ICT 41013, ICT in Business and Governance By S.Sabraz Nawaz M.Sc. in IS (SLIIT), PGD in IS (SLIIT), BBA (Hons.) Spl. In IS (SEUSL), MIEEE, Microsoft Certified Professional Senior Lecturer in MIT Module 01 Organizational Performance: IT Support and Applications

Digital Enterprise Digital Enterprise: is a new business model that uses IT in a fundamental way to accomplish one or more of three basic objectives Reach and engage customers more effectively Boost employee productivity Improve operating efficiency Digital Enterprise uses networks of computers to electronically connect All its internal parts via intranet All its business partners via the internet or secured internet called extranet Therefore, the term digital enterprise refers to an organization which uses computers and information systems to perform all or most of its digitizable activities ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz2

Digital Business ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz3

Digital Economy Digital Economy Refers to an economy that is based on digital technologies, also called the Internet Economy, the New Economy, or Web Economy Digital networking and communication infrastructures provide a global platform over which people and organizations devise strategies, interact, communicate collaborate, and search for information, this platform includes; A vast array of digitizable products – databases, news & information, movies, etc Consumers and firms conducting financial transactions digitally Physical goods such as home appliances and automobiles which are equipped with microprocessors and networking capabilities ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz4

Major IT Characteristics in the Digital Economy AreaDescription GlobalizationGlobal communication and collaboration; global electronic marketplaces. Global customers, suppliers. Digital SystemFrom TV to telephones and instrumentation, analog systems are being converted to digital ones SpeedA move to real-time transactions; digitized documents, products, and services. Many business processes are expedited by 90% or more Information OverloadAlthough the amount of information generated is accelerating, intelligent search tools can help find what they need. MarketsMarkets are moving online. Physical markets are being replaced by electronic markets. DigitizationMusic, books, pictures, movies and more are digitized for fast and inexpensive distribution Business models and processes New and improved business models and processes provide opportunities to new companies and industries. InnovationDigital and Internet-based innovations continue at a rapid pace. ObsolescenceThe fast pace of innovation creates a high rate of obsolescence. OpportunitiesOpportunities abound in almost all aspects of life and business. FraudCriminals employ a slew (large amount )of innovative schemes on the Internet. WarsConventional wars are changing to cyberwars OrganizationsMany companies are attempting to move to a full digital status. ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz5

New Economy vs. Old Economy Example #1: Registering for Classes Old Economy: You would go to the Registrar’s Office on campus with a paper registration document New Economy: You access your campus website, log into registration site, and electronically register for classes from anywhere ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz6

New Economy vs. Old Economy Example #2: Buying and Selling Textbooks Old Economy: You go to the bookstore in person and buy new or sell used books New Economy: You go online to the Publisher’s Web site or to Web-based services such as Amazon.com to buy or sell books ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz7

New Economy vs. Old Economy Example #3: Photography Old Economy: You use a camera with film, which you have to purchase and have developed; you mail copies of pictures. New Economy: You can scan photos, make copies and them. Digital cameras require no film or processing. Digital photography and video integrated into cell phones for immediate viewing ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz8

New Economy vs. Old Economy Example #4: Paying for Gasoline Old Economy: You pump your gas and go inside to pay using cash or credit New Economy: Insert credit card at pump, receive authorization, pump gas, get receipt, drive away. ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz9

New Economy vs. Old Economy Example #5: Paying for Transportation in New York City Old Economy: Use tokens for bus and subway transportation New Economy: Bus and subway riders now use MetroCards; contactless cards that have a small radio transmitter that transmit account information to a reader ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz10

New Economy vs. Old Economy Example #6: Paying for Goods, Checkout Old-old Economy: Customer selects goods, waits in line for the cashier to key in price of items, and then pays in cash Old Economy: The clerk swipes the barcode of each item and customer pays in cash, credit, or debit. Information scanned is available for immediate analysis known as source-data automation ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz11

New Economy vs. Old Economy (Ex. #6 Continued) Example #6: Paying for Goods, Checkout continued Old Economy: Shoppers take their items to a self- service kiosk and swipe the barcodes themselves New Economy: Wireless technology affixed to each item. Allows you to select items that pass through a scanner, which reads wireless signal, generates a bill, automatically debits your designated account for payment and you leave ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz12

Electronic Commerce and Networked Computing When a company performs most of its business functions electronically in order to enhance its operations, it is said to be doing E-business. Its use of web-based systems to support buying, selling, collaboration, and customer service exemplifies, E-Commerce (EC) The infrastructure for digital organizations and EC is networked computing, which connects computers and other electronic devices via telecommunication networks. Such connections allow users to access information stored in many places and to communicate and collaborate with others ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz13

