1. © 2009 Pearson Education, Inc. Publishing as Prentice Hall The Opportunities and Challenges Ahead Chapter 15 Information Systems Management in Practice 8 th Edition

2. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-2 Chapter 15 Introduction Hot Issues - Challenges or Opportunities? Navigating Information Overload Green Computing Virtualization and Parallelization IT Talents and Globalization

3. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-3 Chapter 15 Organizing Principles The Learning Organization Processes Rather Than Functions Communities Rather Than Groups Virtual Rather Than Physical Self-Organizing Rather Than Designed Adaptable Rather Than Stable Distributed Rather Than Centralized

4. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-4 Chapter 15 Capturing the World of Connections The Internet Mindset Where’s the Value in a Network The Rules of Networks Moving Forward Understanding Users Increasing Executives’ Understanding of IT Educating IS About the Business Conclusion

5. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-5 A Framework for IS Management

6. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-6 Introduction E-world here to stay! Yes, even after dot com bubble burst Internet-based economy Its continuing impact on business strategies, work environments and skills What are the issues? How can enterprises leverage the power of Internet?

7. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-7 Hot Issues - Challenges or Opportunities

8. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-8 Navigating Information Overload Risk and costs of cognitive overload due to information abundance 988 billion gigabytes of data by 2010! Strategies enterprises can use to filter data and content SEARCH paradigm Data mining and analysis for business intelligence

9. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-9 Green Computing We need energy to sustain computing Data centers Google’s massive “cloud computing” energy requirements Better technology to reduce computing energy consumption E-waste: Dark side of digital age Government regulations Electronic Product Environmental Assessment Tool (U.S.) Restriction of Hazardous Substances (European Union) China and other third-world countries?

10. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-10 Virtualization and Parallelization Virtualization Techniques that simulate multiple self-contained application environments on a single physical server Benefits include Scalable resources (partitioning) Simple encapsulation (single virtual environment) Increased security (isolated from physical host machine) Reduced energy consumption Parallelization Parallel processing on multiple core Think Intel 64-bit Core 2 Duo processor architecture

11. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-11 IT Talents and Globalization Severe global IT talent shortage in next ten years predicted! Technological obsolescence The training and learning never stops! Age discrimination What are the jobs for MIS majors today? Organizations need to develop HR strategies to address issue

12. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-12 Organizing Principles How to Succeed in the Internet Economy

13. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-13 The Learning Organization Five basic learning principles Personal mastery Lifelong learning (continual clarification) Mental models (schemas) Looking inward (challenging assumptions) Shared Vision Organizations view of its purpose Team Learning Dialog (even dialectic) Systems Thinking The whole is not the sum of its parts

14. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-14 Processes Rather Than Functions A process is a combination of tasks Focus on group rather than an individual Reengineering for a process-centered structure Self-organizing, teamwork organizational processes spans departments Ramifications of process orientation Process ownership Measures of a process (can be difficult) Professionals vs. workers Possess greater knowledge and a customer-orientation

15. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-15 Communities Rather Than Groups Communities vs. groups Communities arise out of spontaneity and volition e.g. communities of practice Groups are formed purposely by design E.g. task force Communities are building blocks of an organization (a social environment) People Learning Participation

16. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-16 National Semiconductor Case Example: Communities of Practice (CoP) CEO: Build core competence in mixed signal technology and phase lock loops CoPs to mobilize engineers from numerous product lines Swapped ideas, insights and solutions Team-based efforts Library of knowledge Chip design reviews, best practices, know-how Funding provided for Web-based CoPs

17. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-17 Virtual Rather Than Physical Virtual Organization Exists wherever (space) and whenever (time) the participants happen to be Might this perspective be too sanguine? Global integration and coordination but local adaptability How does this arrangement work in a virtual context?

18. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-18 Sun Microsystems Case Example: Virtual Organizations Organizational culture and structure based on electronic network characteristics Email flow (how much you have) Determines existence and identity in organization Mailing list (which one you are on) Determines status and power in organization Director manages organization by monitoring the electronic network activities e.g. new project, major event

19. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-19 Self-Organizing Rather Than Designed Self-organizing (or emergent) systems create their own structure, patterns of behavior and process to accomplish the work E.g., Semco S.A., workers set their own production quotas, take initiative to redesign product, define new marketing strategies the Open Source movement Based on self-governance, self-replication, partial learning and some self-repair Contingent on freedom and trust

20. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-20 Semco, S. A. Case Example: Self-organizing principle Brazilian manufacturing firm is touted “world’s most unusual workplace” Break all rules to cut costs and up productivity Employees set own standards and are empowered  Production quotas, choose own boss, influence product designs and marketing plans  Unlimited access to company information, training (e.g. read accounting statements)  Voluntary attendance at meeting, profit-sharing voting rights Radical “democratic workplace” evolved over stages 600 percent company growth

21. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-21 Adaptable Rather Than Stable Organizations must be built to change in today’s e-economy IT increases connectivity, which heightens volatility Organizational change is difficult and costly Paradigm: organizations structured for stability and minimal change Achieve adaptability through distributed intelligence and action Focus on individuals as agents of change

22. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-22 Capital One What’s in your wallet? Case Example: Organizational adaptability Information-based strategy to develop consumer financing products Developed core competence in IT-based test design (statistical analysis) Constantly “testing” the market (first-mover advantage) “balance transfer” a winning offer Some control: Management use veto power to determine funding for on-the-fly new product development based on test results Fourth largest U.S. firm in diversified financials

23. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-23 Distributed Rather Than Centralized Distributed Capitalism Developing a relationship with customers by tapping into their needs Need for sanctuary (control over time and activities) Need for voice (freedom of speech) Need for connection (trust) Market-based organizations Decreasing cost of communication enables organizations to structure themselves to become democracies Empowering people is key to the new kingdom  Needs lots of communication, new skills, and new attitudes toward risk and control  Shift from command and control to coordinate and cultivate

24. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-24 Capturing the World of Connections

25. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-25 The Internet Mindset What should the organization mindset be of the global online world? Communication is personal, not mass market Starts with the customer and needs Customer contact is interactive, not broadcast Two-way communication Customer service time frame is theirs, not yours Fast response to requests and concerns The culture is bottom-up, not top-down Value proposition begins with soliciting customer input

26. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-26 Where’s the Value in a Network? How to leverage the Internet to gain value? Back-end intelligence (value core) IT architecture and infrastructure should focus on centralization (shared resources), stability, scalability and standardization  Facilitates Web services (data storage and processing) Front-end intelligence (value periphery) Web interface is customer touchpoint Should be decentralized (specialized devices), flexible, personalized and sensitive to context

27. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-27 Where’s the Value in a Network? cont’d Intelligence engenders value, but front-end and back-end components must be decoupled Different capabilities and strategies needed at core and periphery to optimize value creation Core: value in orchestration (business ecosystem) Periphery: value in modularity (“plug and play”) New kinds of business can be created by understanding these value dynamics e.g. “reassembly”  Organizing disparate pieces of intelligence to create personalized offerings (one-stop Web site)

28. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-28 The Rules of Networks A connected world has three distinguishing features It is global Biased toward ‘software’ (Information, ideas, relationships) Intensely linked Accordingly, rules of networks include Aim for relationship tech. Increasing quantity and quality of economic relationships Follow the free Scale economies and near-zero marginal cost But Porter (2001) argues that indirect profitability is wrong?  Web 2.0 firms (e.g., YouTube, FaceBook) not making money Feed the Web first Analogy: Save our planet so we continue to live on it

29. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-29 Moving Forward

30. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-30 Understanding Users Understanding people’s comfort levels for new technology is as important as the technology itself A “Diffusion of Innovation” framework 500,000 innovators (constantly sniffing out latest tech) 5 million early adopters 30-35 million early majority adopters 40-50 million late majority adopters 10-15 million technically adverse

31. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-31 Diffusion of Technology Innovation

32. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-32 Increasing Executives’ Understanding of IT Many business executives view IT only as a means to achieve operational effectiveness How can CIOs and IS professionals influence their view of IT to one of gaining competitive advantage? IS leadership and governance Strategic IT vision, measurement of IT value, cost- benefits, change management, control Learning (see next slide)

33. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-33 Educating IS About the Business Learning by doing Giving responsibility for IT project(s) Learning by governing Being part of governance team that sponsors IT projects Learning via educational programs Executive IT workshops e.g. Shidler College executive education programs?

34. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-34 Conclusion Network world requires different way of thinking People-to-people relationships Natural phenomena not human-designed structures Technology is simply the underpinning IT becomes about business Focus on human aspects of IT

35. © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-35 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall