1 - 1 The Networked Economy: A new way of doing business Copyright © 2001 by Harcourt, Inc. All rights reserved. Part 1

2001 Our Changing World Computer networks Internet/World Wide Web Electronic commerce Networked economy- Enhanced, transformed, or new economic relationships based on computer networks and human knowledge Web time - Web year

2001 GLOBALIZATION Track and Place orders internationally 24 hour / 7 day operation Communicate via Networks Competition in World Markets Global Workgroups Global Delivery Systems

2001 Our Changing World Purchasing a camera Ownership process Requirements

2001 Our Changing World Purchasing a camera Requirements Acquisition

2001 Our Changing World Purchasing a camera Requirements Acquisition Ownership

2001 Our Changing World Purchasing a camera Requirements Acquisition Ownership Retirement Old vs. New

2001 Changing the Rules Scarcityland, capitaltime Searching paper-based, Web-based strategies in person Transactionsface-to-face, , Web, phone, mailelectronic checks, cardspayments Communicationone-to-one,many-to-many many-to-many Information analog digital storage Areas of ChangeIndustrial EconomyNetworked Economy

2001 TRANSFORMATION OF ENTERPRISE Flattening Empowerment Decentralization (multinational) Location Independence (virtual) Collaborative Work Low Transaction Costs Flexibility (decision making) *

2001 Changing the Rules Metcalf’s law

2001 Changing the Rules Intelligent agents Electronic communities Analog to digital conversion Creative destruction

2001 Elements of the Networked Economy The networked economy triangle Economic Relationships Computers Connectivity Knowledge Chip Bandwidth Human

2001 Elements of the Networked Economy Possible Relationships in the Networked Economy INTRAnet EXTRAnet

2001 Elements of the Networked Economy Converting data to information Data Processing Information Knowledge Knowledge Workers

2001 Elements of the Networked Economy Data and information Department A Payroll Department B Payroll Department C Payroll Department D Payroll Department E Payroll Company Payroll Employee Pay Employee Pay Employee Pay Hours Pay Rate

2001 Infrastructure of the Networked Economy Information technology All forms of technology used to create, store, exchange, and use information in its various forms –Hardware –Software –Programs

2001 Infrastructure of the Networked Economy Personal productivity software (tools) Organizational productivity (network) Processing transactions

2001 Information Technology in Organizations Systems –Input –Processing –Output –Feedback Information systems (IS)

2001 Information Technology in Organizations Shared processing to shared information Shared Processing Personal Computing Shared Information and Resources

2001 How Information Systems Affect Organization Economic –Human Costs –Transaction Costs –Decision Making Costs –Change in Operating Procedures –Political Issues - security, control

2001 Information Technology in Organizations Fareastfoods.Com

2001 Information Technology in Organizations Fareastfoods.Com Fareastfoods.com Order System Customer Food Order Feedback from Customer Delivery of Food Item

2001 Information Technology in Organizations Data, knowledge, information, and decisions Data Information Knowledge Decisions Processing InterpretationRequest

2001 Information Technology in Organizations Information Systems Cycle Transactions Data Storage Decisions Remember the Past Preparing for the Future Handling the Present People and Technology

2001 Information Technology in Organizations Transaction Processing System Transactions Data Entry Transaction Processing Organizational Memory A Look Ahead... (Database)

2001 Information Technology: Infrastructure of the Networked Economy Chapter 2