Information Technology Broadly, the collection of computing systems used by an organization is termed information technology (IT) IT has become the major facilitator of business activities in the world today In the developed countries, almost all medium and large organizations, and many small ones, private or public, in manufacturing, agriculture, or services, use information technologies, including electronic commerce, to support their operations ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz14

Information Technology (cont) IT is also a means of fundamental changes in the strategic structure, operations, and management of organizations due to its capabilities. Major Capabilities of Computerized Information Systems Perform high-speed, high volume, numerical calculations Provide fast, accurate, reliable, and inexpensive communication within and between organizations, any time, any place Store huge amounts of information in an easy-to-access, yet small space Allow quick and inexpensive access to vast amounts of information worldwide at any time Enable collaboration anywhere, any time Increase the effectiveness and efficiency of people working in groups in one place or in several locations (Cont…) ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz15

Information Technology (cont) Major Capabilities of Computerized Information System… brightly present information that challenges the human mind Facilitate works in risky environments Automate both semi-automatic business processes and manually done tasks Facilitate interpretation of vast amounts of data Facilitate global trade Enable automation of routine decision making and facilitate complex decision making Can be wireless, thus supporting unique applications anywhere Accomplish all of the above much less expensively than when done manually ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz16

Information Technology (cont) These capabilities support the following five business objectives I. Improve productivity II. Reduce cost III. Improve decision making IV. Enhance customer relationship V. Developing new strategic applications ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz17

The Old Economy – Taking Photos 1. Buy film in a store 2. Load your camera 3. Take pictures 4. Take roll of film to store for processing 5. Pickup the film when ready 6. Select specific photos for enlargement 7. Mail to family and friends ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz18

The New Economy – Taking Photos 1 st Generation Digital Photography Old economy (except Select specific photos for enlargement and Mail to family and friends) were replaced by using a scanner and ing 2 nd Generation Digital Photography Use a Digital Camera, no film, no processing 3 rd Generation Digital Photography Your Digital Camera is now in your mobile phone, your binoculars, or palmtop computer. ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz19

Advantages of doing business in the New Economy We can see the advantage of the new way of doing business over the old one in terms of at least one of the following: Cost Quality Speed Strategic Competitive Advantage Customer Service The new economy brings not only digitization but also the opportunity to use new business models, for instance: buying and selling from the Internet ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz20

Business Models A business model is a method of doing business by which a company can generate revenue to sustain itself. The model spells out how the company adds value to create a product or service. (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting. Its survival depends on a complex model involving advertisers and content providers Internet portals, such as Yahoo, also use a complex business model. ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz21

Drivers Forcing Changes In Business Models Environmental, organizational, and technological factors React frequently and quickly to both the threats and the opportunities resulting from this new business environment A response can be a reaction to a pressure already in existence, an initiative intended to defend an organization against future pressures, or an activity that exploits an opportunity created by changing conditions ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz22 Business Pressures Business Critical Response Activities

Business Pressures, Organizational Responses, and IT Support 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 factors are likely to create business pressure on the organization The three types of business pressures faced are: market, technology, and societal pressures. ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz23

Three Types of Business Pressures Market Pressures: The Global Economy and Strong Competition (globalization facilitated by Internet, Creation of European Market with a single currency: Euro, Cost of Labour, etc) Need for Real-Time Operations The world is moving faster and faster. Decisions need to be made very quickly, and speed is needed to remain competitive. Some companies are even attempting to close their accounting books in a day— a process that used to take as many as 10 days. The Changing Nature of the Workforce (increasing number of women, single parents, persons with disabilities. Workers becoming knowledge workers, homebound employment, etc) Powerful Customers (customers become more knowledgeable about the availability and quality of products and services, they want customized products, etc) ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz24

Business Pressures (Continued) Technology Pressures: Technological Innovation and Obsolescence (New and improved technologies create or support substitutes for products, alternative service options, and superb quality. Some of today’s state of the art products may be obsolete tomorrow) Information Overload (the internet and other telecommunication networks increase the amount of information available to organizations and individuals. The amount of information available on the internet more than doubles every year, and most of it is free) ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz25

Business Pressures (Continued) Societal Pressures: Social Responsibility (Range from the state of the physical environment to company’s contribution to education. Pollution, hiring of minorities, employee education, etc.) Government Regulation and Deregulation (Health, safety, environmental control, equal opportunity, etc. and Government regulations cost money and make it more difficult to compete with countries that lack such regulations. In general, deregulation intensifies competition.) Protection Against Terrorist Attacks (Since September 11, 2001, organizations have been under increased pressure to protect themselves against terrorist attacks.) Ethical Issues (Organizations must deal with ethical issues relating to their employees, customers, and suppliers. Ethical issues are very important since they have the power to damage the image of an organization and to destroy the morale of the employees.) ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz26

Organizational Responses Strategic Systems: (Provide organizations with strategic advantages that enable them to increase market share and/or profits. Example: FedEx’s overnight delivery system, which can track the status of every individual package, anywhere in the delivery chain) Customer Focus: (enables organizations to provide superb customer service and prevent losing customers 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 E-business and E-commerce is the strategy of doing business electronically ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz27

Business Pressures, Organizational Responses, and IT Support ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz28

Information Systems vs. Information Technology An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose. Like any other system, an information system also includes people, procedures, and physical facilities, and it operates within an environment. Like any other system, an information system includes inputs (data, instructions) and outputs (reports, calculations). It processes the inputs by using technology such as PCs and produces outputs that are sent to users or to other systems via electronic networks. Information Technology is the collection of computer systems used by an organization. Information technology, in its narrow definition, refers to the technological side of an information system. It includes the hardware, software, databases, networks, and other electronic devices. It can be viewed as a subsystem of an information system. ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz29

Computer-based Information System A computer-based information system (CBIS) is an information system that uses computer technology to perform some or all of its intended tasks. Such a system can include as little as a personal computer and software. Or it may include several thousand computers of various sizes with hundreds of printers, plotters, and other devices, as well as communication networks (wireline and wireless) and databases. In most cases an information system also includes people. ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz30

The Adaptive, Agile, Real-Time Enterprise “It is not the strongest of species that survives, nor the most intelligent; but the one most responsive to change.” - Charles Darwin Bill Gates is aware of this; Microsoft is continually developing new Internet and IT products and services Yet, Gates has stated that Microsoft is always two years away from failures. He also believes that competition today is not only among products or services but among business models, customer service, and speed Adaptive enterprises respond properly and in a timely manner to changes in the business environment ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz31

The Process of Becoming Adaptive Organization In order to survive or succeed in the ever changing environment, organizations should become adaptive or agile so that they can deal properly, and in time with changes that create problems and opportunities Recognize the environment and organizational changes as quickly as they occur or even before they occur (predictive analytical software, business intelligent software, etc.) Deals with changes properly and correctly (optimization software enable companies to determine prizes of products in real time) Become a digital and agile enterprise (this allows the previous two activities, as well as gaining competitive edge) Don’t wait for your competitor to introduce change (First- mover-advantage) Change your information system quickly (using emerging technologies) ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz32

On-Demand and Real-Time Support A real-time system is an information system that provides real-time access to information or data (eg. In a hospital information system, when a patient is admitted to the hospital, his or her medical records must be accessible in seconds. The longer the wait, the higher the risk) The same is true for enterprises because the basis of competition is often time or speed Web-based systems provides us with these capabilities A sales man can check whether a product is in inventory by looking into the inventory system. Online order payment by credit card is automatically checked for the balance and the amount of the purchase is debited – all in seconds To implement the real-time enterprise, companies must design information systems that Can support all the relevant business processes and are available all times Function in multiple languages and currencies, if necessary Real-time enterprise is also referred to as On-Demand Enterprise ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz33

Major Technological Developments and Trends The cost-performance advantage of computers over manual labor will increase Graphical and other user-friendly interfaces will dominate PCs Storage capacity will increase dramatically Data warehouses will store ever-increasing amounts of information Multimedia use, including virtual reality, will increase significantly There is a push for open-architecture Computers will be increasingly compact and more reliable There is proliferation of embedded technologies Software As A Service Mobile and wireless applications will become major component of IT Home computing will be integrated with phone, television, and other electronic devices to create smart home The use of internet will grow, and it will change the way we live, work, and learn Coroporate portals will connect with companies, with their emplolyees, business partners, and the public E-Commerce will grow rapidly, changing the manner business is conducted RFID will change supply chains and retailing ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz34

Why Study Information Systems? You will be more effective in your chosen career if you understand how successful information systems are built, used, and managed You also will be more effective if you know how to recognize and avoid unsuccessful systems and failures According to the US Bureau of Labor Statistics, the “top seven fastest growing occupations fall within IT or computer related field” Developing “Computer” Literacy will only enhance your “Information” Literacy Developing “Computer” Literacy will only enhance your “Information” Literacy ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz35

Why Should You Learn about IT? IT provides opportunities for people with disabilities IT provides quality-of-life improvements Improvements in health care Crime fighting and other benefits ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz36

Managerial Issues Recognizing opportunities for using IT and Web-based systems. Who will build, operate, and maintain the information systems. How much IT?  Management wants to minimize cost on IT while maximize benefits How much and How important is IT?  IT planning, Competitive advantage of IT Is the situation going to change?  IT will be more important as time passes Globalization  Global competition will have impact Ethics and social issues Transforming the organization to the digital economy. ICT 41013: ICT in Business and Governance, By: S. Sabraz Nawaz37

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