Information Technology: Its Impact on Business Education Presented by Frederick H. Wu, Ph.D., CMA Emeritus Professor University of North Texas October 30, 2009

All the Business exists to create “Value”  I am confident that we will rise to the challenge of delivering for our shareowners and customers in Verizon Communications 2008 Annual Report  We remain committed to growing long-term value to our Shareholders… ---ExxonMobil 2007 Annual Report  Service is more robust in a downturn because it create value for our customers. Service value for our customers comes from two Streams: customer efficiency thru system performance and…; and Customer productivity thru process improvement and data manage- ment. ---General Electric 2008 Annual Report

Value Creation Innovation CycleOperation Cycle Post Sales Service Cycle Identify the Market Create the Product/ Service Build Product/ Service Deliver Product/ Service The Customer Need Identified Resources: Fixed Assets; Human Assets; Intangible Assets Costs Revenues Profit Value to Customers Value to Suppliers Value To Stock- Holders & Society Interfaced by Information Technology

Top Priorities for Business in Today’s Changing Landscape: 1.Strategies for driving growth 2.Methods for managing talents 3.Ideas for improving relationships with customers and suppliers BusinessWeek, March 23 & Corporate Strategies

Strategy as a Position Cost leadership (efficiency) Examples: Wal-Mart, Kia, Dell Product leadership (differentiating): –Higher qualities (endurance, safety, timely delivery, reliability, after-sales services, etc.) Examples: Toyota, Starbucks, Google Unique products through innovation (Blue Ocean) Wines (Yellow Tail)

Relationship between Business Processes, Information Processes, and Management Processes: Business Model Acq./Pmt Process Sell/Collect Process Conversion Process Plan Management Processes Execute Control Evaluate Maintain Data Capture Data Information System Management of Business Processes Provide Information Management Control System Suppliers Market Operational Processes Goals and Strategy Supporting Processes: Human resources, Financing, Research & development, etc Organizational structure Culture Communication System Support Processes

“Investing in the IT that Makes a Competitive Difference” In Harvard Business Review, by McAfee and Brynjolfsson, July-August 2008: 1.The link between technology and competition has become much stronger since the mid-1990s. 2.Information technology such as the internet and enterprise software applications (ERP, CRM, SRM, enterprise content management (ECM) became practical tool for business.

“Information Technology Capability: Firm Valuation, Earnings Uncertainty, and Forecast Accuracy,” in Journal of Information Systems, Fall 2007 IT capability is positively associated with future earnings Uncertainty…

“An Empirical Study of the Organizational Impact of Effective Information Technology Deployment,” in “International Journal of Management Theory and Practices,” By Wilfred Wu et al., August 2005 When IT applications and business strategy have a good fit, it contributes to a firm’s financial performance significantly.

IT Architecture Definition: “The blueprint of a firm’s IT architecture defines the technical computing, information management, and communications platform.”

Components of IT Architecture Value – Creating Business Opportunities Commerce Content Community Value – Enabling IT Infrastructure Solutions and Services Enterprise Resource Planning (e.g., SAP and People Soft) Supply chain management Internet service providers Systems integration services Outsourcing and hosting Software Productivity and Development Tools Packages (Word processing, spreadsheets, package, etc.) Programming Languages (C++, Visual Basic, Cobol, Basic, etc) Computing Communications Hardware (computers, printers, etc) Operating systems Database management systems Document management systems Hardware (networks, routers, etc.) Network Operating systems Gateways and file transfer services

Implications for Business Education As a proficient knowledge worker, a student should, first of all, have a broad understanding of how firm works to create value for stakeholders: a successful “business model.” As a PKW, a student should develop his/her specialization coupled with a good IT skills.

Implications To understand how firm works to create value, a student take the following required business core courses: Accounting (6 hours) Finance (3 hrs) and investment/commodity future (3 hrs) Marketing (3 hours) Management (behavioral and quantitative: 6 hours) MIS (6 to 9 hrs) Ethics (1-3 hrs) Policy and Strategy (strategic management: 3 hrs) Economics (6 hrs)

Implications As a PKW, a student should develop the following skills: Leadership Communications (oral and written) Ability to work in a team or group High level of analytical ability Multi-language (global business: The World is Flat) Professionalism/work ethics Learn to learn

Implications We, Professors, should adopt the following for teaching: 1. Use case approach to allow students to make presentations and participate in discussion in class 2. Use group learning approach in class to allow students to learn listening, cooperation, and leadership abilities 3. Ability to speak well in presentation or class discussion is a part of the course grade, in addition to the written report. 4. Use IT to enhance real-time interaction with students.

Implications – continued Pursue the following career paths: Accounting firms: Systems audit IT consultant Industries/corporate firms: Operations Analyst

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