)

Computing - Storage TO Sony Micro Vault Thumb Drive Capacity: 2 gigabytes First disk storage unit by IBM (1956) Capacity: 5 megabytes Size: Refrigerator

Instant Messaging and File Sharing Instant messaging (example) File sharing (example)

Wireless Technologies Using cell phone in motion Geostationary satellite Bluetooth phone sunglasses

Voice over Internet Protocol

Videoconferencing An individual telepresence system A telepresence system in a conference room

Videoconferencing and Medicine New Zealand used Polycom, a leading vendor of telepresence systems, to provide a telemedicine application for children. The telemedicine link will show a video of the New Zealand application. Clicking on the Polycom logo will take you to its homepage.

Computer Graphics

1.3 Business Pressures, Organizational Responses, and IT Support The business environment is the combination of social, legal, economic, physical, and political factors that affect business activities. Significant changes in any of these factor are likely to create business pressure on the organization. The three types of business pressures faced are: Market Pressures Technology Pressures Societal Pressures Business Pressure - The business environment is the combination of social, legal, economic, physical, and political factors that affect business activities. Significant changes in any of these factor are likely to create business pressure on the organization. The three types of business pressures faced are: market, technology, and societal pressures.

Market Pressures The Global Economy and Strong Competition European Union NAFTA Labor Costs The Changing Nature of the Workforce Diversified Telecommuting Powerful Customers Sophisticated Knowledgeable Customer Relationship Management (CRM)

Technology Pressures Information Overload Amount of information on the internet doubles approximately every year. Technological Innovation and Obsolescence Today’s state-of-the-art products may be obsolete tomorrow. e.g., CRT monitors vs LCD monitors

Technological Innovation and Obsolescence Obsolescence: Slide Rule Innovation: Early calculator

Technological Innovation and Obsolescence (continued) Innovation: Telegraph Obsolescence: Pony Express

Technological Innovation and Obsolescence (continued) Innovation: iPod nano Obsolescence: old phonograph

Technological Innovation and Obsolescence (continued) Innovation: digital camera Innovation: “Credit card” digital camera Obsolescence: old analog camera

Technological Innovation and Obsolescence (continued) Horse and Buggy Innovation: Ford Model T

Technological Innovation and Obsolescence (continued) Obsolescence: Manual typewriter Your students can think of other technologies that have been obliterated by innovations. Innovation: Notebook computer with word processing software

Societal Pressures-The Third Category Of Business Pressures Social Responsibility Digital devide – gap between those who have access to IT and those who do not. Government Regulation and Deregulation Sarbanes –Oxley, Health Insurance Portability and Accountability Act (HIPAA) Protection Against Terrorist Attacks Dept of Homeland Security – US-VISIT Ethical Issues China Olympics and foreign press access to internet Newspapers/governments editing photographs

Social Responsibility One Laptop per Child initiative Bridging the Digital Divide

Social Responsibility (continued) Bridging the Digital Divide with large satellite dish in rural hamlet Internet over satellite in developing nations

Social Responsibility (continued) Bridging the Digital Divide Getting the satellite dish to the rural hamlet * Interesting juxtaposition of Agricultural Age and Information Age

Businesses are Responding to the Pressures by Implementing IT Solutions Strategic Systems Provide advantages that enable organizations to increase market share and/or profits, to better negotiate with suppliers, or prevent competitors from entering their markets. Customer Focus Is the difference between attracting and keeping customers by providing superb customer service to losing them to competitors. Make-to-Order customized products and mass customization Mass Customization is producing a large quantity of items, but customizing them to fit the desire of each customer. Reebok and Bodymetrics provide excellent examples of mass customization. See Reebok See Bodymetrics video E-business and E-commerce Buying and selling products and services electronically. E-business is a broader concept than e-commerce. Strategic Systems provide advantages that enable organizations to increase market share and/or profits, to better negotiate with suppliers, or prevent competitors from entering their markets. Customer Focus is the difference between attracting and keeping customers by providing superb customer service to losing them to competitors. Make-to-Order is a strategy of producing customized products and services. Mass Customization is producing a large quantity of items, but customizing them to fit the desire of each customer. Reebok and Bodymetrics provide excellent examples of mass customization. E-business and E-commerce: Buying and selling products and services electronically. E-business is a broader concept than e-commerce.

Business Pressures, Organizational Responses, and IT Support (Summary)

1.4 Why Are Information Systems Important to You? Information systems and information technologies are integral to your lives. For example: Register for classes Pay Bills Sell stuff online Job search etc. Information systems offer career opportunities. Being knowledgeable about IT will improve your chances of landing a good job. Information systems are used by all functional areas in an organization. “Pervasive”

Misinformation about Information Systems Career Opportunities Myth #1: There are no computing jobs. Myth #2: There will be no IT jobs when I graduate. Myth #3: All IT-related jobs are moving offshore. Myth #4: IT salaries are lower due to cheap overseas labor.

IT Jobs P. 21

1.5 The Plan of This Class The major objective of this class is to help you understand the roles of information technologies in today’s digital organizations. The class is designed to help you think strategically about information systems. The book documents how IT supports all of the functional areas of the organization. Each chapter introduces a major topic in Information Technology

Summary: The Great Convergence We are in a convergence of three powerful, technological forces: (1) Cheap and ubiquitous computing devices (2) Low-cost, high bandwidth (3) Open standards In essence, we have computing everywhere and anywhere, anytime and all the time, with access to limitless amounts of information, services, and entertainment.

The Great Convergence (continued) We have the creation of a global, Web-enabled playing field that allows for multiple forms of collaboration – the sharing of knowledge and work – in real time, without regard to geography, distance, or, in the near future, even language.  The field now includes some 3 billion new people, formerly digitally disenfranchised.

And the result of all this?